2022 (4) TMI 801 - AT - Income Tax

Revision u/s 263 - As per CIT AO has not examined the sale consideration as per section 56(2) - case was reopened u/s. 147 - assessee had purchased an immovable property along with six other members, however, the assessee did not disclose the same in his return of income - HELD THAT - As notice under section 148 of the Act and after considering the submissions of the assessee, the Assessing Officer has completed the assessment under section 143(3) r.w.s. 147 of the Act dated 14.12.2017 by accepting the income returned after examining the purchase deed and source of purchase of immovable property. Subsequently, the ld. PCIT issued show-cause notice under section 263 of the Act on the ground that the assessment order is erroneous and prejudicial to the interest of Revenue since the assessee has not offered the revised stamp duty value of the immovable property purchased as income from other sources as per section 56(2) - ongoing through the relevant provisions, we find that the relevant assessment year under consideration is 2013-14 and the provisions of section 56(2)(vii)(b) was introduced in the Finance Act, 2013 w.e.f. assessment year 2014-15. Therefore, we are of the opinion that the provisions of section 56(2)(vii)(b) of the Act has no application to the assessment year 2013-14 under consideration and accordingly, the revision order passed under section 263 of the Act is quashed. For AY 2014-15 assessee has not offered the revised stamp duty value of the immovable property purchased as income from other sources as per section 56(2) - Against the show cause notice issued, the assessee has neither appeared nor furnished any written submission and accordingly, while setting aside the assessment order, the ld. PCIT directed the Assessing Officer to redo the assessment. Since the provisions of section 56(2)(vii)(b) of the Act applies with effect from the assessment year 2014-15 and the assessment year under consideration is also 2014-15, we are of the opinion that the ld. PCIT has rightly invoked the provisions of section 263 of the Act and directed the Assessing Officer to redo the assessment. Thus, we find no infirmity in the order passed by the ld. PCIT under section 263 of the Act. Thus, the ground raised by the assessee is dismissed.

Summary

Issues:
1. Delay in filing appeals due to COVID-19 pandemic.
2. Reopening of assessment under section 147 of the Income Tax Act.
3. Application of section 263 of the Income Tax Act.
4. Interpretation of section 56(2)(vii)(b) of the Act for different assessment years.

Analysis:
1. The appeals filed by the assessee were delayed by 60 days due to the COVID-19 pandemic. The delay was condoned, and the appeals were admitted for adjudication.

2. The Assessing Officer reopened the assessment under section 147 of the Act based on the non-disclosure of the purchase of immovable property by the assessee. After issuing notices and completing the assessment under section 143(3) r.w.s. 147, the Principal Commissioner of Income Tax (PCIT) issued a show-cause notice under section 263 of the Act, citing the failure to consider the revised stamp duty value of the property as per section 56(2) of the Act.

3. The PCIT set aside the assessment order for the assessment year 2013-14, directing the Assessing Officer to redo the assessment, as the original order was deemed erroneous and prejudicial to the interest of Revenue. The assessee challenged this decision, arguing that the provisions of section 56(2)(vii)(b) were not applicable to the assessment year 2013-14. The Tribunal agreed with the assessee, quashing the revision order under section 263 of the Act for that assessment year.

4. For the assessment year 2014-15, the PCIT invoked section 263 of the Act, directing the reassessment due to the failure to consider the revised stamp duty value of the property. The Tribunal upheld this decision, noting that the provisions of section 56(2)(vii)(b) were applicable to the assessment year 2014-15. Therefore, the PCIT's order for reassessment for the assessment year 2014-15 was deemed appropriate, and the appeal for that year was dismissed.

In conclusion, the Tribunal allowed the appeal for the assessment year 2013-14 and dismissed the appeal for the assessment year 2014-15, based on the different application of section 56(2)(vii)(b) of the Income Tax Act for the respective assessment years.