2019 (5) TMI 735

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.... AO under s. 143(3) of the Act dated 20.02.2015 concerning AY. 2012-13. 2. As per the grounds of appeal, the essential grievance of the assessee is that in the facts and the circumstances of the case the Pr.CIT was not justified in exercising revisionary powers under s.263 of the Act and thereby setting aside the assessment order passed under s.143(3) of the Act with a direction to the AO to frame assessment afresh after proper examination, inquiry and verification with reference to deduction under s.54B of the Act claimed by the assessee. 3. To adjudicate the grievance of the assessee, the relevant facts are taken note of as follows: 3.1 The assessee filed its return of income for AY 2012-13 declaring total income at Rs. 21,86,120/-.....

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....xemption claimed by you is not allowable. Failure to disallow your claim of Rs. 41,09,160/- is incorrect. From the above discussions, it appears that the said assessment order dated 20/02/2015 is erroneous and prejudicial to the interest of revenue to the extent mentioned above. You are, therefore, requested to show cause as to why the total income assessed u/s. 143(3) of the Act should not be enhanced or modified u/s. 263 of the Act..." 3.3 The assessee filed a reply thereto contesting the show cause notice and also challenged the foundation of jurisdiction under s.263 of the Act sought to be assumed by the Pr.CIT. From the case record, it appears that the AO made an addition to the long term capital gains of Rs. 49,55,300/-. The AO a....

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....ere the purchase of land has occurred prior to transfer of capital asset for the purposes of Section 54B(1) of the Act. The Pr.CIT observed that Section 54B(1) of the Act enjoins upon the assessee to purchase of land for agricultural purposes after the date of transfer of the original capital asset in order to avail the exemption contemplated under s.54B of the Act. But in the instant case, the assessee has purchased the asset prior to the date of transfer of the original capital asset to the tune of Rs. 41,09,160/-. The Pr.CIT alleged that the AO has not looked into this crucial aspect and finalized the assessment proceedings under s.143(3) of the Act without due diligence. The Pr.CIT, in essence, alleged that the assessment order is erron....

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....erials referred to and relied upon by the respective parties and case laws cited. 5.1 Supervisory jurisdiction vested under Section 263 of the Act enables the concerned Pr.CIT/CIT to review the records of any proceedings and order passed therein by the AO. It empowers the Revisional Commissioner concerned to call for and examine the records of another proceeding under the Act and if he considers that any order passed therein by the AO is erroneous in so far as it is prejudicial to the interest of the Revenue, then he may (after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary), pass such order thereon as the circumstances of the case justify, including the order en....