TaxTMI 
TaxTMI 
2022 (11) TMI 1459
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....f the Act, 1961. 3. On the facts and in the circumstances of the case as well as law on the subject, the learned Commissioner of the Income Tax has erred in violating the principles of natural justice by not the mentioning the grounds for initiating action u/s 263 of Income Tax Act, 1961 in the show cause notice issued. As such the order passed u/s 263 is void ab-initio. The action of the Ld. CIT was wholly unreasonable, uncalled for the bad in law. 4. On the facts and in the circumstances of the case as well as law on the subject, that the order of u/s 263 is merely 'change in opinion'. The assessment order u/s 143(3) rws.147 of the Income Tax Act as well as order u/s 154 of the Act passed by the Ld. AO does not in any way represent erroneous order. Hence, the action of the Ld. CIT was wholly unreasonable, uncalled for and bad in law. 5. On the facts and in the circumstances of the case as well as law on the subject, the learned Commissioner of the Income Tax has grievously erred I assuming that the details and explanation in respect of land sold by the assessee was not duly verified and the Assessing Officer had not made inquiries during the course of proceedings and withou....
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....t year. In order to examine the information reported by Sub-Registrar concerned, notice under section 133(6) dated 01.02.2019 was issued to the assessee. The Assessing Officer recorded that no information in response to notice said notice was reported. The Assessing Officer after recording reasons of reopening that the income of assessee escape assessment, obtained approval of higher authorities and issued notice under section 148 dated 25.03.2019. The assessee, in response to the notice under section 148, filed her return of income for assessment year 2012-13 on 22.06.2019 declaring income of Rs. 82,360/-. In the computation of income has shown Long Term Capital Loss of Rs. 2,32,10,950/-. The assessee furnished copy of return of income (ROI), computation of income and copy of sale deed. The assessee was served notice under section 142(1) dated 20.09.2019 to explain as to why return should not be treated as invalid as it was filed beyond the time given in notice under section 148 of the Act. The assessing officer recorded that reasons recorded was provided to the assessee. The assessee filed objection against the re-opening. The objection of assessee was rejected by a speaking orde....
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....the basis of report DVO, the Assessing Officer noted that DVO has determined the value of property as on 31.03.2012 at Rs. 2,61,96,500/-. Accordingly, the Assessing Officer worked out the Long Term Capital Loss at (-) Rs. 65,14,450/- in the following manner: - Sr.No. Particulars Full value 1 Full value sale consideration as per sale deed 95,00,000 2 FMV estimated by the DVO as on date of sale 2,61,96,500 3 Index cost of acquisition 785/100 x 41,67,000/- 3,27,10,950 4 Capital loss (2-3) (-) 65,14,450 5 Deduction claim u/s 54/54F NIL 6 Net Long Term Capital Loss (-)65,14,450 5. The assessment order dated 24.12.2019 as well as rectification order dated 27.01.2020 was revised by Ld. PCIT by exercising his jurisdictional power under section 263 of the Act. Before revised the assessment order, Ld. PCIT vide his order dated 22.03.2022 under section 263 of the Act. The ld PCIT issued show cause notice dated 05.03.202 to the assessee. In the show cause notice, the Ld. PCIT recorded that Assessing Officer passed assessment order dated 24.12.2019 under section 143(3) r.w.s. 147 in allowing deduction of Rs. 95 lakhs which should have been made in respect to the cost of ac....
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....order dated 24.12.2019 by passing a rectification order under section 154 on 27.01.2020, wherein the sale consideration has been adopted at Rs. 2,61,96,500/- as estimated by DVO and deduction of Rs. 3,27,10,950/- has been allowed on account of index cost of acquisition to assess the capital loss. The Assessing Officer erred in allowing deduction of index loss of land, when the same was not accepted during the assessment proceedings. Thus, the deduction of Rs. 3,27,10,950/- was allowed without there being any apparent mistake on record. The Assessing Officer allowed deduction of Rs. 95 lakhs without making any inquiry which should have been made with respect to cost of acquisition as on 01.04.1981 without application of mind. Thus, the assessment order as well as rectification order under section 154 are erroneous in so far as it is prejudicial to the interest of revenue. The Ld. PCIT by referring certain case law held that Explanation-2 to Section 263 is clearly applicable on the facts of this case as Assessing Officer had passed the assessment order without making inquiry or verification, which should have been made in respect of issues and allowed excess relief to the assessee. T....
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....hodhan ((2014) 367 ITR 238 (Gujarat) and Bombay High Court in CIT Vs Pooja Prints (2014) 360 ITR 697 (Bom). 9. The ld AR for the assessee further submits that the case of assessee was reopened under section 147, on the basis of information with the assessing officer that the assessee had sold agriculture land situated at Village Valak, Surat vide sale deed executed on 29.02.2012 and registered on 31.03.2012, wherein the assessee has shown value of asset in the registered sale deed at Rs. 95 lakhs. The purchaser paid stamp duty of Rs. 17,02,000/- for the purpose of registration of document. The Sub-Registrar, Kamrej valued the sale transaction of land at Rs. 3,47,25,000/- on the basis of jantri rate applicable at the relevant time. The assessing officer on the basis of information examined the fact and passed the assessment order. At the time of passing the assessment order the report of DVO was not received. On receipt of report of DVO, the assessing officer passed rectification order under section 154 transaction. The assessing officer while passing the rectification order accepted the value of asset as on the date of sale as suggested by DVO and computed the capital gain as per ....
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....se. Further, the assessing officer has not made requisite inquires, which should have been made with regard to the adoption of cost of acquisition of asset as on 01.04.1981. the ld CIT-DR for revenue prayed to uphold the order of ld PCIT. 12. We have considered the rival submissions of the parties and have gone through the order of the lower authorities. We have perused the assessment order and the order passed by ld PCIT. We have also deliberated on the documentary evidences and also on the various case laws relied by the Ld. AR for the assessee. We find that the case of the assessee for the year under consideration was reopened on the basis of information received by assessing officer from sub-registrar concerned that the assessee has sold her land during the relevant financial year. The transaction of such land was registered on 31.03.2012. No return of income was filed by the assessee, thus, the assessing officer has reason to believe that income of the assessee escaped assessment. We find that during the assessment proceedings, the assessing officer directed the assessee to furnish copy of return of income, computation of income, and sale deed of the land. The assessee furnis....
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.... there is no such assertion recorded by assessing officer either in the assessment order or in rectification order passed on receipt of the report of DVO. However, there is no dispute that assessing officer examined the facts of the case very extensively and passed assessment order. We further find that the assessment order coupled with rectification order passed by assessing officer is in consonance with decision of Jurisdiction High Court in CIT Vs Gaurangiben S Shodhan (supra) and Bombay High Court in CIT Vs Pooja Prints (supra). 15. Further, Hon'ble Bombay High Court in CIT Vs Gabriel India Ltd (233 ITR 108 Bom /71 Taxman 585) held that the power of suomotu revision under sub-section (1) of section 263 is in the nature of supervisory jurisdiction and the same can be exercised only if the circumstances specified therein exist. Two circumstances must exist to enable the Commissioner to exercise power of revision under this sub-section, viz., (i) the order is erroneous; and (ii) by virtue of the order being erroneous prejudice has been caused to the interests of the revenue. It has, therefore, to be considered firstly as to when an order can be said to be erroneous. One finds tha....
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....ssioner with the power of suomotu 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 material on record to show that tax which was lawfully exigible has not been imposed or that by the application of the relevant statute on an incorrect or incomplete interpretation a lesser tax than what was just has been imposed. Therefore, in order to exercise power under section 263(1) there must be material before the Commissioner to consider that the order passed by the ITO was erroneous insofar as it is prejudicial to the interests of the revenue and that it must be an order which is not in accordance with the law or which has been passed by the ITO without making any enquiry in undue haste. An order can be said to be prejudicial to the interests of the revenue if it is not in accordance with the law in consequence whereof the lawful revenue due to the Sta....
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.... 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 which an assessee feels aggrieved with. 17. The Supreme Court in case of Malabar Industrial Co. Ltd. v. CIT [2000] 243 ITR 832 (SC), held that the prerequisite for the exercise of jurisdiction by the Commissioner suo-motu is that the order of the Income-tax Officer is erroneous in so far as it is prejudicial to the interests of the revenue. The Commissioner has to be satisfied of twin conditions, namely, (i) the order of the Assessing Officer sought to be revised is erroneous; and (ii) it is prejudicial to the interests of the revenue. If one of them is absent - if the order of the Income-tax Officer is erroneous but is not prejudicial to the revenue or if it is not erroneous but is prejudicial to the revenue - recourse cannot be had to section 263(1) of the Act. It can be exercised only when an order....