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TMI Blog2023 (9) TMI 1608X X X X Extracts X X X X X X X X Extracts X X X X ..... isionary authority may not have exercised his powers under section 263 of the Act. That being the factual and legal position, in our view, the exercise of powers under section 263 of the Act in the present case has to be declared invalid. PCIT has mentioned that agreement to purchase agricultural land from Smt. Sangeeta Singh cannot be made the basis for deduction u/s 54B of the Act. It is not in dispute that in the instant case, an agreement to sell cum with possession deed was duly executed on 30.07.2009. The observation of the Ld. PCIT gives raise to the legal question whether any right is created in favour of the purchaser on execution of agreement to sell. As relying on Sanjeev Lal [ 2014 (7) TMI 99 - SUPREME COURT] we hold that the exemption u/s 54B of the Act is admissible since the assessee sold agricultural land and made payment for purchase of another agricultural land and took possession of land thereon. Thus, we hold that the impugned order passed under section 263 of the Act is unsustainable. Accordingly, the order passed under section 263 of the Act is quashed and the assessment order is restored. - SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER AND SHRI M. BALAGANESH ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt order dated 21.03.2016 which is sought to be revised u/s 263 itself was invalid on various grounds as mentioned below and thus proceedings initiated u/s 263 against the invalid reassessment order is clearly bad in law. (a) That assumption of jurisdiction u/s 147 is itself is bad in law as the reason recorded would not have led to the formation of belief of escapement of income. (b) That impugned reassessment order was passed without complying with the mandatory conditions of section 147 to 151 of Income Tax Act, 1961. 2. That in any case and in any view of the matter, Ld. Pr. CIT has erred in law in assuming jurisdiction and passing the impugned order u/s 263, is bad in law and against the facts and circumstances of the case. Since the above grounds are purely legal and does not require fresh facts to be investigated and goes to the root of the matter, it is prayed that it may please be admitted in view of the Hon'ble Supreme Court decision in the case of NTPC Limited 229 ITR 383. 4. The only effective issue to be decided in this appeal is as to whether the Ld. PCIT was justified in assuming revision jurisdiction u/s 263 of the Act in the facts and circumstances of the insta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1) of the Act specifically making enquiries particularly into the details of property purchased by the assessee and also calling for making for capital gains on sale of property. The assessee duly replied to the same furnishing all the requisite details together with claim of deduction u/s 54B of the Act. The assessee also enclosed the copy of agreement to sell cum with possession deed dated 30.07.2009 entered into between Smt Sangeeta Singh and assessee which show that it was agricultural land and the payment of which was made through cheques and possession too was delivered to the assessee. These evidences are enclosed in pages 31 to 34 of the Paper Book. The Ld. AO sought details from the assessee vide order sheet noting dated 08/02/2016 seeking certain clarifications on claim of deduction u/s 54B of the Act. The assessee made submission before the Ld. A.O. on 03/03/2016 submitting that the land sold was agricultural land and that deduction u/s 54B of the Act was correctly claimed in view of the evidences filed and the payment for the said purchase is made through proper banking channel. The assessee made further submissions before the Ld. AO on 16/03/2016 giving evidence with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as to independently apply his mind to the materials on record before coming to a conclusion that the order sought to be revised is erroneous and prejudicial to the interests of revenue. The decision making process under section 263(1) of the Act has to be that of the revisionary authority and cannot be at the behest of some other subordinate authority. In the facts of the present appeal, it is abundantly clear that the exercise of powers under section 263 of the Act is not due to any independent application of mind by the revisionary authority, but at the behest of the Income- tax Officer. Had the Assistant Commissioner of Income Tax not sent any proposal for initiating proceedings under section 263 of the Act, it is quite probable, the revisionary authority may not have exercised his powers under section 263 of the Act. That being the factual and legal position, in our view, the exercise of powers under section 263 of the Act in the present case has to be declared invalid. In support of our conclusion, we rely upon the following decisions: (i) Vinay Pratap Thacker (ITA No. 2939/Mum/2011 dated 27.02.2013 (ii) Ashok Kumar Shivpuri (ITA No. 631/Mum/2014 dated 07.11.2014 (iii) Shanti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith no order as to costs. The impugned judgments are quashed and set aside and the Authorities are directed to re-assess the income of the appellants for the Assessment Year 2005-2006, after taking into account the fact that the appellants were entitled to the relief, subject to fulfilment of other conditions. 9. Respectfully following the aforesaid decision of Hon ble Apex Court, we hold that the exemption u/s 54B of the Act is admissible since the assessee sold agricultural land and made payment for purchase of another agricultural land and took possession of land thereon. 10. In view of our aforesaid observations on the original grounds of appeal filed by the assessee, we do not deem it fit to adjudicate the additional grounds raised by the assessee before us. Hence those additional grounds are hereby left open. 11. Thus, considering the totality of facts and circumstances of the case, we hold that the impugned order passed under section 263 of the Act is unsustainable. Accordingly, the order passed under section 263 of the Act is quashed and the assessment order is restored. 12. In view of the aforesaid observations, we have no hesitation to quash the revision proceedings u/s 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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