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2022 (8) TMI 510 - AT - Income TaxRevision u/s 263 - As per CIT assessee has not complied with the provisions of section 54 and 54EC while claiming exemption under these sections of The Act under the heat Long Term Capital Gains and certain expenses which were considered as cost of flat are disallowable - PCIT has observed that the AO should have examined when actually the property after completion was handed over to the assessee so as to comply with provisions of section 54 as for exemption under section 54 the construction should have been completed within a period of 3 years - HELD THAT:- There is no doubt that enquiry on the limited scrutiny issue was initiated by the AO and duly responded by the assessee, the AO also mentioned in the order that “The Documents as submitted by the assessee were examined and placed on record”, however no remark on the issue has been made by the AO in assessment order, therefore this shall be considered that the AO was satisfied with the enquiries made. Our considered view on this issue is that, if Pr. CIT/CIT is of the view that any enquiry is necessary in the matter, then he should either himself make such enquiry or may get such enquiry conducted. For the purpose of exercising jurisdiction u/s 263 the conclusion that the order of the AO is erroneous and prejudicial to the interest of the revenue has to be preceded by some minimal enquiry by Pr. CIT/CIT. If the Pr. CIT/CIT is of the view that the AO did not undertake any enquiry, it becomes incumbent on the Pr. CIT/CIT to conduct such enquiry. If the Pr. CIT/CIT does not conduct such basic exercise then the Pr. CIT/CIT is not justified in setting aside the order u/s. 263 of the Act. Decision of Hon'ble Delhi High Court in the case of CIT Vs. Hindustan Marketing and Advertising Company Limited [2010 (9) TMI 352 - DELHI HIGH COURT] is relevant in this case where the Hon'ble Delhi High Court has held that where the ITO had made reasonable detailed enquiries, had collected relevant material and discussed various facts of case with assessee, order of CIT to direct fresh assessment by going deeper into the matter would not form a valid or legal basis to exercise jurisdiction u/s 263. As on perusal of the fact of the case it is explicitly clear that this case cannot be said to be a case of no enquiry or inadequate enquiry, therefore, proceedings initiated u/s 263 by the Ld PCIT holding the order of AO as erroneous and prejudicial to the interest of revenue are not sustainable, hence quashed. Assessee appeal allowed.
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