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2024 (4) TMI 878 - AT - Income TaxRevision u/s 263 - taxability of interest received by the Assessee on the enhanced compensation u/s 28 of the Land Acquisition Act - scope of debatable issue - AO while passing the order u/s 154 of the Act by accepting one of the views, deleted the addition - HELD THAT - As the taxability of interest received by the Assessee on the enhanced compensation u/s 28 of the Land Acquisition Act is a debatable issue, wherein two views are plausible. The A.O. while passing the order u/s 154 of the Act by accepting one of the views, deleted the addition. It is well settled law that when two views are plausible and the issue is also a debatable one, the PCIT cannot assume jurisdiction as held by the Jurisdictional High Court in the case of CIT Vs. Hindustan Coca Cola Beverages Pvt. Ltd. 2011 (1) TMI 138 - DELHI HIGH COURT in view of the above discussion, we find no error in the order made under Section 154 of the Act by rectifying the mistake apparent from the record and the Ld. PCIT committed error in quashing the said order by invoking the provision of Section 263 of the Act. Accordingly we quash the impugned order of the Ld. PCIT by allowing the Grounds of appeal of the Assessee.
Issues Involved:
1. Jurisdictional Validity of Order u/s 263 2. Basis of Proposal for Proceedings u/s 263 3. Validity of Unsigned Show Cause Notice 4. Applicability of Action u/s 263 on Orders Passed u/s 154 5. Examination of Facts by Assessing Officer 6. Lack of Enquiry or Investigation Summary: 1. Jurisdictional Validity of Order u/s 263: The Assessee challenged the order dated 28.03.2023 passed by the Ld. PCIT u/s 263 of the Income Tax Act, 1961, arguing it was made "without satisfying the statutory preconditions" and thus "without jurisdiction." 2. Basis of Proposal for Proceedings u/s 263: The Assessee contended that the initiation of proceedings u/s 263 based on the proposal of the Assessing Officer was "void-ab-initio," making the consequent order u/s 263 also without jurisdiction. 3. Validity of Unsigned Show Cause Notice: The Assessee argued that the initiation of proceedings u/s 263 based on an unsigned show cause notice by the Ld. PCIT was "void-ab-initio," thus making the order u/s 263 without jurisdiction. 4. Applicability of Action u/s 263 on Orders Passed u/s 154: The Assessee claimed that action u/s 263 is not permissible on intimation/orders passed by the Assistant Director of Income Tax, CPC u/s 154 of the Act. 5. Examination of Facts by Assessing Officer: The Assessee argued that once the Assessing Officer had examined the facts and accepted the claim, the order could not be regarded as erroneous merely because the Ld. PCIT had a different opinion. 6. Lack of Enquiry or Investigation: The Assessee contended that the action u/s 263 was not applicable as it was not a case of "lack of enquiry" or "lack of investigation." Judgment: The Tribunal noted that the CPC had initially processed the return u/s 143(1) and made an addition of Rs. 1,93,65,172/- on account of interest received on enhanced compensation from HUDA. The Assessee's application u/s 154 seeking deletion of this addition was initially rejected but later accepted, resulting in a refund. The Ld. PCIT initiated proceedings u/s 263, deeming the order passed u/s 154 as erroneous and prejudicial to the interest of the revenue. The Tribunal found that the issue of taxability of interest on enhanced compensation is debatable, with two plausible views. The Tribunal cited precedents, including the case of Ghanshyam HUF and subsequent amendments, to conclude that the Ld. PCIT erred in invoking u/s 263. The Tribunal emphasized that when two views are plausible, the PCIT cannot assume jurisdiction u/s 263. The Tribunal quashed the order of the Ld. PCIT and allowed the Assessee's appeal, concluding that the original order u/s 154 was not erroneous. Conclusion: The appeal filed by the Assessee was allowed, and the order of the Ld. PCIT invoking u/s 263 was quashed. The Tribunal held that the original order u/s 154 by the Assessing Officer was correct and not erroneous.
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