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2023 (7) TMI 790 - AT - Income TaxRevision u/s 263 - computation of long term capital gain - determination of fair market value - HELD THAT - As in case the AO has adopted one of the courses permissible in law would not render the order of the AO erroneous. Similarly after the AO has taken a possible view then the order of the AO would not be regarding as erroneous merely because the commissioner does not agree with the view of the AO. Therefore, in case in hand when the AO has adopted one of the possible method of determination of fair market value which is more than the value as determined by the registered valuer then a different value determined by the DVO in the report which is received after the completion of the assessment would not render the order of the AO being erroneous and prejudicial to the interest of the Revenue. Determination of the fair market value as on 01.04.1981 - Assessee has raised specific issues before ld. CIT(A) regarding the validity of reference made by the AO to DVO for want of any enabling provisions u/s 55A prior to amendment as well as determination of fair market value as on 01.04.1981 by the AO. It is evident from the record that the issue of determination of fair market value as on 01.04.1981 was very much subject matter of the appeal before the Ld. CIT(A) and therefore, powers of the Pr. CIT u/s 263(1) as per clause(c) of explanation (1) are extended only to such matter which has not been considered and decided in the appeal. In other words the matter which is subject matter of the appeal before the appellate authority is beyond the powers of the Pr. CIT while invoking the provision of section 263 of the Act. Therefore, when the issue of determination of fair market value of the land in question as on 01.04.1981 was subject matter of the appeal before the Ld. CIT(A) then the Pr. CIT would have no jurisdiction to revise the order of the AO on the same issue. Appeal of assessee allowed.
Issues Involved:
1. Condonation of Delay in Filing the Appeal 2. Validity of the Revision Order under Section 263 3. Jurisdiction of Pr. CIT to Invoke Section 263 Summary: Condonation of Delay in Filing the Appeal: The assessee filed an appeal with a delay of 199 days, claiming that the impugned order and show cause notices were sent only to the e-mail ID, which the assessee, being a farmer and not tech-savvy, did not use. The delay was argued to be covered by the Supreme Court's judgment in the case of Suo-moto Cognizance of extending the Limitation reported in 441 ITR 722 (SC). The Tribunal, considering the reasons provided and the relevant Supreme Court judgments, condoned the delay, stating that the delay was neither intentional nor deliberate. Validity of the Revision Order under Section 263: The Pr. CIT issued a revision order under Section 263, challenging the fair market value of the land as on 01.04.1981 determined by the AO. The AO had conducted a detailed inquiry and adopted the reverse indexation method, a permissible method, to determine the fair market value. The Tribunal held that the AO had taken a possible view, and the Pr. CIT cannot invoke Section 263 merely because he disagrees with the AO's view. The Tribunal referenced the Supreme Court's judgment in Malabar Industries Co. vs. CIT 243 ITR 83, which states that if the AO adopts one of the courses permissible in law, the order cannot be treated as erroneous and prejudicial to the interests of the revenue. Jurisdiction of Pr. CIT to Invoke Section 263: The assessee argued that the issue of fair market value as on 01.04.1981 was already a subject matter of appeal before the CIT(A). The Tribunal agreed, referencing the Bombay High Court's judgment in CIT(Exemption) vs. Slum Rehabilitation Authority 412 ITR 521, which states that when an issue is pending in appeal, the Pr. CIT cannot invoke Section 263 on the same issue. Therefore, the Tribunal concluded that the Pr. CIT had no jurisdiction to revise the order of the AO on this issue. Conclusion: The Tribunal set aside the order passed by the Pr. CIT under Section 263, stating it was not sustainable in law, and allowed the appeal of the assessee.
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