AI Drafter 
TaxTMI 
TaxTMI 
2023 (2) TMI 962
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....rder the issue of exemption granted u/s 54F of the Act to the appellant. 3) The ld. PCIT has erred in law and on facts in directing the ld. A.O to consider the issues already considered by the ld. A.O while passing the original assessment order and then frame the fresh assessment order. 4) The learned PCIT has erred in law and on facts in assuming jurisdiction u/s 263 of the Act. 5) The appellant craves leave to add, amend, alter, modify, substitute, delete, change or vary all or any of the ground or grounds of appeal." 3. Succinctly, the factual panorama of the case is that assessee before us is an Individual and filed his return of income for the assessment year under, (A.Y.) 2017-18 on 23.10.2017, declaring total income of Rs.39,54,380/-. Thereafter the case was selected for limited scrutiny and the reasons for selection were (i) share capital/capital(ii) deduction/exemption from capital gains and (iii) other income reported in Schedule A-OL. The assessment proceedings were completed u/s143(3) of the Act, on 24.12.2019 by accepting the returned income. 4. Later, the Ld.PCIT has exercised his jurisdictional power u/s 263 of the Act. On going throu....
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.... initiated by Ld. PCIT by issuing show cause notice bearing DIN ITBA/REV/F/REV1/2021-22/1040733831(1) dated 15.03.2022 and duly served on assessee. 6. In response to the show cause notice issued, the assessee submitted his reply through e-proceedings and a copy has been submitted to Ld. PCIT with all the enclosures. The relevant para of the reply of assessee is reproduced as under: 1. "The said return of income was selected for limited scrutiny u/s 143(3) of the Act to verify claim of exemption u/s 54F. During the course of hearing A.O had raised several questions and made inquiries specifically to verify my claim u/s 54F, which were replied satisfactorily in due course and after examining all the facts and evidences put on record, AO passed the order u/s 143(3) allowing exemption/s 54F. 2. AO had verified all the records after inquiries and with application of mind he found case fit for allowance of exemption u/s 54F and he passed an order, allowing exemption. The said allowance is as per law. Therefore, said order cannot be held erroneous which requires revision. 3. I did not hold more than one residential property (an affidavit to the same is attach....
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....as MSME, Municipal Corporation Professional Tax Receipt, ITR of Yaminiben 11,15,600 Property @ 76 Saikutir Open plot Open plot Affidavit 1,50,000 7. However, Ld. PCIT rejected the contention of the assessee and observed the following mistakes/error in the assessment order along with and vis-à-vis interpretation of explanation submitted by the assessee: (i) The assessee argued that the AO had verified all the records and after inquired issue and with application of mind, he found case fit for allowing of deduction u/s 54F of the Act. However, during the course of the assessment proceedings, neither the AO raised any specific query, nor any information was submitted by the assessee in respect of number of residential properties owned by the assessee, during the year under consideration. Therefore, the issue of deduction claimed u/s 54F remained unverified with respect to the condition specified in proviso (a)(i) of section 54F of the Act, during course of the assessment proceedings. (ii) The assessee stated as he did not hold more than residential properties during the subject year. However, on going through the balance-sheet submitted by....
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....erefore, Ld. PCIT held that the assessment order passed u/s 143(3) of the Act dated 24.12.2019 for the assessment year under consideration in the case of assessee was set aside with a direction to the Assessing Officer to pass fresh assessment order after taking into consideration the issues raised by Ld. PCIT. 9.Aggrieved by the order of Ld.PCIT the assessee is in appeal before us. 10. We have heard the rival contentions, perused the material on record and duly considered facts of the case in the light of the applicable legal position. Shri Hiren M. Diwan, Learned Counsel for the assessee, begins by pointing out that during assessment proceedings, the Assessing Officer has issued notice u/s143(2) dated 06.05.2019, which is placed at paper book page-1, wherein it is specially mentioned that assessee's case was selected for limited scrutiny to examine the share capital and deduction exemption from capital gains and income return in Schedule A-OL. The Ld. Counsel stated that Assessing Officer has issued notice u/s 142(1) dated 6.5.2019, which is placed at paper book pages-2 & 3, wherein the Assessing Officer has asked the details and documents in respect of the issue raised by ....
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.... licence with SMC and copy of affidavit dated 19.03.2022, were submitted which is placed at paper book pages 171 to 179. Based on the above documents and statements submitted before the Assessing Officer, the Ld. Counsel contended that assessing officer applied his mind and took a plausible view, hence order passed by the Assessing Officer is neither erroneous nor prejudicial to the interest of Revenue. 12. Shri Diwan, also pleaded that just because the Assessing Officer has passed the order in brief and does not bring the issue in assessment order, which was raised by Ld. PCIT in his order passed u/s 263 of the Act, does not mean that order is erroneous and Assessing Officer has not applied his mind. The Assessing Officer needs to mention in his order only those issues which are against the assessee and not those issues which are not against the assessee. The ld Counsel, to bolster his stand relied on certain precedents, which we have gone through. The ld Counsel, finally prays the Bench to quash the order passed by ld PCIT. 13. On the other hand, Learned CIT-DR for the Revenue argued that Assessing Officer has never discussed and examined the issues raised by the Ld. PCIT. ....
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....or a very long period. All these facts and evidences were before the Assessing Officer. The Assessing Officer, as an adjudicator and investigator, has applied his mind and framed the assessment order, thus such order passed by the Assessing Officer is neither erroneous nor prejudicial to the interest of revenue. 16. We note that Revenue had no right to appeal to the Commissioner (Appeals) against any order passed by the Income-tax Officer. Therefore, this provision, corresponding to section 33B of the 1922 Act, was enacted to arm the Commissioner with powers of revision whenever there is any erroneous order prejudicial to the revenue. There must be an error in the order and it must be "prejudicial to the revenue". For example, an order of the Assessing Officer in which he merely follows the order of the Tribunal for an earlier year, which in turn had applied the decision of the Supreme Court cannot be said to be erroneous. If the error is advantageous to the revenue, then the Principal Commissioner of Income Tax cannot invoke section 263, if the order passed by the assessing officer is not erroneous and order was passed by him within the legal framework. 17. The law with rega....