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2020 (9) TMI 149 - AT - Income TaxRevision u/s 263 - Pr.CIT cannot exercise his jurisdictional power u/s.263 if the assessee s appeal is pending before the CIT(A) - HELD THAT - As relying on ACC LIMITED, CEMENT 2020 (7) TMI 369 - ITAT MUMBAI Pr.CIT cannot exercise his jurisdiction if the issue was a subject matter of an appeal before the CIT(A), hence, the ld. Pr.CIT is not justified in directing the AO to modify the assessment order and accordingly, we quash the order passed by the Pr.CIT u/s.263 of the Act. Thus, the ground raised by the assessee is allowed.
Issues Involved:
1. Validity of the order under Section 263. 2. Limitation period for passing the order under Section 263. 3. Valuation of equity shares and the addition made under Section 56(2)(viib). 4. Jurisdiction of the Principal Commissioner of Income Tax (Pr. CIT) to revise the valuation of shares. 5. Revision based on change of opinion or possibility of a second view. 6. Non-acceptance of written submission by the appellant. 7. Specific error in the valuation of shares. Issue-Wise Detailed Analysis: 1. Validity of the Order under Section 263: The assessee contended that the order under Section 263 was bad in law and in facts. The Pr.CIT revised the valuation of equity shares and directed the AO to make further additions. The Tribunal found that the Pr.CIT exercised jurisdictional power u/s.263 without proper justification, as the issue of share valuation was already under appeal before the CIT(A). 2. Limitation Period for Passing the Order under Section 263: The assessee argued that the order dated 30.03.2019 was served on 30.04.2019, beyond the limitation period which expired on 31.03.2019. The Tribunal referred to various judicial pronouncements and concluded that the order must be communicated within the limitation period to be effective. Hence, the order was deemed ante-dated and barred by limitation. 3. Valuation of Equity Shares and Addition under Section 56(2)(viib): The AO had added ?27,51,100 to the income based on the differential value of shares. The Pr.CIT revised this valuation and directed an additional sum of ?1,39,810 to be added. The Tribunal noted that the AO had already determined the value per share at ?739, while the Pr.CIT recalculated it at ?708, resulting in a further addition. However, this was challenged as the matter was already under appeal. 4. Jurisdiction of Pr. CIT to Revise the Valuation of Shares: The Tribunal observed that the Pr.CIT had no jurisdiction to revise the valuation of shares when the issue was already under appeal before the CIT(A). Citing Explanation (c) to Section 263(1) and relevant case laws, it was concluded that the Pr.CIT's action deprived the appellate authority of its power to examine the correctness of the assessment order. 5. Revision Based on Change of Opinion or Possibility of a Second View: The assessee argued that the revision was based on a mere change of opinion and was not sustainable in law. The Tribunal agreed, noting that the AO had followed the prescribed method for valuation, and the Pr.CIT's revision was merely an alternative view without finding any specific error by the AO. The Tribunal cited Supreme Court judgments supporting this view. 6. Non-Acceptance of Written Submission by the Appellant: The Tribunal did not specifically address this issue in detail as it was rendered academic by the quashing of the Pr.CIT's order on other grounds. 7. Specific Error in the Valuation of Shares: The Tribunal found no specific error in the AO's valuation method. The AO had considered the share application money pending allotment as a liability, which the Pr.CIT revised without substantial justification. The Tribunal concluded that the revision was unjustified and quashed the Pr.CIT's order. Conclusion: The Tribunal allowed the appeal of the assessee, quashing the order passed by the Pr.CIT under Section 263. The Tribunal held that the Pr.CIT could not exercise jurisdiction on matters already under appeal before the CIT(A) and that the order was barred by limitation. Other grounds raised were deemed academic and not adjudicated further.
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