TaxTMI 
TaxTMI 
TaxTMI 
2021 (3) TMI 997
X X X X Extracts X X X X
X X X X Extracts X X X X
....1961. The action of the ld. PCIT is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by quashing the revision order of ld. PCIT passed u/s 263." 2. Briefly stated, the facts of the case are that the assessee filed his return of income on 08/10/2015 declaring total income of Rs. 1,37,644/-. The case of the assessee was selected for limited scrutiny for the purposes of verifying the deduction claimed under the head "capital gains" and pursuant to issuance of notice u/s 143(2) dated 20.09.2016 and notice u/s 142(1) alongwith questionnaire dated 19.01.2017 and after calling for the requisite details/information from the assessee, the returned income of the assessee was accepted and the assessment was completed u/s 143(3) vide order dated 22.12.2017. Subsequently, the assessment records were called for and examined by the ld. Pr. CIT and a show cause u/s 263 was issued for the reasons that the Assessing Officer has not examined whether the parcel of land sold as well as parcel of land subsequently purchased were being used for agricultural purposes for claiming deduction u/s 54B of the Act and secondly, the expenditure incurred on impro....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... not complete scrutiny. It was not the case that a large number of complicated issues were involved or a large number of documents were placed on record, rendering it probable that the Assessing Officer had missed some facts. It was submitted that benefits contained in section 54B and 54F are beneficial provisions and they need to be construed liberally. Reliance was placed on the Hon'ble Supreme Court decision in case of Bajaj Tempo Ltd. vs. CIT [1992] 196 ITR 188 (SC), Hon'ble Karnataka High Court decision in case of CIT vs. Sambandam Udaykumar 345 ITR 389 (Kar.) and in case of Shri Navin Jolly vs. ITO [2020] 117 taxmann.com 323 (Kar.). It was submitted that the adequate enquiries have been conducted by the Assessing Officer. The ld Pr. CIT has not made out any case of no enquiry. Once enquiries are admitted to have been conducted, the extent of such enquiries has to be left to the wisdom of the Assessing Officer. It was submitted that provision of section 263 nowhere allows the ld Pr. CIT to challenge the judicial wisdom of Assessing Officer or to replace his wisdom in the guise of revision unless the view taken by the Assessing Officer is not at all sustainable in law. It was s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....to the sale agreement dated 20.11.2014 which was registered on 10.12.2014 wherein it has been mentioned that the agricultural land sold was situated on the main road and there was no temporary or permanent construction thereon. It was further submitted that though the assessee has submitted Girdawari reports for Kasra No. 34 for the year 2012 to 2015, no agricultural activity is mentioned in respect of 0.02 Hectares of land in Kasra no. 34/489 in the last two years prior to the sale of the land. Therefore, it cannot be concluded that the said lands were used for agricultural purposes. It was further submitted that while allowing deduction u/s 54B of the Act, the Assessing Officer has also not verified whether the lands purchased for the purposes of claiming deduction u/s 54B were in fact agricultural lands and were used for agricultural purposes as per the Revenue records. Regarding claim of deduction u/s 54F, it was submitted that though the amount has been invested by the assessee in the capital gain account scheme, the AO has not carried out verification in terms of satisfaction of other conditions stipulated in section 54F. In support of his contentions, reliance was placed on ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d of land sold. (purchased from Smt. Tara Devi) 3.7 Copy of purchase deed of land sold. (purchased from Smt. Sarita Devi) 3.8 Copy of Bank Statements. 3.9 Copy of Computation of income 6. Thereafter, in his submission dated 04.12.2017, the assessee submitted copy of valuation report and copy of Khasra Girdawari reports. These submissions along with the aforesaid documents were examined by the Assessing officer and the claim of assessee towards cost of improvement and deductions claimed u/s 54B and 54F was allowed and the returned income was accepted and the assessment was completed u/s 143(3) vide order dated 22.12.2017. 7. There is thus no dispute that the Assessing officer has conducted the enquiry on the matter for which the case was selected for scrutiny and the details and records produced before him were examined and after satisfying himself, the Assessing officer finally concluded that the assessee has rightly computed and declared its income from capital gains and the returned income was accepted. Therefore, the question of lack of enquiry does not arise when the Assessing officer has taken up the scrutiny and issued the notice under section 142(1) along with a que....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he AO, the said order cannot be held to be erroneous unless the ld. PCIT holds and records the reason why it is erroneous. The precondition for invoking the jurisdiction under section 263 is that the ld. PCIT must come to the conclusion that the order of the AO is erroneous and is unsustainable in law. When the order passed by the AO is not erroneous for want of an enquiry, then it is incumbent upon the ld. PCIT to give a concluding finding and reasons that the order is not sustainable in law. An identical issue was considered by the Hon'ble Jurisdictional High Court in case of CIT vs. Ganpat Ram Vishnoi 296 ITR 292 (Raj.) wherein the Hon'ble High Court was pleased to held as under: " 7. In this connection, it would be relevant to refer to the material which was relied by the Tribunal to set aside the order of the CIT. The Tribunal noticed that as per the record of the proceedings; on 16-10-1995, the Assessing Officer required the assessee to produce documents or material in relation to 10 different items, which included the details of capital contributed by partners, details of purchases made in excess of Rs. 20,000 with evidence, confirmation of unsecured loans, amongst other....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sing Officer was required to make an enquiry, cannot be held to satisfy the test of existing necessary condition for invoking jurisdiction under section 263 of the Income-tax Act. 11. Undoubtedly, the jurisdiction under section 263 is wide and is meant to ensure that due revenue ought to reach the public treasury and if it does not reach on account of some mistake of law or fact committed by the Assessing Officer, the CIT can cancel that order and require the concerned Assessing Officer to pass a fresh order in accordance with law after holding a detailed enquiry. But when enquiry in fact has been conducted and the Assessing Officer has reached a particular conclusion, though reference to such enquiries has not been made in the order of the assessment, but the same is apparent from the record of the proceedings, in the present case, without anything to say how and why the enquiry conducted by the Assessing Officer was not in accordance with law, the invocation of jurisdiction by the CIT was unsustainable. As the exercise of jurisdiction by the CIT is founded on no material, it was liable to be set aside. Jurisdiction under section 263 cannot be invoked for making short enquiries ....