TaxTMI 
TaxTMI 
2020 (9) TMI 825
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....43/Ahd/2019 for the assessment year 2014-15. 2 The Revenue has proposed the following question of law for the consideration of this Court: "Whether Appellate Tribunal was correct in law and on facts in quashing the revision order passed under Section 263 of the Act without appreciating the fact that the Assessing Officer has categorically failed to verify the deduction under Section 54F of the Act resulting the order of the Assessing Officer being erroneous and prejudicial to the interest of revenue?" 3 We have heard Mr. Manish Bhatt, the learned senior counsel appearing for the appellant. 4 It appears from the materials on record that the case on hand is one of scrutiny assessment under Section 143(3) of the Act, which came to be comp....
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....E' of superstructure had three independent units with a separate kitchen, separate entrance and located on different floors. It is the case of the department that such units could not be said to be contiguous units to be called one single residential house against which the exemption under Section 54F could be claimed by the assessee. 7 Thus, according to the department, the assessee by purchasing three independent houses vide a single deed could be said to have erroneously claimed the exemption under Section 54F of the Act and was not eligible to claim exemption for purchase / construction of only one residential house. 8 In such circumstances referred to above, the Principal Commissioner, vide his order dated 25th March 2019 passed ....
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....on involved, the order of the AO is erroneous in so far as prejudicial to the interest of the Revenue. 9.1 As pointed out on behalf of the assessee, two pre-requisites must coexist before the designated authority could exercise the revisional jurisdiction conferred on him namely; the order should be (I) erroneous & (ii) the error must be such that it is prejudicial to the interests of the Revenue. However, an erroneous order does not necessarily mean an order with which the Pr.ClT is unable to agree. The AO while passing an order of assessment, performs judicial functions. An order of assessment passed by the AO cannot be interfered only because an another view is also possible on the issue as held in CIT vs. Greenworld Corporation (2009)....
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.... 54 & 54F of the Act. Different Courts noted above have echoed that expression "a residential house' would encompass different residential units located on the different floors of the same building. On facts, we note that all the three units are located on the different floors of the same structure and purchased by the assessee by a common deed of conveyance. In the facts and circumstances, plurality of opinion about the allowability of deduction surely exists even if it is presumed for a moment that view adopted by the AO in favour of the assessee is not singular or absolute. In the circumstances, where the language couched in Section 54F of the Act has been interpreted in a manner favourable to assessee and multiple residential units were....
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.... the lack/inadequacy of inquiry should result in a substantive error or a visible abnormality resulting in loss of Revenue. The claim of the assessee towards deductibility under s.54F of the Act cannot be regarded to be erroneous in the light of judicial precedents and therefore lesser degree of inquiry made on the issue per se would not cover the situation in the sweep of expression 'erroneous'. A plausible view admitted in assessment stage in exercise of quasi-judícial function cannot be dislodged in a light hearted manner in the name of inadequacy in inquiries or verification as perceived in the opinion of the revisional authority. 9.4 On a broader reckoning of facts and law enunciated in this regard, we find merit in both the p....
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.... In such proceedings, the Assessing Officer must have passed an order. The Commissioner should consider that the assessment order is erroneous and prejudicial to the interest of the Revenue. 13 When the aforesaid factors co-exists, the Commissioner will have the jurisdiction to take action under Section 263 of the Act. 14 It is also an essential condition for the exercise of power under Section 263 of the Act that the Commissioner of Income Tax must find an error which is found in the assessment order of the Income Tax Officer prejudicial to the interest of the Revenue and conclusion of the Commissioner that the order is erroneous and prejudicial to the Revenue must be based on materials and contentions raised by the assessee on opportuni....