2019 (3) TMI 1461

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....dun regarding the interest income earned by the assessee on different fixed deposit receipts, proceedings u/s 148 were initiated in this case as the assessee was not filing her return of income, whereas, her interest income was reported at Rs. 4,71,064/- during the year under consideration. Accordingly, notice u/s 148 was issued. In response thereto assessee filed the return of income declaring income of Rs. 3,95,870/-. The AO issued statutory notices. The assessee filed a written submission. The AO accepted the return of income and completed the assessment vide order dated 30.01.2014. 4. The Ld. Pr. CIT initiated the proceedings u/s 263 of the Act vide show cause notice dated 06/11/2015 to examine the issue of taxability of sale proceeds of the lands sold on various dates. The details are mentioned at page 1 of the impugned order in 6 Sl. No., mentioning date of sale, the name of the seller (one of them is assessee), names of purchasers, sale consideration and share received by the assessee. The assessee filed replies before Pr. CIT in which it was explained that assessee inherited the land from her father Late Shri Chaman Lal Kapoor after his death along with two co-owners namel....

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.... has no objection to the sales made. Lands were sold in sq. mtrs. The sale deeds were executed in F.Y. 2005-06 and 2006-07. It was further noticed that land sold is situated within an industrial notified area Uttaranchal and was being purchased for an industrial purposes. Thus, land in question sold in assessment year under appeal by the assessee and the coowners were not remained agricultural land. The Ld. Pr. CIT thus, noted that the issue of taxability of sale proceeds of the above referred sale deeds made were not examined by the ITO at the time of making the assessment on dated 30/01/2014, therefore, it was cancelled with the direction to make fresh assessment to examine the taxability of the above sale proceeds. 5. Ld. Counsel for the assessee referred to notices issued by AO at the assessment stage and replies filed by the assessee in which the assessee explained that land in question is agricultural land and is exempt from tax. The assessee furnished copies of the sale deed and other Revenue records before AO which have been examined by AO at assessment stage. Copy of one of the sale deed is also filed in the paper book in which it is mentioned that land thereby sold is si....

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.... in the assessment order, therefore, Ld. Pr. CIT correctly cancel the same and restore the issue to AO for passing the order afresh. Ld. DR submitted that since AO did not make any enquiry while making the assessment and accepted the explanation of the assessee without examination, therefore, assessment order is rightly held to be erroneous in so far as prejudicial to the interest of the Revenue. In support of this proposition, Ld. DR relied upon the following decisions: 1. Deniel Merchants Pvt. Ltd. vs. ITO (Appeal No. 2396/2017) dated 29.11.2017 (SC); 2. BSES Rajdhani Power Ltd. vs. PCIT (2017) 399 ITR 228 (Del.); 3. Surya Financial Services Ltd. vs. PCIT (ITA No. 2158/Del/2017); 4. Malabar Industrial Co. Ltd. vs. CIT (2000) 243 ITR 83 (SC) 5. Rajmandir Estates (P) Ltd. vs. PCIT 240 Taxman 306 (Calcutta); 6. Rajmandir Estates (P) Ltd. vs. PCIT 245 Taxman 127 (SC) 7. Commissioner of Income Tax Mumbai vs. Amitabh Bachan Civil Appeal 5009 of 2016 dated 11.05.2016 (SC). 7. Ld. Counsel for assessee in the rejoinder admitted that the AO in pursuance to the order passed u/s 263 of the Act has made an addition against the assessee against which assessee is in appeal before....

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....een made; b) The order is passed allowing any relief without inquiring into the claim; c) The order has not been made in accordance with any order, direction or instruction issued by the Board u/s 119; or d) The order has not been passed in accordance with any decision which is prejudicial to the assessee, rendered by the jurisdictional High Court or Supreme Court in the case of the assessee or any other person." 9. The above explanation is application to assessment year under appeal because the order is passed by the Pr. CIT on 31/12/2015. According to this explanation the assessment order passed by the AO shall be deemed to be erroneous in so far as it is prejudicial to the interest of the Revenue, if the assessment order is passed without making enquiries or verification which should have been made by the AO and that orders have been passed allowing any relief without enquiry into the claim. The above facts clearly show that though the AO asked for the explanation of the assessee but the AO never made any enquiry or verification of such a claim and allowed the relief to the assessee without passing any order thereon and without enquiry into the claim of the assessee. Ther....