2022 (11) TMI 119

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.... etc., has for AY 2015-16 e-filed her return of income [for short "ITR"] on 26/08/2015 declaring total income of Rs. 20,76,520/- after a claim of chapter VI-A deduction for Rs. 1,60,000/-. The case of the assessee was subjected to scrutiny under CASS by service of notice u/s. 143(2) of the Act, wherein the valuation adopted for computation of capital gain was revised and assessment was culminated u/s. 143(3) of the Act determining the total income at Rs. 67,58,100/- upon recomputation of long term capital gain arisen on transfer of land, and after allowing a claim of exemption u/s. 54F thereagainst for Rs. 54,22,646/- for investment into new residential house. The same is not the subject matter of appeal before first appellate authority [for short "FAA"] 4. The Ld. CCIT perusing the order of his lower tax authority, contending one as erroneous and prejudicial to the interest of revenues for allowing the assessee a claim of exemption u/s. 54F by turning blind eye to the disqualification envisaged in proviso to section 54F(1) of the Act and further picturing the absence of inquiries into source of investment made in new asset, has assumed the revisionary jurisdiction and by service ....

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....s placed on record a copy of 'The Taxation and Other Laws (Relaxation and Amendment of Certain Provision) Act, 2020' [for short "Relaxation Act"] & a notification dt. 31/12/2020 and adverting to suo-moto order of Hon'ble Supreme Court on limitation (MA-21/2022) submitted that, the revisionary proceedings including the final order u/s. 263 of the Act is well within the extended period of limitation. Further adverting to explanation 2 to section 263(1), the Ld. DR argued that, ostensibly the order of assessment suffers from blatant error in allowing the claim of exemption u/s. 54F in violation of proviso to section 54F(1), and in the event, nothing more is required to demonstrate erroneousness of the order and hence 263 order needs to be sustained. 7. After hearing to the rival contentions of both the parties; and subject to the provisions of rule 18 of Income Tax Appellate Tribunal Rules, 1963 [for short "ITAT, Rules"] perused the material placed on records till the date of conclusive hearing and duly considered the facts of the case in the light of settled legal position and case laws relied upon by the appellant as well the respondent. 8. As it transpired that, the p....

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.... be revised i.e. two years from the end of financial year in which order sought to be revised was passed. In the present case, the order of assessment which was subjected to revision was passed u/s. 143(3) of the Act on 21/12/2017, which falls in the financial 2017-2018. Whereas the proceedings u/s. 263 of the Act was initiated by SCN dt. 11/01/2021 and completed on 17/02/2021. Prima facie, the time limit of two years therefrom seems to have ended on the last date i.e. 31/03/2020 within which aforestated assessment could be subjected to revision. However due to nation-wide lockdown imposed, the Central Govt. of India through Relaxation Act, 2020' r.w. notification dt. 31/12/2020, has extended the period of limitation upto 31/03/2021 for completion of any proceedings or passing any order or issuance of any notice, intimation, notification, sanction or approval or such other action by whatever name called by any authority, commission or tribunal by whatever name called under the provisions of specified Act which inter-alia includes Income Tax Act, 1961. In the light of provisions of section 3(1)(a) of Relaxation Act, 2020 & notification dt. 31/12/2020 r.w. press release, we witne....

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....of twin conditions, then it triggers further phases otherwise jurisdiction fails. c. In third stage, the assessee is put to show cause notice pointing out the reasons for the formation of belief that action u/s. 263 is required and reasonable but sufficient opportunity is accorded to the assessee to rebut the belief and jurisdiction by producing evidential material in support. d. In fourth phase, the authority conducts necessary inquiry into material placed before & after hearing the assessee, concludes the revisionary proceedings by express order either dropping the proceedings or directing the assessing officer for modification or for de-nova adjudication as the case may be. 13. It pertinent to take note of the fundamental tests propounded to judge the revisionary action in various judicial precedents including the landmark decision of Hon'ble Supreme Court in "Malabar Industries Vs CIT" reported in 243 ITR 83 and two of such test are; a. An incorrect assumption of facts or an incorrect application of law will suffice the requirement as to order being erroneous. b. If the order is passed without application of mind, will fall under the category of erroneous order. 1....