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2022 (9) TMI 1187 - AT - Income TaxRevision u/s 263 by CIT - application under Vivad Se Vishwas 2020 made - addition in respect of deemed rent U/s 22 r.w.s. 23 of the Act has filed an appeal with the CIT(A) and during pendency of the appeal - HELD THAT - We find the assessment order under Section 143(3) of the Act was passed on 24.11.2019. On appeal, the CIT(A) considering the facts of VSVS 2020 by the assessee has passed the order U/sec 250 of the Act on 26-05-2021. Whereas, the Pr.CIT on the same facts, were the A.O. has applied the mind and made an addition and passed order, now the Pr.CIT has issued notice u/sec 263 of the Act on 03-03-2022 and passed revision order on 15-03-2022. We are of the opinion that the Pr.CIT has invoked provisions of section 263 of the Act after conclusion of proceedings were the assessee has opted VSVS 2020 and received Form.no.5 after payment of full/final disputed taxes on 1.05.2021. Hence the revision order passed U/sec 263 of the Act is abated. See GOPALAKRISHNAN RAJKUMAR, GOPALAKRISHNAN RAVIM 2022 (5) TMI 1388 - MADRAS HIGH COURT - Appeal of assessee allowed.
Issues:
1. Validity of order passed under Section 263 of the Income Tax Act, 1961. 2. Proper appreciation of facts by the Commissioner in passing the order under Section 263. 3. Verification of deemed rent on finished stock by the Assessing Officer. 4. Compliance with provisions of Section 263 by the Principal Commissioner. 5. Effect of settlement of dispute under the Direct Tax Vivad Se Vishwas Act, 2020 on revision proceedings. Issue 1: Validity of order under Section 263: The Appellate Tribunal ITAT Mumbai heard an appeal against the order of the Principal Commissioner of Income Tax passed under Section 263 of the Income Tax Act, 1961. The appellant raised grounds challenging the validity of the order, alleging it was invalid and bad in law. The Tribunal analyzed the facts and circumstances of the case to determine the legality of the order. Issue 2: Appreciation of facts by the Commissioner: The Tribunal examined whether the Commissioner erred in passing the order under Section 263 without fully appreciating the facts of the case. It was observed that the Commissioner found the assessment order to be erroneous and prejudicial to the interest of revenue due to the alleged failure of the Assessing Officer to verify the calculation of deemed rent on the finished stock. The Tribunal assessed whether the Commissioner's decision was justified based on the available information. Issue 3: Verification of deemed rent by the Assessing Officer: The Tribunal reviewed the Assessing Officer's actions regarding the computation of deemed rent on the finished stock. It was noted that the AO had made additions to the income from house property based on his assessment of the situation. The Tribunal analyzed whether the AO's decision was appropriate and whether further verification was necessary as directed by the Commissioner under Section 263. Issue 4: Compliance with Section 263 by the Principal Commissioner: The Tribunal examined whether the Principal Commissioner complied with the provisions of Section 263 in setting aside the assessment order and directing the AO to frame a de novo assessment. The Tribunal assessed whether the Commissioner's actions were in line with the requirements of the law and whether the directions given to the AO were justified. Issue 5: Effect of settlement under Vivad Se Vishwas Act on revision proceedings: The Tribunal considered the impact of the settlement of the dispute under the Direct Tax Vivad Se Vishwas Act, 2020 on the revision proceedings initiated under Section 263. It was observed that once an assessee settles the case under the Act, proceedings initiated against them under Section 263 abate. The Tribunal analyzed the legal implications of the settlement on the revision order passed by the Commissioner. In conclusion, the Tribunal quashed the order of the Principal Commissioner as abated and allowed the grounds of appeal in favor of the assessee, considering the settlement under the Vivad Se Vishwas Act. The appeal filed by the assessee was allowed by the Tribunal.
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