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2017 (11) TMI 1061 - AT - Income TaxInvocation of jurisdiction under section 263 - Reopening of assessment already initiated - addition u/s 40A(3) - Held that:- We are of the considered opinion the Ld. Pr. CIT could not have sought to revise an order passed under section 147 read with 143 (3) of the Act on an issue which was not a subject matter of the reassessment proceedings under section 147 in the first place and the of assumption of jurisdiction under section 263 of the Act loses its validity on this count itself. Further, the fact of the matter remains that the assessee had not claimed any expenditure towards purchase of land during the year under consideration and, therefore, the provisions of section 40A (3) of the Act could not have been legally invoked as they come into play only when an amount, which has been claimed as an expenditure, has been paid in cash. It is our considered opinion that the Ld. Pr. Commissioner of Income Tax was also not justified in setting aside the re-assessment order and directing the framing of an assessment by applying provisions of section 40A (3) of the Act in a situation when the provision could not be invoked and the same would be contrary to the provisions of law, if so invoked. It is our considered opinion that the Ld. Pr. CIT does not have the power to direct the AO to do something which the Act itself does not permit. The invocation of jurisdiction under section 263 of the Act loses its validity on this count also. Accordingly, we hold that the Commissioner of Income Tax had no jurisdiction or power to invoke provisions of section 263 of the Act on the facts and circumstances of the case and we deem it fit to quash the order passed under section 263 of the Act. Appeal of the assessee is allowed.
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