TaxTMI 
TaxTMI 
2021 (12) TMI 594
X X X X Extracts X X X X
X X X X Extracts X X X X
.... a fresh assessment order." 2. Brief facts of the case are that assessee is individual and having share in partnership firm, filed his return of income for assessment year 2015-16 on 28.01.2016 declaring income of Rs. 73,92,140/-.The case was selected for scrutiny. The assessment was completed under section 143(3) on 20.09.2016. Subsequently, the assessment order was revised by Ld. PCIT by exercising his jurisdiction power under section 263. Before revising the assessment order, the Ld. PCIT issued show cause notice under section 263 dated 23.02.2020, fixing the hearing on 23.01.2020. 3. In the show cause notice, the Ld. PCIT identify the issue that during the year under consideration, the assessee sold land at block No. 137, Vadod Olpad, Surat for a consideration of Rs. 2.14 crores. The assessee claimed deduction under section 54B against the Long Term Capital Gains (LTCG) earned thereon, on purchase of another agriculture land at Ved Karada, Surat. The assessee purchased another agricultural land within a period of two years, from the date of transfer and that the fact regarding utilization of land for agricultural activities before transfer remained to be verified properly....
X X X X Extracts X X X X
X X X X Extracts X X X X
....no agricultural activity was seen. The explanation of assessee that land was being used for seasonal vegetable and after harvesting the land is prepared for next seasonal crop, such assertion on the part of assessee was neither examined nor there is fact on record to conclude that portion of the land on which no agricultural activity was being done on the date of visiting of inspector, were used for agricultural activities. It was also held that the contention of the assessee is without any evidence and is not sufficient to conclude that entire land was used for agricultural purpose prior to date it was sold. As per the provision of section 54B, the Assessing Officer could verify the related direct evidence from the local authority's e.g. extract of 7/12 or would have brought on record including enquiry through GPS position in Goggle earth, Vikimapia or through other agencies like ISRO. The Assessing Officer did nothing to sort out the enquiry to verify the assertion of the assessee. The Ld. PCIT held that in absence of details narrated above there was failure on the part of Assessing Officer to bring on record the even correct facts or non-conduct of enquiry verification of facts.....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 7. To support his submissions the Ld. AR for the assessee also relied on the following decisions; • PCIT Vs Shreeji Prints (2021)130 taxmann.com 294 (SC), • PCIT Vs Shreeji Prints (2021)130 taxmann.com 293 (GHC), • CIT Vs Nirma Chemical works P Ltd (2009) 309 ITR 67, • Aryan Arcade Ltd Vs CIT (2017) 84 taxmann.com293. 8. On the other hand the Ld. CIT-DR for the revenue supported the order of Ld. PCIT. The Ld. CIT-DR for the revenue submits that during the assessment the assessing officer simply accepted the submissions of the assessee. The assessing officer has not conducted proper inquiries like to verify direct evidence from the local authority's e.g. extract of 7/12 or enquiry through GPS position in Goggle earth, Vikimapia or through other government agencies. The Ld. CIT-DR submits that the assessment order passed by the assessing officer is erroneous as the same was passed without making due verification of fact in allowing exemption under section 54B, and in so far as prejudicial to the interest of revenue and prayed to uphold the order passed by Ld. PCIT. 9. In rejoinder submission, the ld.AR of the assessee subm....
X X X X Extracts X X X X
X X X X Extracts X X X X
....g erroneous. In the same category fall orders passed without applying the principles of natural justice or without application of mind. The phrase 'prejudicial to the interests of the revenue' is not an expression of art and is not defined in the Act. The scheme of the Act is to levy and collect tax in accordance with the provisions of the Act and this task is entrusted to the revenue. If due to an erroneous order of the Income-tax Officer, the revenue is losing tax lawfully payable by a person, it will certainly be prejudicial to the interests of the revenue. The phrase 'prejudicial to the interests of the revenue' has to be read in conjunction with an erroneous order passed by the Assessing Officer. Every loss of revenue as a consequence of an order of the Assessing Officer, cannot be treated as prejudicial to the interests of the revenue, for example, when an Income-tax Officer adopted one of the courses permissible in law and it has resulted in loss of revenue, or where two views are possible and the Income-tax Officer has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the rev....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hat the estimate made by the officer concerned was on the lower side and left to the Commissioner he would have estimated the income at a figure higher than the one determined by the ITO. That would not vest the Commissioner with power to re-examine the accounts and determine the income himself at a higher figure. It is because the ITO has exercised the quasi-judicial power vested in him in accordance with law and arrived at a conclusion and such a conclusion cannot be termed to be erroneous simply because the Commissioner does not feel satisfied with the conclusion. It may be said in such a case that in the opinion of the Commissioner the order in question is prejudicial to the interests of the revenue. But that by itself will not be enough to vest the Commissioner with the power of suo-motu revision because the first requirement, viz., that the order is erroneous, is absent. Similarly, if an order is erroneous but not prejudicial to the interests of the revenue, then also the power of suo-motu revision cannot be exercised. Any and every erroneous order cannot be the subject-matter of revision because the second requirement also must be fulfilled. There must be some prima facie ma....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mical Works (P) Ltd (supra), the Hon'ble High Court also held that when assessing officer after making due inquiries had adopted one of the view and granted partial relief, merely because Commissioner took a different view of the matter, it would not be sufficient to permit commissioner to exercise his powers under section 263. The Hon'ble Court in para 22 of its order on the objection of the revenue that there is no discussion of the issue in the assessment order held that the contention on behalf of the revenue that the assessment order does not reflect any application of mind as to the eligibility or otherwise under section 80-I of the Act requires to be noted to be rejected. An assessment order cannot incorporate reasons for making/granting a claim of deduction. If it does so, an assessment order would cease to be an order and become an epic some. The reasons are not far to seek. Firstly, it would cast an almost impossible burden on the Assessing Officer, considering the workload that he carries and the period of limitation within which an order is required to be made; and, secondly, the order is an appealable order. An appeal lies, would be filed, only against disallowances wh....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... Considering the aforesaid evidence, wherein the assessee has clearly demonstrated that the land under question was being used for agriculture purpose, therefore, we are of the view that the assessing officer has taken a reasonable and plausible view, which cannot be branded as erroneous. Since, the assessing officer has accepted the explanation of assessee, which was coupled with evidence; the assessing officer may not have thought to pass detailed order on the issue examined by her. In our view, once the contention of the assessee on a particular issue is accepted by assessing officer, the order is not appealable order and no appeal would be filed, against such accepted position as an assessee will not feel aggrieved with it, it is not necessary to give reasons of acceptance of such pleas. Similar view has been taken by Hon'ble Jurisdictional High Court in CIT Vs Nirma Chemical Works Ltd (supra). 16. So far as the observation of ld PCIT that the assessing officer did nothing to sort out the enquiry to verify the assertion of the assessee and there was failure on the part of Assessing Officer to bring on record the even correct facts or non-conduct of enquiry verification of f....