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2022 (7) TMI 170 - AT - Income TaxRevision u/s 263 - eligibility of Deduction u/s 54F - construction of a new residential property from the sale of the land - CIT found that the AO has not made proper inquiry before allowing deduction under section 54F viz. whether the assessee has deposited capital gain amount in the specified capital gain tax account, whether the assessee spent the money for construction of a residential house; whether the assessee is entitled to claim deduction under section 54F for more than one residential house; AO failed to verify whether the land sold was an agriculture land two years before the date of transfer of the said land not verified that no agriculture income has been shown by the assessee from the above agriculture land - HELD THAT:- From scrutiny sheet of the Income Tax Department relating to the assessee wherein the reason on which cases selected for scrutiny is given as “AO should examine the sources of investment in property as appearing in AIR”. However, it is seen from the assessment order dated passed by the AO that it is very cryptic order confined to two paragraphs only without making any discussions and justification for the relief granted to the assessee either under section 54B or under section 54F of the Act. In the assessment order passed by the AO, there is no whisper on the inquiries made by him, before passing regular assessment order. Probably for this reason, the ld.CIT has reopened the assessment under section 263 We find that the ld.CIT also has not verified assessment record properly and simply carried out the objections made by the Internal Audit Party of the department, and thereby initiated the Revision proceedings. It can be seen from the show cause notice issued under section 263 of the Act, wherein the ld.CIT has categorically mentioned that the AO did not verify the facts and allowed the deduction under section 54B & 54F of the Act. This observation by the ld.CIT is not correct, for the reason that the ld.AO has called for the details from the Sub-Registrar and received reply from Sub-Registrar on 24.1.2011 and 7.9.2011 respectively. AO though made inquiry about the claim made by the assessee, however, not discussed the same while passing assessment order. Thus, we find that the ld.CIT has initiated Revision proceeding based on the Internal Audit Party report only, which is not maintainable in law following jurisdictional High Court in the case of N.K. Roadways P.Ltd. (2014 (6) TMI 188 - GUJARAT HIGH COURT] - Hon’ble Supreme Court [1970 (4) TMI 4 - SUPREME COURT] also held that revision made by the Commissioner simply following direction of the Board, which may control exercise of power of officers of department in administrative matters but not quasi-judicial matters. In case of judicial matters, the Commissioner should apply his mind and initiate proceedings in accordance with law and not merely carry out directions of the Board. Thus, any order passed pursuant to the directions of the Board is liable to be set aside as Commissioner has not applied his independent judgments in invoking revision proceedings. We hold that revision order passed by the ld.CIT is not in accordance with law and the same is hereby quashed. Appeal of assessee allowed.
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