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TMI Blog2023 (2) TMI 1060X X X X Extracts X X X X X X X X Extracts X X X X ..... eriod, therefore, the same should be condoned. On the other hand, the Ld. DR did not raise any objection on the condonation of delay in filing the appeal by the assessee. Accordingly, we condone the delay in filing the appeal by the assessee in pursuance to the judgment of Hon'ble SC in the case of Cognizance for Extension of Limitation, In reported in 125 taxmann.com 151 and proceed to adjudicate the issue on merit. First, we take up ITA No. 93/AHD/2021 in case of Shri Tulsibhai Polabhai Sakariya 2.1 The assessee has raised following grounds of appeal: "1. The grounds of appeal mentioned hereunder are without prejudice to one another. 2. The order passed by Pr. Commissioner of Income-tax, Rajkot-1[hereinafter referred as to the "PCIT"] is bad in law, invalid and requires to be quashed, the same may kindly be quashed. 3. Ld. PCIT erred in law and on facts in arriving at a conclusion to the effect that the assessment order passed by the AO was erroneous as well as prejudicial to the interest of the revenue on the ground that such order was passed without making proper enquiries. Therefore, the order passed Pr.CIT is requires to be quashed and may kindly be quashed. 4. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same accepted the claim of the assessee towards the cost of acquisition. In such a scenario, the provision of section 263 of the Act cannot be invoked merely for the reason that the learned CIT/PCIT has a different view than the view adopted by the AO. 7. The assessee further submitted that as per the provisions of section 55A of the Act the valuation of a registered valuer can be disregarded by the AO and referred to the DVO if the AO is of the opinion that the value adopted is less than the FMV whereas the value adopted in his case exceeds the FMV. In view of the above, the assessee contended that there is no error in the assessment order as the same was passed by the AO after due verification and inquiry. 8. However, the learned Pr. CIT was not convinced with the submission of the assessee. The learned Pr. CIT held that the registered value adopted by the assessee of the impugned property at Rs. 740 per Sq. Mts. as on 1st April 1981 is abnormally high as compared to the Jantari value as on 1st November 1999. The Jantri value of a property is fixed by the district administration including revenue authority. The fact that the Jantri value of the impugned land stand at Rs. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ggesting the value of the property as on 1 April 1981 and furthermore no enquiry from the local parties has been done. It was also pointed out that the AO is not a competent person to verify the value declared by the assessee as on 1 April 1981 based on the valuation report. As such the AO should have referred the matter to the DVO to find out the value of the property in dispute. The learned DR vehemently supported the order of the ld. PCIT. 12. We have heard the rival contentions of both the parties and perused the materials available on record. The issue in the present case relates whether the assessment order has been passed by Ld. AO without making inquiries or verification with respect to the value of cost of acquisition adopted by the assessee while computing capital gain on sale of agricultural land as discussed above and hence the assessment is erroneous insofar prejudicial to the interest of the Revenue and thus requiring revision by Pr. CIT u/s 263 of the Act. 13. An inquiry made by the Assessing Officer, considered inadequate by the Commissioner of Income Tax, cannot make the order of the Assessing Officer erroneous on account of non-verification. In our view, the ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t judicial and quasi-judicial controversies as it must in other spheres of human activity. 16. The Mumbai ITAT in the case of Sh. Narayan TatuRane Vs. ITO, I.T.A. No. 2690/2691/Mum/2016, dt. 06.05.2016 examined the scope of enquiry under Explanation 2(a) to section 263 in the following words:- "20. Further clause (a) of Explanation states that an order shall be deemed to be erroneous, if it has been passed without making enquiries or verification, which should have been made. In our considered view, this provison shall apply, if the order has been passed without making enquiries or verification which a reasonable and prudent officer shall have carried out in such cases, which means that the opinion formed by Ld Pr. CIT cannot be taken as final one, without scrutinising the nature of enquiry or verification carried out by the AO vis-à-vis its reasonableness in the facts and circumstances of the case. Hence, in our considered view, what is relevant for clause (a) of Explanation 2 to sec. 263 is whether the AO has passed the order after carrying our enquiries or verification, which a reasonable and prudent officer would have carried out or not. It does not authorise or give ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order of revision. No question of law arises. Tax Appeal is dismissed" 18. The Supreme Court in the another recent case of Principal Commissioner of Income-tax-2, Meerut v. Canara Bank Securities Ltd [2020] 114 taxmann.com 545 (SC), dismissed the Revenue's SLP holding that 263 proceedings are invalid when AO had made enquiries and taken a plausible view in law, with the following observations: "Having heard learned counsel for the parties and having perused the documents on record, we see no reason to interfere with the view of the Tribunal. The question whether the income should be taxed as business income or as arising from the other source was a debatable issue. The Assessing Officer has taken a plausible view. More importantly, if the Commissioner was of the opinion that on the available facts from record it could be conclusively held that income arose from other sources, he could and ought to have so held in the order of revision. There was simply no necessity to remand the proceedings to the Assessing Officer when no further inquiries were called for or directed" 19. From an analysis of the above judicial precedents, the principle which emerges is that the phrase ' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Long Term Capital Gain of Rs. 56,32,566/-, we herewith attached Calculation of this capital gain in Computation of Income for A Y 2015-16, Sale Deed of Agriculture land and Valuation Report of valuer for values as on 01/04.1981. 4. We herewith attached copy of Copy of Bank statement for the period 01/04/2014 to 31/03.2015 of all banks. 5. We have purchase a one old residential house and this house is demolished and made a new residential house and claimed these amount as deduction U/s 54F so we herewith attached copy of Residential House A/c., Purchase deed of old residential house and copy of bill of construction cost for your reference." 20.2 From the above, it is revealed it is not the case that the AO has not made any enquiry. Indeed, the Pr. CIT initiated proceedings under section 263 of the Act on the ground that the AO has not made enquiries or verification which should have been made in respect value of land adopted by the registered valuer. It is not the case of the Pr. CIT that the Ld. AO did not apply his mind to the issue on hand or he had omitted to make enquiries altogether. In the instant set of facts, the AO had made enquiries and after consideration of mate ..... 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