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2022 (4) TMI 740 - AT - Income Tax


Issues:
Reopening of assessment under Section 147 for A.Y. 2010-11 based on erroneous and prejudicial order under Section 263 of the Income Tax Act, 1961.

Detailed Analysis:

1. Reopening of Assessment:
The appeal was filed against the order dated 22.04.2020 by the Principal Commissioner of Income Tax, Vadodara-1, for A.Y. 2010-11 under Section 263 of the Income Tax Act, 1961. The case was reopened under Section 147 due to the sale of an immovable property in F.Y. 2009-10 without filing a return for A.Y. 2010-11. The PCIT found the order under Section 143(3) r.w.s. 147 erroneous and prejudicial to revenue interests due to discrepancies in availing exemption u/s. 54B against capital gain income.

2. Compliance with Section 54B:
The PCIT observed that the assessee failed to comply with Section 54B requirements, which necessitate depositing unutilized capital gain in the Capital Gain Account Scheme within the due date of filing the return of income under Section 139(1). The purchase of properties and utilization of cash for land purchase after 31.07.2010 were found to be in violation of Section 54B provisions.

3. Judicial Precedents and Assessing Officer's Role:
The assessee cited various judgments in support of their case, emphasizing compliance with Section 139 for availing exemptions. However, the PCIT emphasized the necessity of following Section 54B(2) requirements regarding capital gain utilization and deposit. The PCIT also referred to relevant High Court judgments supporting their interpretation.

4. Lack of Evidence and Direction for Fresh Assessment:
The Tribunal noted the absence of evidence regarding the capital gain account scheme during the reopening proceedings and the lack of inquiry by the ITO. As a result, the PCIT's intervention under Section 263 was upheld, directing the AO to conduct proper inquiries and frame a fresh assessment. The Tribunal affirmed the PCIT's order, dismissing the appeal and confirming the impugned decision.

This detailed analysis covers the issues surrounding the reopening of assessment, compliance with Section 54B, judicial precedents, the role of the Assessing Officer, lack of evidence, and the direction for a fresh assessment as per the judgment by the Appellate Tribunal ITAT Ahmedabad.

 

 

 

 

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