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2016 (9) TMI 206 - AT - Income TaxRevision u/s 263 - exemption under section 54EC - Held that - Commissioner in the present case has purported to act in exercise of power under section 263 on the ground that the order of the Assessing Officer in granting exemption under section 54EC to the extent of Rs. 1 crore is without any enquiry and therefore erroneous in so far as prejudicial to the interests of the Revenue. We notice that there are several judicial precedents on the issue of allowability of exemption to the extent of Rs. 50 lakhs each in one or more financial years under section 54EC of the Act. The action of the assessee in making investments of Rs. 50 lakhs each in two different financial years is therefore not out of sync with these judicial precedents. Hence there is an apparent plausibility in the action of the Assessing Officer in accepting the claim of Rs. 1 crore under section 54EC. Thus the action of the Assessing Officer in adopting a view expressed by the superior forum cannot be viewed as arbitrary or unreasonable. The issue involved is pre-dominantly legal in nature and does not require any factual enquiry. On objective consideration of the facts on record it is difficult to hold that action of the Assessing Officer was erroneous per se and hostile to the interest of the Revenue. Thus source of power to set-aside the assessment order is not traceable to section 263 of the Act. In view of upholding the exemption to the extent of Rs. 50 lakhs each invested in long term specified asset in two different financial years for the purposes of section 54EC and in the light of subsequent amendment carried in the Act the action of the Assessing Officer is clearly plausible in law. Accordingly no error can be inferred in the assessment order per se. Resultantly we find merit in the plea of the assessee on this issue and hence the order of the Commissioner under section 263 dated 10.10.2014 is set-aside and quashed. - Decided in favour of assessee.
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