Kalpesh Dhanjibhai Makasana Vs. Pr.CIT

Parties Involved

Facts Summary

Kalpesh Dhanjibhai Makasana, an individual and Director in a Private Limited Company, filed his Return of Income for the Assessment Year 2020-21 on 15-02-2021, declaring a total income of Rs.6,12,13,850/-. The return was selected for limited scrutiny assessment to verify the claim of deduction under Chapter VIA of the Income Tax Act, 1961. The assessing officer issued a notice under section 143(2) on 15-11-2021, calling for details of the donation made by the assessee. The assessee submitted the required details on 29-11-2021. After verification, the assessing officer accepted the return and passed an assessment order under section 143(3) on 20-09-2022. The Principal Commissioner of Income Tax (PCIT) found that the assessee had shown income from salary of Rs.4.05 crores from M/s Makson Pharmaceuticals Pvt. Ltd., while the employer had shown payment of remuneration of Rs. 3.6 crores only. Thus, the balance amount of Rs. 45,00,000/- was not explained by the assessee, which is liable to be taxed at a special rate instead of the normal rate. The PCIT issued a show cause notice on 24-01-2024, and the assessee filed a detailed reply. The PCIT directed the assessing officer to invoke provisions of section 14A read with Rule 8D disallowance by giving proper opportunity of hearing to the assessee. The assessee filed an appeal against the revision order.…

Legal Issues

• 1. Whether the learned Principal Commissioner of Income Tax erred on facts as well as in law in setting aside the assessment order dated 20.09.2022 passed under section 143(3) of the Income Tax Act, 1961, directing the Assessing Officer to pass a fresh assessment order?
• 2. Whether the order passed by the Principal Commissioner of Income-tax, Ahmedabad-3, Ahmedabad is bad in law, invalid and requires to be quashed?

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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