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TMI Blog2022 (8) TMI 959X X X X Extracts X X X X X X X X Extracts X X X X ..... enue, unless the view taken by the AO is totally unsustainable in law. In this regard, we draw strength from the decision of the Hon'ble Supreme Court in the case of Malabar Industrial Co. Ltd. [ 2000 (2) TMI 10 - SUPREME COURT] We do not concur with the findings of the ld. PCIT. Thus the order passed u/s 263 of the Act, by the ld. PCIT is quashed. Hence, the appeal of the assessee is allowed. - ITA. No. 62/JP/2021 - - - Dated:- 16-8-2022 - Dr. M.L. Meena, AM And Dr. S. Seethalakshmi, JM For the Assessee : Shri Rajeev Sogani (C.A.) And Miss Shivangi Samdhani (C.A.) For the Revenue : Shri Sanjay Dhariwal (CIT) ORDER PER: DR. S. SEETHALAKSHMI, J.M. This is an appeal filed by the assessee directed against the order of the learned Principal Commissioner of Income Tax [hereinafter referred to as (PCIT)], Jaipur-1 passed under 263 of the IT Act dated 05.03.2021 for the Assessment year 2016-17. 2. At the outset of hearing, the Bench observed that there is delay of 62 days in filing the appeal by the assessee for which the ld. AR of the assessee filed a condonation application dated 05.07.2021 along with Hon ble Supreme Court order, vide Misc. Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned, on sale of such immovable property, in her return of income. The assessee further claimed deduction u/s 54F while offering capital gains for taxation . Assessment was completed u/s 143(3) and the returned income was accepted. The case of the assessee was then selected for revisionary proceedings. Order u/s 263 was passed and the assessment was set aside to the file of Id. AO to check the taxability of capital gains in the hands of the assessee and to check the claim of deduction u/s 54F. 7. In the aforesaid order, the AO issued notice to the assessee u/s 142(1) of the I.T. Act, 1961 and re-adjudicated the matter. The relevant part of the assessment order is reproduced as under:- 5. The assessee has claimed deduction u/s 54F OF Rs.7,84,968/- was not shown in original ITR filed which was on 16.12.2016. Thereafter, the assessee has filed revised return showing claimed deduction u/s 54F of Rs.7,84,968/ on 31.03.2018. During the year the assessee claimed deduction u/s 54F valuation report for supporting evidences regarding the such claimed and also shown her income from Salary of Rs.2,16,000/-. 6. The reply filed by the assessee through A/R on the ITBA portal vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 10.04.2017. The Hon ble SC has held as follows in the case. In all these cases, we find that the Commissioner of Income Tax had passed an order under section 263 of the Income Tax Act, 1961 with the observations that the Assessing Officer did not make any proper inquiry while making the assessment and accepting the explanation of the assessee(s) insofar as receipt of share application money is concerned. On that basis the Commissioner of Income Tax had, after setting aisle the order of the Assessing Officer, simply directed the Assessing Officer to carry through and detailed inquiry. It is this order which is upheld by the High Court. We see no reason to interfere with the order of the High Court. The Speal Leave Petitioner are dismissed. 6. I, therefore, set aside the assessment order passed by the AO u/s 143(3) of the act on 18.12.2018 to be made afresh after considering the issues as listed in paras 4.1 4.2 supra. Needless to say that since, there was no appearance on behalf of the assessee during this proceedings, AO shall give an opportunity of being heard to the assessee before completing the assessment pursuant to this order. 9. Being aggrieved by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT, directing revision of order, is unjustified. In view of the above factual and legal position, Id. PCIT has grossly erred in assuming jurisdiction under section 263. Thus, the entire such proceedings initiated by the ld. PCIT deserves to the quashed. 10. On the other hand, the ld. DR relied on the orders of the lower authorities. 11. We have heard the rival contentions and perused the material available on record. The contentions of the Ld AR for the assesee are that the assessee filed the return of income on 16-12-2016 declaring total income of Rs.16,79,780-/, But due to change of incumbent the notice u/s 142(1) of the Act along with questionnaire was issued and sent on 28-09-2018 through E-mail requiring certain details from the assessee. Further the AO noted that no compliance was made by the assessee. Thereafter a show cause notice letter alongwith notice u/s 142(1) was issued to the assessee vide letter dated 27-10- 2018 to be heard on 31-10-2018. It is noted from the assessment order as under:- compliance of notices, the assessee has furnished requisite details/ information on ITBA. In the reply of the A/R of the assessee, he submitted revised copy of IT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . PCIT held that AO failed to examine who was the rightful owner of such immovable property and, thus, AO erred in taxing wrong person instead of Mahesh Medatwal. It is also pertinent to note that Ld. PCIT relied upon the decision in the cases of CIT vs Shri C. Sugumaran- ITA no. 840 of 2014 and Hon'ble ITAT Jaipur Bench in the case of Shri Gyan Chand Agarwal- ITA No. 266/JP/2017 wherein it was held that when sale deed was executed by the assessee in capacity of power of attorney holder then capital gains cannot be taxed in the hands of the assessee as assessee was not the owner. Hence the Bench feels that when ld. PCIT concluded that the assessee was wrongly taxed for the capital gains which did not accrue to her, then ld. PCIT had no jurisdiction to proceed further under section 263 of the Act and examine the deduction u/s 54F. There was error of taxing wrong person but there was no prejudice caused to the revenue. The ld. PCIT has to be satisfied of twin conditions, namely (i) the order of the AO sought to be revised is erroneous; and (ii) it is prejudicial to the interests of the Revenue. If any one of them is absent then Section 263 cannot be invoked. Every loss of revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X
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