Tribunal allows delayed appeal due to Covid-19, partly quashes revision order on rental income.

The Tribunal condoned the delay of 637 days in filing the appeal due to the Covid-19 pandemic, admitting the appeal for adjudication on merits. It partly allowed the Assessee's appeal, quashing the revision order on the issue of rental income. The Tribunal found that the revision order on the claim of deduction under section 54 of the Income Tax Act was academic as the Assessment Officer had already examined the issue during limited scrutiny assessment.

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Issues:
1. Condonation of delay in filing appeal due to Covid-19 pandemic.
2. Revision order passed by Principal Commissioner of Income Tax u/s.263 of the Income Tax Act.
3. Limited scrutiny assessment for deduction from capital gains.
4. Examination of rental income under the head 'income from house property'.

Issue 1: Condonation of Delay
The appeal by the Assessee was barred by limitation by 637 days due to the Covid-19 pandemic. The Assessee filed a condonation petition supported by an affidavit. The Hon'ble Bench considered the Supreme Court's order regarding the Covid-19 pandemic and decided to condone the delay of 637 days, admitting the appeal for adjudication on merits.

Issue 2: Revision Order
The appeal pertained to the revision order passed by the Principal Commissioner of Income Tax under section 263 of the Income Tax Act. The revision order was issued after the Assessment Officer framed a limited scrutiny assessment for the Assessment Year 2015-2016. The revision was based on discrepancies in the Assessee's claim of deduction under section 54 of the Act and the rental income declared.

Issue 3: Limited Scrutiny Assessment
The Assessment Officer conducted a limited scrutiny assessment to verify the Assessee's claim of deduction from capital gains under section 54 of the Act. Discrepancies were found in the claimed deduction amount and the actual cost reported by a registered Evaluator. The Assessment Officer added the differential amount to the Assessee's returned income.

Issue 4: Examination of Rental Income
The Principal Commissioner of Income Tax issued a show-cause notice questioning the Assessee's declared rental income under the head 'income from house property.' The Assessee did not respond, leading to the PCIT directing the Assessment Officer to frame a reassessment. The Tribunal held that the issue of rental income, not raised during the limited scrutiny assessment, could not be subject to revision under section 263 of the Act.

In conclusion, the Tribunal partly allowed the Assessee's appeal, quashing the revision order on the issue of rental income. The Tribunal found that the revision order on the claim of deduction under section 54 of the Act was merely academic, as the Assessment Officer had already examined the issue.

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