Considering that the AO made proper inquiry, ITAT said that the order was not wrong and could not be revised.

The Jaipur Bench of the Income Tax Appellate Tribunal (ITAT) has ruled that the surplus income announced in the survey is considered a business income and was not received under the Income Tax Act, Section 69 and 69A of 1961.

Alok Vajawat (Assisi), the Place department surveyed on 16.01.2019 and the revenue identified was identified. 76,00,000. ASC filed the Income Tax Return (ITR) on 31.10.2019, which has a total income of Rs 500. 83,70,380. Asyas revealed additional income of Rs 500. 76,000, which was found as business income during the survey.

The Diagnostic Officer (AO) chose the case for a thorough scrutiny and issued a notice to the Assisi. Asyasi presented the required documents to the AO. The AO considered Asi’s requests and documents.

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The AO accepted the total income of Assisi and completed the diagnosis process. Therefore, AO approved an evaluation order on the revenue returning to 29.09.2021 RS. 83,70,380.

PCIT issued notices to Assisi. Asmisi filed a detailed response about the income announced under the head of business income. However, the PCIT did not accept the Assisi disputes.

Therefore, the PCIT requested Section 263 of the Income Tax Act and observed that the AO’s evaluation order was incorrect and prejudiced in the interest of tax. The PCIT noted that the AO had accepted Asi’s requests without confirming the sources.

The PCIT further observed that the AO should have been accused of income under Section 69 and 69A of the Income Tax Act. Thus, the PCIT has said that income should have been charged under Section 115BB of the Income Tax Act.

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As a result, the PCIT placed aside the diagnosis order approved by the AO and directed to consider revenue in accordance with Section 69 and 69A of the Income Tax Act. The PCIT also directed the AO to impose tax on income under section 115 BBE of the Income Tax Act.

The PCIT ordered, the Assisi preferred the appeal before the ITAT. Asi’s lawyer argued that the AO had already confirmed the PCIT’s order when passing the order of the issue.

The lawyer also relied on the AO’s order and argued that there was no error in the diagnosis order. The lawyer tried to terminate the PCIT order approved under Section 263 of the Income Tax Act.

On the other hand, the revenue advice supported and relied on the order of the PCIT. The lawyer also tried to reject the appeal, thus retaining the PCIT order.

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A two -member bench comprising Dr. S. Satellkshmi (Judicial Member) and Rathod Kamlesh Janthai (Accountant Member) have observed that the appeal challenges the application of Section 263 of the Income Tax Act.

The tribunal observed that Assisi acknowledged additional income under head business income. The tribunal observed that the question was issued in the question of why Section 115 BBE should not be implemented.

The tribunal further observed that the AO did not inquire but it applied his mind and took a comprehensible view on the matter. Therefore, the tribunal said that the AO’s ruling was neither wrong nor prejudice. Thus the tribunal terminated the AO’s order. This is how the appeal was allowed.

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