TaxTMI 
TaxTMI 
2023 (6) TMI 1402
X X X X Extracts X X X X
X X X X Extracts X X X X
....t & circumstances of the case, Ld. Pr. CIT has erred in law and on facts in assuming jurisdiction u/s 263 and has further erred in observing that the assessment order passed u/s 143(3)/148 on 15/03/2016 is erroneous in so far as it is prejudicial to the interest of revenue and that too by recording incorrect facts and findings and without observing the principles of natural justice. 2. That having regard to facts and circumstances of the case, Ld. Pr. CIT has erred in law and on facts in holding as under:- * That the assessee has not complied with the conditions enumerated for claiming deduction u/s 54B of the I.T. Act. * That the issue of said deduction has not been examined while completing the re-assessment u/s 143(3)147 dated 1....
X X X X Extracts X X X X
X X X X Extracts X X X X
....uction has not been examined while completing the re-assessment u/s 143(3)/147 dated 21/03/2016. * That the re-assessment order is hereby set aside with the direction to AO to re-examine the issue of claim of deduction u/s 54B afresh. * That the assessee came forward with fabricated documents to claim deduction u/s 54B which is not admissible. 3. That having regard to the facts and circumstances of the case, order u/s 263 is bad in law for the reason that the proceedings u/s 147 initiated itself was bad in law as the order u/s 143(3)/147 dated 18/03/2016 was not maintainable and in invalid re-assessment cannot be set aside u/s 263 of the Act. 4. That the appellant craves the leave to add, amend, modify, delete any of the grounds....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ital gain. In response to such notice, the assessee filed his return of income on 09/05/2014 showing the capital gains on sale of agricultural land to be at Rs. 35,08,250/- and consequently claimed deduction u/s 54B of the Act in view of the fact that the assessee had purchased another agricultural land for Rs. 80 lacs. The nil capital gain reported by the assessee was accepted by the Ld. A.O. in the re-assessment and concluded u/s 143(3) r.w.s. 147 of the Act on 15/03/2016. This assessment was sought to be revised by the Ld. PCIT by invoking revision jurisdiction u/s 263 of the Act on the ground that the Ld. A.O. had not examined the claim of deduction u/s 54B of the Act made by the Ld. AO, thereby making reassessment order erron....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ther, the Ld. A.O. again vide notice u/s 142(1) of the Act dated 14/03/2016 sought to re-examine the claim of deduction u/s 54B of the Act, which was also duly replied by the assessee before the Ld. A.O. After being satisfied with the various replies given by the assessee, the Ld. A.O. proceeded to accept the claim of the assessee with regard to computation of capital gain and claim of deduction u/s 54B of the Act. Hence, it could be safely concluded that the Ld. A.O. had indeed made sufficient enquiries with regard to the capital gains and claim of deduction u/s 54B of the Act. Hence, in our considered opinion, the action of the Ld. PCIT invoking the revision jurisdiction u/s 263 of the Act on the ground that no enquiries made by the Ld. A....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed in section 263 of the Act clearly indicate that the revisionary authority has to independently apply his mind to the materials on record before coming to a conclusion that the order sought to be revised is erroneous and prejudicial to the interests of revenue. The decision making process under section 263(1) of the Act has to be that of the revisionary authority and cannot be at the behest of some other subordinate authority. In the facts of the present appeal, it is abundantly clear that the exercise of powers under section 263 of the Act is not due to any independent application of mind by the revisionary authority, but at the behest of the Income-tax Officer. Had the ITO not sent any proposal for initiating proceedings under section 2....