The assessee's case was selected for limited scrutiny under CASS. ...

Assessee wins case over PCIT's incorrect invocation of Section 263 on immovable property valuation.

Case Laws     Income Tax

October 10, 2024

The assessee's case was selected for limited scrutiny under CASS. The PCIT observed that the assessee, along with two co-owners, had purchased an immovable property (land), each having an equal one-third share. It was held that Section 142(1) cannot extend the scope of a defective notice u/s 143(2) without PCIT's approval, which was not obtained. The notice u/s 142(1) mentioned the transfer of property, not its purchase. The assessee provided details regarding large cash deposits and property transfer during the assessment proceedings. The PCIT cannot invoke Section 263 when the assessee has provided detailed replies to the issues raised by the AO u/ss 143(2) and 142(1). The AO passed the assessment order after considering all relevant details, which cannot be deemed erroneous or prejudicial to revenue. The PCIT's stance on the valuation of the immovable property based on stamp duty value cannot be the sole criterion for deeming the assessment order erroneous and prejudicial to revenue's interests. Consequently, the PCIT's order invoking Section 263 was held unjustified, and the decision was in favor of the assessee.

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