TaxTMI 
TaxTMI 
2026 (6) TMI 337
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....y the Hon'ble Supreme Court in Suo Motu Writ Petition (Civil) no.3 of 2020 read with Miscellaneous Application No.665 of 2021 in Miscellaneous Application No.21 of 2022 dated 10.01.2022, passed in view of the Covid-19 pandemic. Inviting our attention to para no.5(I) of the said order, the Ld. AR submitted that where the period of limitation fell within the period from 15.03.2020 to 28.02.2022, the same stood extended till 28.02.2022. Further, by referring to para no.5 (III) of the said order, the Ld. AR submitted that the Hon'ble Supreme Court had further directed that in cases where the limitation expired during the aforesaid period, all persons shall have a limitation period of 90 days from 01.03.2022. Accordingly, it was submitted that since the limitation period of filing the appeal before the Tribunal against the order passed by the Ld. PCIT under section 263 of the Act dated 11.03.2021 falls within the aforesaid period, the limitation for filing the appeal before this Tribunal stood extended till 30.05.2022. As the assessee has filed the appeal before this Tribunal on 30.05.2022, therefore the delay deserves to be condoned. 3. Per contra, the Ld. DR did not raise any serio....
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....sent appeal and admit the appeal for adjudication on merits. 6. The assessee has raised the following grounds of appeal: "1. The Learned Principal Commissioner of Income Tax-Central/Tirupati erred on facts of the case and the law involved in so far as it is prejudicial to the interest of the Appellant. 2. The Learned Principal Commissioner of Income Tax-Central/Tirupati has erred in passing orders under section 263 directing the A.O to invoke provisions of Section 45 without considering submissions made by the assessee. 3. On the facts and in the circumstances of the case, the Learned Principal Commissioner of Income Tax-Central/Tirupati erred in assuming jurisdiction under section 263 of the Act in order to impost his own views on the Ld. A.O when the A.O had taken a possible view. 4. The impugned order passed by the A.O originally being neither erroneous nor prejudicial to the interest of the revenue, the Ld. Pr. CIT wrongly invoked jurisdiction by making allegation which is not supported by any contra evidence or by law. 5. The Ld. Pr. CIT erred on facts as also in law in having exercised revisionary power under section 263 on the ....
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....no capital gains arose in the hands of the assessee. The assessee further submitted before the Ld. PCIT that no consideration was actually received and the property continued to remain in his possession. However, the Ld. PCIT, after considering the submissions of the assessee and material available on record, observed that as per the registered sale deed dated 17.02.2011, consideration of Rs. 1,09,39,000/- was stated to have been received and possession was also handed over on the date of registration itself. The Ld. PCIT further observed that the statement recorded from the purchaser under section 131 of the Act revealed that the cancellation deed was executed only to overcome capital gains liability and avoid appellate proceedings. The Ld. PCIT also noted that the Ld. AO had failed to conduct independent enquiry from revenue authorities and failed to verify banking transactions relating to receipt of sale consideration. The Ld. PCIT further relied upon the decision of the Hon'ble Kerala High Court in the case of CIT Vs. Harbour View (ITA No.33 of 2010, dated 24.09.2018) and observed that subsequent rescission of contract would not absolve tax liability arising under section 45 of....
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.... the order of the court placed at page nos.38 and 39 of the paper book, the Ld. AR submitted that the assessee succeeded in the said suit and the Hon'ble Court vide ex party order dated 30.12.2010 set aside the sale deed dated 05.11.2007 executed in favour of Shri M.V. Lokeshwar Reddy and accordingly restored the property in favour of the assessee. The Ld. AR submitted that thereafter the assessee executed second sale deed in favour of Shri S. Nisar Ahmed duly informing him about the pending litigation and Shri S. Nisar Ahmed promised to pay the sale consideration amount after resolution of litigation. However, in the sale deed executed in favour of Shri S. Nisar Ahmed, it was recorded that sale consideration was paid to the assessee. The Ld. AR submitted that subsequently Shri M.V. Lokeshwar Reddy filed petition before the court seeking setting aside of the order dated 30.12.2010 and the dispute is still pending before the Hon'ble Court. The Ld. AR further submitted that the assessee had not received any consideration against the subsequent sale deed executed in favour of Shri S. Nisar Ahmed. Relying upon the decision of the Hon'ble Patna High Court in the case of Smt. Raj Rani De....
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....l submissions and perused the material available on record including the case laws relied upon. We have also gone through the order passed by the Ld. PCIT under section 263 of the Act and the assessment order passed by the Ld. AO under section 143(3) of the Act. On perusal of the assessment records as discussed in the order passed by the Ld. PCIT, we find that the assessee had executed registered sale deed No.1472/2011 dated 17.02.2011 in respect of immovable property for consideration of Rs. 1,09,39,000/-. The registered document itself specifically records that the sale consideration was received and possession of the property was handed over to the purchaser on the date of execution of sale deed itself. We further find that during the assessment proceedings, the assessee furnished cancellation deed dated 17.12.2018 and on the basis of the same, the Ld. AO accepted the claim of the assessee that no capital gains were chargeable to tax. In this regard, we have gone through para no. 6 of the order of the Ld. AO which is to the following effect: "6. The following points have been keenly verified and considered for deciding the capital gains issue: i. The said land ....
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....roperty was handed over on the date of registration itself. Further during the course of assessment proceedings, the A.O. examined Mr. Nissar Ahmed, the buyer u/s.131 of the Act, on 19.12.2018. In response to question No.7, it was deposed by Mr. Nissar Ahmed that the reasons for cancellation of the sale deed 1472/2011 is to overcome the capital gains issue in the case of Sri Abdul Mannan and to avoid appeal proceedings before the appellate authority. Further, with the Cancellation deed, a self attested certificate by Nissar Ahmed is enclosed in which it was certified that the scheduled property has not been conveyed or permanently alienated to any other person in any way by him or by his representatives or agent through any other document earlier. From this it is clear that the scheduled property was in the possession of Sri Nissar Ahmed. 6. The A.O. based on statement by Mr. Nissar Ahmed u/s.131 It was concluded that - (i) no consideration has been passed on (ii) the property was in the possession of the assessee But the A.O. did not obtain (i) the relevant Information from Revenue authorities w.r.t. the details of persons who held the land from....
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....in so far as it is prejudicial to the interests of the revenue on a deemed basis within the meaning of section 263 of the Act. Hence, by invoking the revisionary powers u/s 263 of the Act, the said assessment order is hereby set aside with a direction to re-do the assessment de novo in accordance with law after making all necessary inquiries and verification in respect of the issue of chargeability of capital gains and after affording a reasonable opportunity of being heard to the assessee. 14. On perusal of the above, we find that the Ld. PCIT has categorically observed that the Ld. AO failed to verify revenue records, failed to verify bank accounts and failed to conduct independent enquiry regarding actual payment of consideration and possession of the property. We have also gone through para no.7 of the statement of Mr. S. Nisar Ahmed, recorded under section 131 of the Act, which is to the following effect: "7. The sale was executed in the year 2011, whereas, the cancellation deed is executed in the ve2 2018. There is a time gap of nearly eight year. Please explain why so much of long time was taken for cancellation. Ans: Actually, the problem was started in....
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....rther find that despite existence of registered sale deed evidencing transfer of property along with recital regarding receipt of consideration and handing over of possession, the Ld. AO accepted the explanation of the assessee without conducting proper enquiry and verification. The Ld. A.O has summarily accepted the cancellation deed, inspite of the specific mention therein that the cancellation deed was executed to overcome capital gains liability and avoid appellate proceedings. Therefore, in our considered opinion, the assessment order was passed without making enquiries and verifications which ought to have been made in the facts and circumstances of the case. We have also gone through the provisions of Explanation 2(a) to section 263(1) of the Act, which is to the following effect: "263 (1)........ Explanation 1............ Explanation 2.-For the purposes of this section, it is hereby declared that an order passed by the Assessing Officer shall be deemed to be erroneous in so far as it is prejudicial to the interests of the revenue, if, in the opinion of the Principal [Chief Commissioner or Chief Commissioner or Principal] Commissioner or Commission....