2026 (1) TMI 600

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....g the assessment framed by the AO u/s.143(3) r.w.s.144B of the Act dated 23.09.2022. 3. Facts in brief are that the assessee filed its return of income on 30.12.2020 declaring total income at Rs. 23,35,26,000/-. The case of the assessee was selected for scrutiny and the assessment was framed accordingly u/s.143(3)/144B of the Act accepting the returned income. Thereafter the JAO/DCIT, Circle-5(1) Kolkata brought to notice of the ld. Pr.CIT certain issues/matters which were the subject matter of the proposed proceedings u/s.263 of the Act for A.Y.2020-2021. Accordingly, ld. Pr.CIT issued notice u/s.263 of the Act giving show cause as to why the assessment should not be revised on the ground of being erroneous and prejudicial to the intere....

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....A of the Act. Thus, the ld. AR prayed the order passed by the ld. Pr.CIT may kindly be quashed. 6. Ld. CIT-DR, on the other hand relied heavily in the order of ld PCIT and submitted that no prejudice is caused to the assessee by such invoking of juridiction u/s 263 of the Act as the assessee would be given sufficient opportunity during the set aside proceedings. 7. After hearing the rival contentions of the parties and perusing the material available on record, we find that in this case a piece of land was sold at Nagpur for Rs. 70.08 crore as against stamp duty valuation of Rs. 68.72 crore. The fair market value of the land was determined at Rs. 21.16 crore by the Registered Valuer of the assessee. After considering indexation on fai....

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....tion of the proceedings under Section 263 of the Act was based on a proposal given by the assessing officer and not at the behest of the PCIT. It may be true that the PCIT may have information from the assessment file or through other sources. Nevertheless while exercising powers under Section 263 of the Act the PCIT has to bear in mind the twin conditions are to be conjointly fulfilled. Therefore, before exercise of power under Section 263 it is the PCIT who has to apply its mind to the issue and thereafter record reasons as to how the twin conditions are satisfied and then issue a show-cause notice to the assessee. In the cases on hand there is nothing on record to show that such an exercise was done by the PCIT. Therefore, learned Tribun....

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....diction under section 263 of the Act exercised jurisdiction at the instance of the assessing officer which is against the provisions of the law. This decision supports the case of the respondent assessee. Hence, for the above reasons, we are of the view that the order passed by the learned tribunal on the first ground, namely with regard to the correctness of the exercise of power under section 263 of the Act has to be affirmed and, accordingly, the appeal filed by the revenue is dismissed and the substantial questions of law suggested by the revenue are not required to be decided in the instant case. For the reasons set out by us above and, accordingly, the same are left open. 8. Similar ratio has been laid down by the coordina....