Income Tax Appellate Tribunal

Bhavna B. Kothari vs. Respondent: Income tax Officer

MANU/IU/0596/2020

11.09.2020

Direct Taxation

Mere suspicion could not be a ground to invoke jurisdiction under Section 263 of IT Act

By way of present appeal, the Assessee contest correctness of revisional jurisdiction under Section 263 of Income Tax Act, 1961 (IT Act) as exercised by Learned Principal Commissioner of Income Tax for Assessment Year 2014-15, vide order. The grounds raised by the Assessee is that, revisionary proceedings and order under Section 263 of IT Act are void ab initio, invalid, beyond the authority of law and devoid of any legal force.

There was proper disclosure of exempt LTCG in Assessee's computation of income. The transactions were duly explained by the Assessee with requisite documentary evidences during the course of regular assessment proceedings. The assessment order takes note of the fact that, various details were called from Assessee which were duly submitted and placed on record. These details include notes and explanations on the issues that came up for discussion during the course of hearing. Therefore, it could be concluded that there was due application of mind by Learned Assessing Officer (AO) on the stated issue and the claim was admitted after due verification. Merely because the issue was not elaborately discussed in the quantum assessment could not be a ground to invoke revisional jurisdiction under Section 263 of Act particularly when the details called for by Learned AO were submitted and placed on record.

Another fact to be noted that the copies of documents/office note which formed the basis of invocation of jurisdiction was never supplied to the Assessee. The Assessee all along denied having made any such affidavit that aforesaid income was declared under Income Declaration Scheme, 2016. However, the copy of the affidavit, stated to be in assessment records, was never confronted to the Assessee to controvert his submissions. Mere suspicion could not be a ground to invoke jurisdiction under Section 263 of IT Act. It was obligatory on the part of revisional Authority to demonstrate that, the order was erroneous as well as prejudicial to the interest of the revenue. There is no adequate material on record which would demonstrate the fulfillment of both conditions. Therefore, the revisional jurisdiction under Section 26 of IT Act could not be sustained in the eyes of law. Appeal allowed.

Tags : Suspicion Jurisdiction Legality

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