Revisionary procedures were lawful as long as the assessee continued to refuse to provide an explanation for his case

Fact and issue of the case

Ld. Pr. CIT erred in invoking the provisions of sec. 263 and in setting aside the assessment order for fresh enquiry. Order passed u/s 263 is unsustainable and is passed without properly appreciating the facts & evidences on record. The assessment order is neither erroneous nor prejudicial to the interest of Revenue.

The appellant reserves the right to add, amend or modify any of the ground/s of appeal.”

At the very outset, the registry has pointed out that the appeal of the assessee is barred by limitation of 520 days. When the Ld. AR of the assessee was confronted with the said aspect, it was submitted by him that out of 520 days, delay of 379 days is covered by the decision of the Hon’ble Apex Court in Suo-motto writ petition (C.) No.3 of 2022, vide order dated 10.01.2022 wherein limitation was extended on account of COVID The remaining delay of 141 days was explained by the assessee that the assessee was not advised by his counsel to file appeal against such revision order before the Tribunal and therefore, no appeal could be filed within the stipulated time period. An affidavit in support thereof was filed by the Ld. AR. It was also submitted by the Ld. AR that the assessee was in bed rest from 15.05.2022 till 20.08.2022 for the reason that his leg bone was injured and he was advised to take rest for 2/3 months. This was one of the reason for delay in filing of the appeal by the assessee which is found to be reasonable for consideration. Therefore, we condone the delay and permit the appeal of the assessee to place for hearing.

Observation of the court

We have heard the rival contentions and perused the material available on record. On a perusal of the order u/s.263 of the Act, at Para 3, it was observed by the Pr. CIT that show cause notice was issued to the assessee through ITBA but compliance was made by it. The Ld. Pr. CIT observed that there is no documentary evidence which could explain the nature and source of cash transactions, consequently there is no proper verification made by the A.O in this case, hence, revenue loss was occurred. In absence of any submission by the assessee before the Pr. CIT who had brought on record certain lapses on the part of the A.O to establish that the order of the A.O was erroneous in so far as it was prejudicial to the interest of the revenue, therefore, the same needs to be revised by virtue of power vested u/s.263 of the Act. The Pr. CIT also recorded the satisfaction that I am fully satisfied that the assessment order is erroneous in so far it is prejudicial to the interest of the revenue in view of Explanation 2 of Section 263 of the Act. The A.O is directed to make adequate enquiries with regard to genuineness of the business, source of cash deposits and all credit entries in light of Section 68/69A of the Act. The Pr. CIT on the basis of his aforesaid observations set-aside the issue to the file of the A.O for fresh adjudication after affording adequate opportunity to the assessee.

Since, the additional evidence were filed before us for the first time which were neither produced before the A.O nor before the Pr. CIT, therefore, the same needs examination/verification in order to establish their authenticity and On a perusal of the notice issued by the A.O dated 28.09.2018 and written submission filed by the assessee before the A.O dated 13.12.2018, it is clearly emanating that a short reply was submitted by the assessee and was summarily accepted by the Ld AO, thus, verification of the information made by the A.O were not found to be adequate on which the Ld. Pr. CIT has rightly doubted and assumed jurisdiction to initiate revisional proceedings by invoking the provisions of Section 263. The Ld. Pr. CIT had made certain observations, however, without giving any findings on the facts has restored the issue back to the file of the A.O for making proper enquiries and to re-adjudicate the issue in view of the Explanation 2 of Section 263 of the Act. Such order of the Pr. CIT wherein further opportunity was granted to the assessee, to appear before the Ld AO to submit necessary explanations/information for substantial justice, whereas the assessee have not responded and remain non-compliant in explaining his case before the Ld PCIT, cannot be termed as perverse or illegal or not maintainable, therefore, we do not find any infirmity in the view taken by the Pr. CIT, accordingly, hold that the same deserves to be upheld. We order accordingly.

In the result, appeal of the assessee is dismissed in terms of our aforesaid observations.

Order pronounced in the open court on 10/10/2023.