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2012 (4) TMI 222 - HC - Income Tax
Validity of revisionary powers exercised by CIT u/s 263 – exemption u/s 54F for LTCG on sale of shares granted by A.O. – shares purchased on 21.04.2000 for ₹ 19,536 sold on 02.05.2001 for ₹ 6,36,640 – increased price of more than 30 times in one year – CIT suo-moto assumed jurisdiction on ground that AO failed to make any enquiry while accepting genuineness of the share transaction – Tribunal set aside order of CIT - Reference to Larger bench - Held that:-An incorrect assumption of facts or an incorrect application of law will satisfy the requirement of the order being ‘erroneous’. Non-application of mind and omission to follow natural justice is in same category and are not beyond the scope of Section 263. Assumption of jurisdiction by CIT is justified. See CIT vs Daga Entrade P. Ltd (2009 (2) TMI 431 - GAUHATI HIGH COURT), Malabar Industrial Co. Ltd. vs. CIT (2000 (2) TMI 10 - SUPREME Court) – Decided in favor of Revenue.