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TMI Blog2022 (4) TMI 328X X X X Extracts X X X X X X X X Extracts X X X X ..... 63 of the Act but the same did not find favour with the Ld. PCIT. Thus there was due application of mind on the part of the Assessing officer and that adequate and proper enquiry had been conducted by the Assessing officer in this regard and, therefore, the impugned order passed u/s. 263 of the Act cannot be upheld. Accordingly, we hold that the proceedings u/s. 263 of the Act were bad in law and we quash the revisionary proceedings for the reason that the Assessing officer had already made adequate inquiries on the issue raised by the Ld. PCIT and further the Ld. PCIT himself had not raised any independent inquiry on his own before coming to an incorrect concussion that the assessment order was erroneous and prejudicial to the interest of Revenue. Appeal of the assessee stands allowed. - ITA No. 56/CHD/2021 - - - Dated:- 25-3-2022 - N. K. Saini , Vice President And Sudhanshu Srivastava , Member ( J ) For the Appellant : Parikshit Aggarwal, C.A. For the Respondents : Vivek Nangia, CIT-DR ORDER Per Sudhanshu Srivastava , Judicial Member This appeal is preferred by the assessee against the order passed u/s. 263 of the Income Tax Act, 1961 (hereinafter cal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tal gain will be granted proportionately on the basis of investment of net consideration either for purpose or construction of the residential house . Since the investment made in residential property u/s. 54F is ₹ 6,41,94,000/-, which is less than the net consideration in respect of capital asset transferred, therefore, proportionate deduction in terms of provisions of Section 54F of the IT Act, 1961 was to be allowed as per calculation given as under:- Long Term capital Gain * amount reinvested Net consideration It is further seen that while working out deduction u/s. 54F, the effect of investment of Long Term Capital Gain already availed u/s. 54B was not given resulting in excess claim u/s. 54F 5. Thus from the above, it is sufficiently clear that the allowable deduction u/s. 54F has been wrongly worked out and allowed resulting in loss of revenue. 6. In view of the facts stated above, the assessment framed u/s. 143(3) on 23.11.2017 for A.Y. 2015-16 is erroneous in so far as prejudicial to the interest of the revenue in terms of provisions of section 263(1) of the Income Tax Act, 1961 read with Explanation 2 of the said section. 7. You are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are otherwise. 1.5. The Worthy Pr. CIT has erred in holding the assessment order to be erroneous and prejudicial to the interest of revenue vide her observations in Paras 8 to 11, even when she herself admitted in the/impugned order that those issues pertain to subsequent years. 1.6. The Worthy Pr. CIT has erred in making certain observations in Paras 8 to 11 of the impugned order even when such issues pertain to subsequent years and therefore she has exceeded her jurisdiction in noting such observations in the revisionary order u/s. 263 for the year in question and hence such observations deserves to be expunged. 1.7. The Worthy Pr. CIT has conducted the impugned proceedings u/s. 263 in extreme haste and without affording reasonable opportunity of being heard to the appellant. 2. That the appellant craves leave for any addition, deletion or amendment in the grounds of appeal on or before the disposal of the same. 3. The Ld. Authorised Representative (AR) submitted that the assessee is an individual who, along with his son Shri Princepreet Jit Singh Bassi, was co-owing certain agricultural land and they had agreed to sell this land to M/s. Gilco Developers a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore, cancelling the assessment for the purpose of passing an order afresh on the issue was not as per the mandate given to the Ld. PCIT in terms of section 263 of the Act. 3.2. The Ld. AR placed reliance on the numerous judicial precedents in support of his contention that the order passed u/s. 263 was bad in law and deserved to be quashed. 4. Per contra, the Ld. CIT DR vehemently supported the order of the Ld. PCIT and argued that there have been many lapses on the part of the Assessing officer to conduct proper inquiries into the nature of lands sold and purchased. It was further submitted that the Ld. PCIT had rightly pointed out that the Assessing officer had not inquired into the genuineness of the investment made by the assessee in terms of section 54 of the Act. It was submitted that the assessee's claim of investment in residential house had not been examined properly by the Assessing officer and the Assessing officer had accepted the assessee's contention in a very casual manner. It was reiterated that the Assessing officer had accepted the assessee's claim without any inquiry or evidence what-so-ever and, therefore, the order was erroneous and prejud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6.1. We have also perused the assessment order as well as the questionnaire issued by the Assessing officer and we note that although the assessment order is very short and cryptic and does not elaborately discuss the issues which were before the Assessing officer, it is not a requirement of law that the assessment order should be written in an elaborate manner. From the perusal of the questionnaire issued by the Assessing officer with respect to the inquiry into assessee's claim u/s. 54 of the Act, it is apparent that the Assessing officer was on right track and had made an inquiry on the issue for which the assessee's case had been selected for limited scrutiny. It is also not the case of the Department that the assessee did not give proper response to the query raised by the Assessing officer, as is evidenced by the voluminous documents which have been filed by the assessee in response to the query raised by the Assessing officer. Therefore, by no stretch of imagination, it can be said that the Assessing officer had failed to make the required/proper inquiries/verification. 6.2. We also agree with the contention of the Ld. AR that the issue of exemption by claiming i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rected the Assessing officer to carry out detailed inquires. In our considered opinion, the Ld. PCIT, without making further inquiries on his own account, has simply stated in the impugned orders that the Assessing officer was required to make more inquiries. The Ld. PCIT has not pointed out as to what further inquiries was the Assessing officer required to make and as to how without those inquires the order of the Assessing officer were erroneous in so far as prejudicial to the interest of the Revenue. 6.5. Similarly, the Hon'ble Delhi High Court in the case of DIT Vs. Jyoti Foundation [2013] 357 ITR 388 (supra) held as under: that inquiries were certainly conducted by the Assessing Officer. It was not a case of no inquiry. The order under section 263 itself recorded that the Director felt that the inquiries were not sufficient and further inquiries or details should have been called for. The inquiry should have been conducted by the Director himself to record the finding that the assessment order was erroneous. He should not have set aside the order and directed the Assessing Officer to conduct the inquiry. 6.6. In the present case also, the A.O. made the requisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... principles of natural justice or without application of mind. The phrase prejudicial to the interests of the Revenue is not an expression of art and is not defined in the Act. Understood in its ordinary meaning it is of wide import and is not confined to loss of tax. The scheme of the Act is to levy and collect tax in accordance with the provisions of the Act and this task is entrusted to the Revenue. If due to an erroneous order of the Income-tax officer, the Revenue is losing tax lawfully payable by a person, it will certainly be prejudicial to the interests of the Revenue. The phrase prejudicial to the interests of the Revenue has to be read in conjunction with an erroneous order passed by the Assessing Officer. Every loss of revenue as a consequence of an order of the Assessing Officer, cannot be treated as prejudicial to the interests of the Revenue, for example, when an Income-tax Officer adopted one of the courses permissible in law and it has resulted in loss of revenue, or where two views are possible and the Income-tax Officer has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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