Iapl/123/2019 Of The Pr. Commissioner Of Income Tax v. Champ Info Software

Case :- INCOME TAX APPEAL No. - 123 of 2019 Appellant :- The Pr. Commissioner Of Income TaxRespondent :- Champ Info SoftwareCounsel for Appellant :- Gaurav MahajanCounsel for Respondent :- Suyash Agarwal Hon'ble Naheed Ara Moonis,J.Hon'ble Saumitra Dayal Singh,J. Heard Sri Gaurav Mahajan, learned counsel for therevenue and Sri Suyash Agarwal, learned counsel for theassessee. Present appeal has been filed by the revenue underSection 260A of the Income Tax Act, 1961 (hereinafterreferred to as 'the Act') against the order dated21.06.2019 passed by the Income Tax Appellate Tribunal,Delhi Bench in ITAT No. 2799/Del/2018, for the A.Y. 2013-14. Present appeal has been pressed on the followingquestion of law; "Whether in view of the clear language of explanation 2(a) of theAct, 1961, the Tribunal has erred in setting aside the order passedby the Principal Commissioner of Income Tax under Section 263 ofthat Act." Having heard the learned counsel for the parties andhaving perused the record, we find that the assessee hadfiled its return for the A.Y. 2012-13 disclosing NIL income.It was subjected to regular assessment proceeding underSection 143(3) of the Act. In course of that assessmentproceeding, the Assessing Authority doubted thegenuineness of fresh capital introduced by the assesseeRs.9,02,09,297/- by Shaleen Bajpai- a partner in the assessee firm. In the course of that proceeding, replieswere furnished by the said partner of the assessee firm toestablish the source of capital thus introduced. In anycase, upon inquiry the Assessee Authority accepted theexplanation furnished by the assessee and assessed it atNIL income. The aforesaid order was sought to be revised at theinstance of Principal Commissioner of Income Tax, underhis order dated 23.03.2018. The said order has been setaside by the Tribunal. Hence, this appeal. Perusal of the order of the Tribunal reveals that theTribunal has dealt with the issue in detail. It has examinedthe nature of the explanation furnished by the assessee,in the course of the assessment proceeding and it hasthereafter concluded that proper inquiry had been madein the course of the assessment proceeding whereinassessee explained the source of the capital introduced.Any further inquiry as contemplated by the PrincipalCommissioner of Income Tax would be in the nature ofinquiry into the source of the source, which is clearly notpermissible under law. The Tribunal has also taken noteof the attending circumstances in which the order came tobe passed by the Principal Commissioner of Income Taxin the backdrop of proceeding under Section 148 of theAct. Assuming the proceeding under Section 148 of the Actmay not have influenced the order passed under Section263 of the Act and that part of the reasoning may not beentirely correct, as suggested by the learned counsel forthe revenue still, on the strength the finding recorded bythe Tribunal as to the competence of the inquiry made during the course of the regular assessment proceeding,we find the statutory presumption arising underExplanation 2(a) to Section 263 of the Act stooddislodged. Finding of the Tribunal is clearly based onmaterial facts on record and it has been recorded upondue application of mind. There being no ground to assailthe finding of the Tribunal as perverse, the appeal lacksmerit and is, accordingly, dismissed. Order Date :- 21.9.2021A.Kr.