Tribunal sets aside CIT's revision order, remits for proper review and hearing.

The Tribunal allowed the appeal of the assessee for statistical purposes, setting aside the revision order under Section 263 initiated by the CIT. The matter was remitted to the Assessing Officer for reconsideration, emphasizing the need for proper enquiry and providing the assessee with an effective opportunity of hearing. The Assessing Officer was directed to review the relevant records and make a decision in accordance with the decisions of the jurisdictional High Court.

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Issues Involved:
1. Validity of proceedings initiated under Section 263 of the Income Tax Act, 1961.
2. Error in the assessment order prejudicial to the interest of the Revenue.
3. Compliance with conditions under Section 54F for claiming deduction.
4. Sufficient opportunity of hearing provided by the CIT.
5. Adequate enquiry by the Assessing Officer.

Detailed Analysis:

1. Validity of Proceedings Initiated Under Section 263:
The assessee contended that the conditions precedent for initiating proceedings under Section 263 were absent, making the order passed under this section liable to be cancelled. The CIT initiated the revision on the grounds that the assessee did not comply with the conditions under Section 54F, specifically regarding the deposit of the amount in the capital gain account scheme before the due date of filing the return and the construction of the new house within three years from the date of transfer.

2. Error in the Assessment Order Prejudicial to the Interest of the Revenue:
The CIT noted that the assessee deposited Rs. 11,50,000 in the capital gain scheme on 14.12.2009 and purchased a site on 6.5.2010 for Rs. 21,60,000. The CIT held that the assessee was not eligible for deduction under Section 54F as the conditions were not met, thus setting aside the assessment order and directing the Assessing Officer to pass a fresh order.

3. Compliance with Conditions Under Section 54F for Claiming Deduction:
The assessee argued that the investment in the purchase of the site was made within the prescribed period under Section 54F, and the house was constructed in 2012, making him eligible for the deduction. The CIT, however, noted that the investment was not made within the stipulated time and the construction was not completed within three years, thus disallowing the deduction.

4. Sufficient Opportunity of Hearing Provided by the CIT:
The assessee claimed that the CIT did not grant sufficient opportunity before passing the impugned order. The show cause notice was issued on 28.02.2014, and the case was posted on 14.3.2014. The assessee requested an extension, but the CIT granted only one week and passed the order on 27.3.2014 without proper intimation or service of notice for the hearing on 21.3.2014. This lack of effective opportunity was noted as a procedural lapse.

5. Adequate Enquiry by the Assessing Officer:
The Tribunal found that the Assessing Officer did not conduct a proper enquiry into the satisfaction of conditions under Section 54/54F. Although the assessee furnished relevant details during the assessment, the Assessing Officer did not discuss the satisfaction of conditions in the order. The Tribunal noted that the assessment order lacked adequate and proper enquiry on the issue, thus justifying the CIT's action to some extent.

Conclusion:
The Tribunal, considering the rival submissions and relevant material, found that the CIT did not afford an effective opportunity of hearing to the assessee. The Tribunal also noted the lack of adequate enquiry by the Assessing Officer. Therefore, the Tribunal set aside the impugned revision order under Section 263 and remitted the matter to the Assessing Officer for reconsideration, directing the Assessing Officer to consider the relevant record and decide the issue in light of the decisions of the jurisdictional High Court.

Result:
The appeal of the assessee was allowed for statistical purposes, and the matter was remitted to the record of the Assessing Officer for fresh consideration.

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