2021 (6) TMI 1157 - AT - Income Tax

Tribunal Upholds Principal Commissioner's Jurisdiction Under Sec. 263, Citing Errors in Capital Gains Assessment for 2014-15.

The ITAT Pune upheld the Principal Commissioner of Income-Tax's decision to invoke jurisdiction under Sec. 263 of the Act for the assessment year 2014-15. ... Revision u/s 263 - Error computing capital loss - such loss is not allowable for the reason that the assessee has shown the cost of acquisition on entire three plots wrongly but in actual fact, the assessee sold his 30% share in three commercial plots admeasuring 3,310 sq. mtrs only as against 4.200 sq.mtrs. - as per CIT AO did not apply his mind at all on this working, without there being any discussion, he passed an assessment order - HELD THAT:- On perusal of the assessment order dated 17.06.2016 passed by the Assessing Officer, which is on record, determined the same amount as returned by the assessee wherein we note that no discussion or whatsoever made with regard to the purchase of plot, selling of the said plot and cost of acquisition etc., Taking into consideration the facts and circumstances of the case and the reasons recorded by the learned Principal learned Commissioner of Income-Tax in the impugned order, we find no infirmity in the order of the learned Principal Commissioner of Income-Tax in invoking the jurisdiction under Sec. 263 of the Act in quashing the assessment order dated 17.06.2016 treating the same as erroneous and prejudicial to the interest of Revenue and thus the order of the learned Principal Commissioner of Income-Tax is justified and thus, the grounds raised by the assessee are dismissed. Issues:1. Jurisdiction under Sec. 263 of the Act - Whether justifiedRs.Analysis:The appeal before the Appellate Tribunal ITAT Pune was against the order passed by the Principal Commissioner of Income-Tax for the assessment year 2014-15. The key issue raised by the assessee was regarding the jurisdiction under Sec. 263 of the Act. The Tribunal noted the absence of representation from the assessee and proceeded ex-parte. The Principal Commissioner of Income-Tax contended that the assessee purchased a share in three commercial plots and later sold a part of it, claiming capital loss. The Principal Commissioner observed discrepancies in the cost of acquisition claimed by the assessee and the actual sale, leading to the disallowance of the claimed loss. The Tribunal considered the arguments presented by the Revenue and upheld the decision of the Principal Commissioner under Sec. 263, dismissing the grounds raised by the assessee.The Principal Commissioner of Income-Tax highlighted that the Assessing Officer did not properly analyze the working related to the capital gains on the sale of the plots. The Tribunal reviewed the assessment order passed by the Assessing Officer, which lacked discussion on crucial aspects like the purchase of the plot, sale, and cost of acquisition. Considering the facts and circumstances of the case, the Tribunal found no error in the decision of the Principal Commissioner to invoke Sec. 263, deeming the assessment order as erroneous and prejudicial to the interest of Revenue. Consequently, the Tribunal upheld the Principal Commissioner's order, dismissing the appeal of the assessee.In conclusion, the Appellate Tribunal ITAT Pune upheld the decision of the Principal Commissioner of Income-Tax to invoke jurisdiction under Sec. 263 of the Act, finding the assessment order erroneous and prejudicial to the Revenue's interest. The Tribunal dismissed the appeal of the assessee, emphasizing the importance of proper analysis and compliance with tax regulations in such transactions.