2014 (9) TMI 824 - HC - Income Tax

Remand order for examination of deduction u/s 54F Held that - The AO while passing the order u/s 154 did not appreciate and notice the correct facts - Earlier also, the AO while passing order u/s 143(3) did not notice the revised return by which the total income was enhanced the revision, as has been observed by the CIT(A) was on account of the fact that the assessee had reduced the claim for deduction u/s 54F from ₹ 1,02,39,517/- to ₹ 76,83,538 CIT(A) has rightly observed that the issue with regard to claim for deduction u/s 54F was not examined in the order u/s 154 of the Act decided against revenue.

Summary

Issues:
- Contention regarding the order of remand for examination of deduction under Section 54F of the Income Tax Act, 1961 by the Commissioner of Income Tax (Appeals).

Analysis:
The High Court addressed the contention raised by the appellant-Revenue regarding the order of remand for examination of the deduction under Section 54F of the Income Tax Act, 1961. The appellant argued that the Commissioner of Income Tax (Appeals) should have quashed the order under Section 154 if the Assessing Officer had erred. However, the Court found this contention lacking merit. The Commissioner of Income Tax (Appeals) had granted the Assessing Officer an opportunity to examine the claim under Section 54F, which was a more liberal approach. It was noted that the Assessing Officer had not appreciated the correct facts in the previous orders under Section 154 and 143(3), failing to notice the revised return where the claim for deduction under Section 54F was reduced. The Court agreed with the Commissioner of Income Tax (Appeals) that the issue of deduction under Section 54F was not adequately examined in the order under Section 154, which only focused on Section 54EC.

The High Court emphasized that the Assessing Officer had overlooked crucial details related to the deduction under Section 54F in previous orders. The Commissioner of Income Tax (Appeals) correctly pointed out the Assessing Officer's oversight in not examining the claim for deduction under Section 54F in the order under Section 154. The Court highlighted that the revision in the total income was due to the reduction in the claim for deduction under Section 54F, which the Assessing Officer had failed to consider. The order under Section 154 did not address the claim for deduction under Section 54F, focusing solely on Section 54EC. Consequently, the Court found no merit in the appeal made by the appellant-Revenue and dismissed the same.