2022 (5) TMI 106 - AT - Income Tax

Tribunal upholds setting aside of assessment order under due to deduction discrepancies

The Tribunal adjourned the case multiple times due to the assessee's family emergencies related to the Covid-19 pandemic. Despite the adjournments, the ... Revision u/s 263 - claim of deduction u/s 54B - HELD THAT:- Perusal of the details furnished in respect of capital gain revealed that capital asset was held by the assessee for less than two years and deduction claimed under section 54B was therefore incorrectly claimed by the assessee. AO while framing the assessment order u/s 143(3) of the Act has not looked into this issue, which is erroneous and prejudicial to the interest of the Revenue. Therefore, a show cause notice under section 263 of the Act was issued on 12.1.2016 to the assessee. We find that this is the twelveth hearing of the matter before the Tribunal. None appeared on behalf of the assessee. Though adjournment application has again been filed, but no paper book has been filed by the assessee giving material for considering the stand of the assessee. We find that there was no infirmity in the order of the ld.Pr.CIT for invocation of power u/s 263 which, the ld.Pr.CIT set aside assessment order passed under section 143(3) as being erroneous and prejudicial to the interest of the Revenue and further direction to the AO to make a fresh assessment order. Even otherwise also, there is nothing before us to deviate from the view taken by the ld.Pr.CIT on this issue coupled with the fact that there is no assistance rendered by the assessee to adjudicate the issue involved in the ground raised before us without supporting evidences. As a consequence, the grounds raised by the assessee stand rejected - Decided against assessee. Issues:1. Grant of adjournment due to family emergency2. Correctness of assessment order under section 263 of the Income Tax Act, 19613. Validity of deduction claimed under section 54B of the Act4. Jurisdiction of the Principal Commissioner of Income TaxIssue 1: Grant of adjournment due to family emergencyThe appeal was filed by the assessee against an order passed by the Pr.Commissioner of Income-tax, Rajkot-1. The assessee sought an adjournment due to family emergencies related to the Covid-19 pandemic. Despite repeated adjournments and lack of appearance by the assessee, the Tribunal adjourned the matter to provide a fair opportunity. However, as the assessee did not appear, the Tribunal proceeded ex parte.Issue 2: Correctness of assessment order under section 263 of the Income Tax Act, 1961The Pr.CIT observed that the assessee had incorrectly claimed deduction under section 54B of the Act regarding the transfer of an agriculture land, which was held for less than two years. The Pr.CIT issued a show cause notice under section 263, setting aside the assessment order and directing a fresh assessment. The assessee contended that the land was held for over two years, but the Pr.CIT found discrepancies in the submission and deemed the assessment order erroneous for lack of proper verification.Issue 3: Validity of deduction claimed under section 54B of the ActThe assessee claimed deduction under section 54B for the transfer of a capital asset, an agriculture land. The Pr.CIT found that the land was not held for the required two years before transfer, and investments in other lands were made before the transfer date. The Pr.CIT concluded that the deduction claimed was not valid and required disallowance.Issue 4: Jurisdiction of the Principal Commissioner of Income TaxThe assessee challenged the jurisdiction of the Principal Commissioner of Income Tax in passing the order under section 263. The Tribunal upheld the Pr.CIT's order, noting the lack of assistance from the assessee and the correctness of the decision to set aside the assessment order. The grounds raised by the assessee were rejected, and the Pr.CIT's order was confirmed, resulting in the dismissal of the appeal.This comprehensive summary covers the issues involved in the legal judgment, detailing the circumstances, arguments, and decisions made by the authorities and the Tribunal.