Karam Chand Prop. M/s Subhash Trading Co. vs. The Pr. CIT (Central), Ludhiana

Parties Involved

Facts Summary

The assessee filed his return of income on 29/09/2018 declaring total income of Rs. 1,35,00,330/- which includes an amount of Rs. 1,35,00,000/- surrendered during the course of survey and paid tax at normal rate on the surrendered income. The case was selected for compulsory scrutiny being a survey case and notice under section 143(2) and 142(1) along with questionnaire was issued. The assessee furnished the requisite information and explanation. The returned income of Rs. 1,35,00,330/- was accepted by the Assessing Officer vide order passed under section 143(3) dt. 26/02/2021. The Principal Commissioner of Income Tax (Central), Ludhiana observed that the assessee had shown surrendered income as business income and income from other sources and tax was calculated at normal rate on the said income surrendered during the course of survey action but no explanation was given by the assessee in respect of income surrendered and no documentary evidence was submitted during the course of assessment proceedings. The Principal Commissioner of Income Tax (Central), Ludhiana held that the assessment order passed by the Assessing Officer under section 143(3) was apparently erroneous in so far as prejudicial to the interest of the Revenue within the meaning of Section 263 of the Act and the assessee was issued a show cause notice dt. 28/02/2023 as to why the order so passed by the Assessing Officer should not be set aside.…

Legal Issues

• 1. Whether the Principal Commissioner of Income Tax (Central), Ludhiana erred in assuming jurisdiction under section 263 and passing an order dated 30.03.2023 setting aside the assessment as framed by the Assessing Officer vide order dated 26.02.2021 under section 143(3).
• 2. Whether the Principal Commissioner of Income Tax (Central), Ludhiana erred in recording the finding that the assessment order under section 143(3) of the Act dated 26.02.2021 passed by the Assessing Officer is erroneous and prejudicial to the interest of the revenue.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

Similar Judgements

• Jagatjeet Singh vs ACIT

  Delhi Bench 'A', New Delhi benchAY 2022-23Dismissed

• Shri Barfani Dadaji Buildcon vs. PCIT(Central), Ahmedabad

  Ahmedabad bench

• Adani Green Energy Limited vs. Principal Commissioner of Income Tax

  Ahmedabad bench

• Ten Construction (India) Private Limited vs Principal Commissioner of Income-tax-6, Mumbai

  Mumbai bench

• Madhuri Dilip Gaikwad, Vaibhav Gaikwad, and Prem Dilip Gaikwad vs. PCIT (Central), Pune

  Pune bench

• DCIT, Central Circle-1(1), Kolkata Vs. Vrinda Engineers Pvt. Ltd.

  Kolkata 'A' Bench, Kolkata benchAY 2012-13Dismissed