Explanation and evidence w.r.t. cash recoveries made from Sundry Advances

IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES ‘A’ JAIPUR
BEFORE: SHRI SANDEEP GOSAIN, JM & SHRI VIKRAM SINGH YADAV, AM

ITA No. 10/JP/2021
Assessment Year :2016-17

Rameshwar Prasad Shringi
1-B 1-B, Kotri Road
Gumanpura, Kota, Rajasthan
Appellant

Vs.
Pr. CIT,
Udaipur
Respondent

PAN/GIR No.AGWPS2257F

Assessee by : Sh. Mahendra Gargieya (Adv.) & Sh. Devang Gargieya (Adv.)
Revenue by : Sh. B. K. Gupta (Pr. CIT)

Date of Hearing: 15/09/2021
Date of Pronouncement: 23/09/2021

ORDER

PER: VIKRAM SINGH YADAV, A.M.

This is an appeal filed by the assessee against the order of ld. Pr.CIT, Udaipur dated 11.03.2021 relevant for A.Y 2016-17 wherein the assessee has raised the following grounds of appeal:-

“1. The Ld. Pr. CIT erred in law as well as on the facts of the case in invoking the provisions of Sec. 263 of the Act and therefore, the impugned order dated 11.03.2021 u/s 263 of the Act kindly be quashed.

2. The ld. Pr. CIT erred in law as well as on the facts of the case in assuming jurisdiction u/s 263 of the Act without recording a specific and categorical finding that the subjected assessment order passed u/s 143(3) dated 10.12.2018 is erroneous and prejudicial to the interest of the revenue, in absence of which the entire proceedings u/s 263 is vitiated.

Therefore, the impugned order dated 11.03.2021 u/s 263 of the Act kindly be quashed.

3. The ld. Pr. CIT erred in law as well as on the facts of the case in assuming jurisdiction u/s 263 of the Act by wrongly and incorrectly holding that the AO failed to examine and verify the claimed recoveries made in cash from the Sundry Debtors and erred in cancelling/ setting aside the subjected assessment order passed u/s 143(3) dated 10.12.2018, with a direction to the AO to examine the identity & creditworthiness of the debtors, genuineness of the transactions w.r.t. recovery of advances of cash amount of Rs. 85 Lakh and also to make necessary additions wherever required.

The assumption of jurisdiction u/s 263 and the impugned direction, being contrary to the provisions of law and facts on record hence, the proceedings initiated u/s 263 of the Act and the impugned order dated 11.03.2021 deserves to be quashed.

4. The ld. Pr. CIT erred in law as well as on the facts of the case in assuming jurisdiction u/s 263 of the Act by wrongly and incorrectly invoking Explanation 2 to S. 263 as if the same conferred unbridled power upon the Pr. CIT even though the facts and circumstances of the case did not justify the application of the said Explanation.

5. The ld. Pr. CIT erred in law as well as on the facts of the case in wrongly setting aside the assessment order dated 10.12.2018 despite there being complete application of mind by the AO on the subjected issues and it was nothing but a case of change of opinion and/or suspicion, based on which, assumption of jurisdiction u/s 263 is not permissible. The impugned order dt. 11.03.2021 therefore lacks valid jurisdiction u/s 263 of the Act and hence, the same kindly be quashed."

2. Briefly stated, the facts of the case are that the assessee filed his return of  income on 17.03.2017 declaring total income of Rs. 5,49,620/- which was selected for scrutiny through manual scrutiny guidelines issued by the CBDT. Thereafter, notices u/s 143(2) and 142(1) were issued by the Assessing calling for necessary information and documentation. Taking into consideration the submissions and information/documentation filed by the assessee, the assessment was completed accepting the returned income vide order passed u/s 143(3) dated 10.12.2018.

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