2023 (6) TMI 40 - AT - Income Tax

Revision u/s 263 - PCIT noted AO has not made any effective enquiry at all before accepting the long term capital gain and deduction claimed u/s. 54F - HELD THAT - Allegation of the Revisionary Authority remains uncontroverted before us, as the assessee has neither appeared nor filed any submission to demonstrate that the assessment order is neither erroneous nor prejudicial to the interest of revenue in terms of section 263. Assessee s case was selected for limited scrutiny only for the purpose of examining large deductions/exemption claimed under various provisions including section 54F - There is nothing either in the body of assessment order or any other material available on record to suggest that the AO has enquired into the issues, for which, the case was selected for limited scrutiny. NO infirmity in the order passed u/s. 263 - Decided against assessee.

Summary

Issues involved:
The appeal against an order u/s 263 of the Income-tax Act, 1961 pertaining to the assessment year 2017-18.

Details of Judgment:

Issue 1: Negligence of the Assessee
The assessee failed to appear for the appeal hearing despite prior notification, leading to an ex parte decision. The Tribunal proceeded with the appeal ex parte after hearing the Departmental representative due to the gross negligence of the assessee. The appeal was against an order passed u/s. 263 of the Act, emphasizing the need for a timely resolution.

Issue 2: Deficiencies in Assessment Order
The Principal Commissioner of Income-tax (PCIT) identified deficiencies in the assessment order related to the sale of shares and long term capital gains. The PCIT found that the Assessing Officer had not conducted a proper enquiry regarding the earning of long term capital gain and the deduction claimed u/s. 54F of the Act. The PCIT issued a show cause notice to the assessee and ultimately set aside the assessment order for further examination.

Issue 3: Lack of Enquiry by Assessing Officer
The Tribunal noted that the Assessing Officer did not make an effective enquiry into the long term capital gain and deduction claimed u/s. 54F of the Act before accepting them. The assessment order was selected for limited scrutiny, focusing on deductions/exemptions under various provisions, including section 54F. However, there was no evidence to show that the Assessing Officer had investigated the specific issues identified for scrutiny.

Conclusion:
The Tribunal upheld the order passed u/s. 263 of the Act, dismissing the grounds raised by the assessee. The appeal was ultimately dismissed due to the lack of appearance and submissions from the assessee, reinforcing the importance of active participation in legal proceedings.

Separate Judgement:
No separate judgment was delivered by the judges in this case.