2022 (8) TMI 905 - AT - Income Tax

Tribunal quashes revision order, upholds original assessment.

Smt. Kalyani Seetharaman Versus ACIT, Non Corporate Circle 15 (1), Chennai

Smt. Kalyani Seetharaman Versus ACIT, Non Corporate Circle 15 (1), Chennai - TMI Issues:1. Whether the assessment order framed by the Assessing Officer is erroneous and prejudicial to the revenue due to valuation discrepancies.2. Whether the Principal Commissioner of Income Tax (PCIT) was justified in revising the assessment order under section 263 of the Income-tax Act.Analysis:1. The appeal arose from the revision order of the Principal Commissioner of Income Tax, Chennai-3 under section 263 of the Income-tax Act, challenging the assessment order for the AY 2016-17. The main issue was the variance between the sale consideration declared by the assessee and the value adopted by the sub-registrar for stamp duty purposes. The PCIT found the assessment order erroneous and prejudicial to revenue due to lack of proper verification of valuation. The PCIT directed the Assessing Officer to verify the facts and pass a fresh assessment order. The assessee contended that the sale consideration was reasonable based on a valuation report by an approved valuer, disputing the stamp valuation authority's higher value.2. The Tribunal noted that the difference between the sale consideration and the guideline value fixed by the stamp valuation authority does not automatically render the assessment erroneous. Citing a precedent from the Hon'ble Madras High Court, it was established that guideline value is an indicator for stamp duty calculation and does not dictate the actual property value. Therefore, the revision proceedings initiated by the PCIT were deemed unjustified. The PCIT failed to provide a valid reason for setting aside the assessment order, as there was no clear demonstration of how the order was erroneous or prejudicial to revenue.3. The Tribunal further emphasized that the PCIT's disregard of the valuation report submitted by the assessee and the lack of specific grounds for finding the assessment order faulty undermined the validity of the revision order. Quoting a judgment from the Punjab & Haryana High Court, it was highlighted that the Commissioner can only revise an order if it is genuinely erroneous or prejudicial to revenue, based on specific grounds. In this case, the PCIT's intervention based on valuation discrepancies was deemed unwarranted, leading to the quashing of the revision order and allowing the appeal of the assessee.In conclusion, the Tribunal ruled in favor of the assessee, quashing the revision order passed by the PCIT under section 263 of the Income-tax Act, thereby upholding the original assessment order for the AY 2016-17.