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TMI Blog2022 (1) TMI 1190X X X X Extracts X X X X X X X X Extracts X X X X ..... by the said M/s Green City Builders i.e. the purchaser. The said recitals in the sale deed proposed that the assessee had got the sale consideration only by way of book adjustment towards cost of apartment No. 102 and the entire amount of the sale consideration was invested by the assessee in purchase of apartment No. 102 in lieu of sale of the property in question and in this way, the entire amount was invested and no amount was received by the assessee. All those facts were placed on record by the assessee before the A.O. and thus in this way, the A.O. had passed the order of assessment after considering the facts placed on record by the assessee. In view of the above all the details were duly furnished by the assessee during the course of assessment proceedings alongwith the supporting documents and same aspect were also examined by the A.O. in the assessment order and the A.O. has also calculated computation of capital gain in the assessment order itself and the entire consideration were directly invested for purchase of residential apartment, which is evident from the sale deed, therefore there is no question of any irregularity in order passed U/s. 143(3) As assessee has full ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessing officer and said investment was duly reflected in the sale deed dated 06/06/2014 and same was also verified by the assessing officer due to topographical error in the assessment order of the assessing officer the exemption cannot be denied though the same were shown in the sale deed therefore order passed is illegal, invalid and bad in law. 7. The appellant seeks permission to add any other ground of appeal or amend or alter the aforesaid ground of appeal." 2. There is delay of 210 days in filing the present appeal, for which the assessee has filed an application for condonation of delay. The contents of the condonation application reads as under: "In the case of the assessee assessment U/s. 143(3) was completed on 28/11/2017 determining net income at ₹ 7,07,915/- and addition was made at ₹ 5,11,807/-. The assessee due to buy peace and avoid litigation the assessee has accepted addition and paid tax accordingly. In the case of the assessee order U/s. 263(1) has been passed on 03/03/2020 by the Principal Commissioner of Income Tax-2, Nagpur and set-aside the assessment order. The said order was served on 08/07/2020. However due to Covid-19 pandemic and l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 53(5) of the Income Tax Act, 1961 (in short, the Act) the Tribunal may admit an appeal filed beyond the period of limitation where it is satisfied that there exists a sufficient cause on the part of the assessee for not presenting the appeal within the prescribed time. The explanation of the assessee therefore becomes relevant to determine whether the same reflects sufficient and reasonable cause on his part in not presenting the present appeal within the prescribed time. In the instant case, it has been stated by the assessee that due to Covid-19 pandemic and lock down the assessee could not contact any counsel for the matter. The assessee being senior citizen and ailing did not have the resource or help to contact for legal advice and due to which, the appeal could not be filed on time before the Tribunal. 5. In case of Collector, Land Acquisition, Anantnag & Anr. Vs Mst. Katiji and others (1987) 2 SCC 107, the Hon'ble Supreme Court has held that the expression 'Sufficient Cause' employed by the legislature is adequately elastic to enable the Courts to apply the law in a meaningful manner to sub-serves the ends of justice that being the life-purpose of the existence of the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. Pr.CIT invoked provisions of Section 263 of the Act on the ground that on verification of records by the ld. Pr.CIT, the assessee had claimed estimated cost of acquisition without recording purchase of plot by his ancestors nor any valuation report of any authorized valuer was filed. It was also observed by the ld. Pr.CIT that the assessee had claimed cost of improvement of ₹ 52,000/- which was not allowable expenditure as the said amount was penal charges imposed by the Nagpur Improvement Trust for the unauthorized construction done by the assessee on the plot in question. Apart from the above, the assessee claimed deduction U/s 54F of the Act of ₹ 61,00,000/- on account of purchase of a residential flat. According to the ld. Pr.CIT, the A.O. had neither called for the sale deed/agreement to sell in respect to the asset purchased by the assessee, therefore, the ld. Pr.CIT concluded that the facts were not examined by the A.O. during the scrutiny proceedings and therefore, held that the order passed by the A.O. is erroneous and prejudicial to the interests of the revenue. 8. All the grounds raised by the assessee in this appeal are interrelated and interconnected an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt No. 102 in the proposed scheme on the above said plot to be constructed by the vendee i.e. M/s Green City Builders (purchaser) and in this way, the assessee had sold the plot in question vide sale deed dated 06/06/2014 to M/s Green City Builders for ₹ 61.00 lacs. However, instead of getting the said amount in cash, the assessee had agreed to get one flat No. 102 in the proposed scheme on the above said plot to be constructed by the said M/s Green City Builders i.e. the purchaser. The said recitals in the sale deed proposed that the assessee had got the sale consideration only by way of book adjustment towards cost of apartment No. 102 and the entire amount of the sale consideration was invested by the assessee in purchase of apartment No. 102 in lieu of sale of the property in question and in this way, the entire amount was invested and no amount was received by the assessee. All those facts were placed on record by the assessee before the A.O. and thus in this way, the A.O. had passed the order of assessment after considering the facts placed on record by the assessee. In view of the above all the details were duly furnished by the assessee during the course of assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held what is erroneous. It must be an order which is not in accordance with the law or which has been passed by the ITO without making any enquiry in undue haste. We have also held as to what is prejudicial to the interests of the revenue. An order can be said to be prejudicial to the interests of the revenue if it is not in accordance with the law in consequence whereof the lawful revenue due to the State has not been realised or cannot be realised. There must be material available on the record called for by the Commissioner to satisfy him prima facie that the aforesaid two requisites are present. If not, he has no authority to initiate proceedings for revision. Exercise of power of suo motu revision under such circumstances will amount to arbitrary exercise of power. It is well-settled that when exercise of statutory power is dependent upon the existence of certain objective facts, the authority before exercising such power must have materials on record to satisfy it in that regard. If the action of the authority is challenged before the Court, it would be open to the Courts to examine whether the relevant objective factors were available from the records called for and examine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fresh determination can be directed by the Commissioner only after coming to the conclusion that the earlier finding of the ITO was erroneous and prejudicial to the interests of the revenue. Without doing so, he does not get the power to set aside the assessment. In the instant case, the Commissioner did so and it is for that reason that the Tribunal did not approve his action and set aside his order. We do not find any infirmity in the above conclusion of the Tribunal. 15. In the light of the foregoing discussion, we answer the question referred to us in the affirmative, that is, in favour of the assessee and against the revenue." We also draw strength from the decision of the Hon'ble Delhi High Court in the case of Commissioner of Income Tax -Vs.- Vimgi Investment (P) Ltd. (2007) 290 ITR 0505 (Del. HC) wherein the Hon'ble High Court has held as under: "Section 94, read with section 263, of the Income-tax Act, 1961 - Avoidance of tax by certain transactions in securities - Assessment year 2001-02 - Assessee purchased certain units of mutual funds - After receiving dividend, assessee sold those units within two or three days at a loss - In its return for relevant assessment y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relied upon judgment of this Court in case of CIT v. EL Dupont India Ltd. [2008] 169 Taxman 184 holding that provision made for doubtful debts while computing book profits under section 115JA is not required to be added back as per clause (c) of Explanation to section 115JA - Accordingly, Tribunal set aside revisional order - Whether as regards first ground, prima facie, approach of Tribunal seemed to be correct - Held, yes - Whether, even otherwise, it was not necessary to enter into this question inasmuch as, even as per revisional order passed by Commissioner under section 263, benefit under section 80-IA should have been restricted to lower amount, which had already been done by Assessing Officer by passing rectification order under section 154 - Held, yes - Whether as regards second ground, in view of fact that Explanation to section 115JB is identically worded as Explanation to section 115JA, Tribunal rightly relied upon decision in EL Dupont India Ltd.'s case (supra) and set aside impugned revisional order passed by Commissioner - Held, yes." We also find support from the decision of the Coordinate Bench of Hyderabad Tribunal in the case of Chenai Finance Co. Ltd -Vs- A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Legislature intended to allow the choice only to non-corporate assessees, nothing would have been easier to make a mention to that effect in section 145, by excluding companies from the ambit of section 145. There is no reason for circumscribing the freedom of the assessee to choose any method of accounting, which is clearly granted by the provisions of section 145. It cannot be assumed that the provisions of section 209(3) of the Companies Act override the provisions of section 145 of the Income-tax Act. The plea of the revenue that the provisions of the Income-tax Act should be read harmoniously with those of Company Law seemed attractive but there was no reason, for superseding the provisions of section 145 in the name of harmonious interpretation. These provisions, under two different enactment are parallel provisions and they do not intersect each other. At any rate, the issue whether the provisions of section 209(3) of the Companies Act, override the provisions of section 145 of the Income-tax Act, and make it mandatory to complete the assessment of the income on accrual basis, is a debatable one, on which two views are possible. That being so, since two views are possib ..... X X X X Extracts X X X X X X X X Extracts X X X X
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