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2022 (1) TMI 780 - AT - Income TaxRevision u/s 263 by CIT - disallowance of exemption claimed in respect of accumulation of income under section 11(2) - Whether for not investing in the equity shares in the investments prescribed under section 11(5) of the Act, whether assessee’s claim of exemption under section 11(2) of the Act can be denied in the impugned assessment year? - HELD THAT:- A plain reading of clause (iia) of proviso to section 13(1)(d) would make it clear that an outer limit of one year from the end of the financial year in which the income is received has been provided for making investment in the mode and manner prescribed under section 11(5) of the Act. In the facts of the present case, admittedly, the equity shares of Asian Paints Ltd were received by the assessee in the financial year 2014-15. Therefore, as per clause (iia) of proviso to section 13(1)(d) of the Act, the provisions of section 13(1)(d) of the Act would come into play after the expiry of one year from the end of the financial year 2014-15. In other words, the prohibitory conditions of section 13(1)(d) of the Act would be applicable from 01-04-2016, falling in financial year 2016-17 relevant to assessment year 2017-18. Thus, insofar as the impugned assessment year is concerned, there is no breach or violation of the conditions of section 11(5) r.w.s. 13(1)(d) of the Act. That being the case, the assessing officer could not have invoked the provisions of section 13(1)(d) r.w.s. 11(5) of the Act to deny assessee’s claim of exemption under section 11(2) of the Act in the impugned assessment year. Therefore, for this particular reason, the assessment order cannot be considered to be erroneous - one of the vital conditions of section 263 remains unfulfilled. That being the case, the revisionary authority cannot clothe him with the power to revise the assessment order under section 263 of the Act. Therefore, as a natural corollary, the order passed under section 263 of the Act has to be set aside and the assessment order is to be restored. - Decided in favour of assessee.
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