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2023 (10) TMI 1230 - AT - Income TaxRevision u/s 263 - PCIT observed that the assessee in the instant case has not fulfilled the conditions prescribed u/s 54F - HELD THAT - We do not find any force in the argument of assessee. It is seen from the letter addressed by the assessee to the AO in response to the notice u/s 143(2) that the assessee has categorically stated that she has sold all the flats. When the assessee has not held the flats for a minimum period of 3 years, the provisions of section 54F are not fulfilled and therefore, by allowing the claim of deduction u/s 54F, the order of the Assessing Officer has become erroneous as well as prejudicial to the interest of the Revenue. Order of the Assessing Officer is also very cryptic and the reasons for which the case was selected for scrutiny have not been addressed at all. The order passed by the AO u/s 143(3) in our opinion, has become erroneous as well as prejudicial to the interest of the Revenue. We therefore, do not find any infirmity in the order of the learned PCIT invoking the jurisdiction u/s 263 - Decided against assessee.
Issues Involved:
1. Whether the Assessing Officer's acceptance of the assessee's claim for deduction under Section 54F of the I.T. Act was erroneous and prejudicial to the interest of the Revenue. 2. Whether the Principal Commissioner of Income-Tax (PCIT) was justified in invoking Section 263 of the I.T. Act to set aside the Assessing Officer's order. Summary: Issue 1: Assessing Officer's Acceptance of Deduction under Section 54F The assessee, deriving income from various sources including house property and capital gains, filed returns for A.Y. 2015-16. The Assessing Officer completed the assessment under Section 143(3) accepting the returned income. The PCIT noted that the assessee sold flats without holding them for the minimum period of three years, which should have resulted in short-term capital gains taxable at 30%. The PCIT issued a notice under Section 263, stating the order was erroneous and prejudicial to the Revenue's interest. The assessee argued that the claim under Section 54F was valid based on various high court decisions, but the PCIT was not satisfied, asserting non-compliance with Section 54F conditions. Issue 2: Justification of PCIT in Invoking Section 263 The Tribunal upheld the PCIT's decision, stating that the Assessing Officer's order was indeed erroneous and prejudicial to the Revenue's interest. The Tribunal found that the assessee sold the flats within three years, disqualifying the claim under Section 54F. The Tribunal noted that the Assessing Officer's order lacked detailed examination and was cryptic, thus justifying the PCIT's invocation of Section 263 to set aside the order and direct a re-assessment. Additional Appeals: Similar issues were raised in appeals by other assessees (Shri Rajesh Kumar Jain, Shri Ratanlal Jain, and Smt. Chandra Devi Jain), where the PCIT had also invoked Section 263 for similar reasons. The Tribunal dismissed all these appeals, reiterating that the Assessing Officer's orders were erroneous and prejudicial to the Revenue's interest, and upheld the PCIT's directions for re-assessment. Conclusion: The Tribunal dismissed all four appeals, affirming the PCIT's orders to set aside the Assessing Officer's assessments and directing re-assessment after proper examination. The orders were pronounced in the Open Court on 11th October 2023.
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