TMI Blog2021 (3) TMI 997X X X X Extracts X X X X X X X X Extracts X X X X ..... not been made in the order of assessment, but the same is apparent from the record of the proceedings, the invocation of jurisdiction by the ld. CIT was unsustainable. Where the AO has made an enquiry and taken a possible/permissible view, then the said order cannot be treated as erroneous and prejudicial to the interests of the Revenue unless the view taken by the AO is unsustainable in law. Hon ble Supreme Court in case of Malabar Industrial Co. Ltd. vs. CIT [ 2000 (2) TMI 10 - SUPREME COURT] has held that an order of ITO cannot be treated as prejudicial to the interests of the Revenue if the ITO adopted one of the courses permissible in law and it has resulted in loss of revenue or two views are possible and the ITO has taken one view with which the ld. CIT does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the revenue unless the view taken by the ITO is unsustainable in law. Once the AO has taken a possible view on the issue of allowability of deduction under section 54B and 54F, then the ld. PCIT is not permitted to invoke the provisions of section 263 merely because he does not agree with the view of the AO. Hence in the fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of land subsequently purchased were being used for agricultural purposes for claiming deduction u/s 54B of the Act and secondly, the expenditure incurred on improvement of the land sold was not verified by the Assessing Officer. Further, the Assessing officer has not examined the nature of investment made in new house for the purposes of claiming deduction u/s 54F of the Act. In response to the show-cause, the assessee filed his submissions and after taking into consideration the submission so filed by the assessee though not agreeing to the same, invoking jurisdiction u/s 263, the order passed by the AO was held by the ld Pr CIT as erroneous in so far as prejudicial to the interest of Revenue and the matter was set aside to the file of the Assessing Officer to taking into account all the relevant facts and decide the aforesaid issues relating to computation of long term capital gains after giving necessary opportunity to the assessee. Against the said order and the findings of the ld. Pr. CIT, the assessee is in appeal before us. 3. During the course of hearing, the ld. AR submitted that the assessee has claimed deductions u/s 54B and 54F amounting to ₹ 1,57,98,799/- w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al wisdom of Assessing Officer or to replace his wisdom in the guise of revision unless the view taken by the Assessing Officer is not at all sustainable in law. It was submitted that extent of enquiry can be stretched to any level by forcing the Assessing Officer to go through the assessment process against and again this proposition is not authorized by the law and in support, reliance was placed on the decision of the Hon ble Rajasthan High Court in the case of CIT vs. Ganpat Ram Vishnoi 296 ITR 292 (Raj.). It was further submitted that the ld. Pr. CIT has erred in assuming revisionary jurisdiction u/s 263 by merely referring to Clause (a) to Explanation 2 to Section 263, introduced by Finance Act, 2015. It was submitted that said Explanation 2 to section 263 inserted vide Finance Act, 2015, cannot be said to have overridden the law, as laid down by Hon ble Supreme Court and different High Courts with respect to provisions of Section 263, and also the basic requirements of Sub-Section (1) of Section 263. In this regard, reliance was placed on the Co-ordinate Bench decisions in case of Torrent Pharmaceuticals Ltd. [2018] 173 ITD 130 (Ahd) and Shri Narayan Tatu Rane vs ITO Ward ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ital gain account scheme, the AO has not carried out verification in terms of satisfaction of other conditions stipulated in section 54F. In support of his contentions, reliance was placed on the Hon ble Allahabad High Court decision in case of CIT vs Bhagwan Das [2005] 142 Taxman 1 (All) and Pune Benches decision in case of Hindumal Balmukund Investment Co. Pvt. Ltd vs PCIT (ITA No. 562/PUN/2019 dated 3.08.2020). The ld. CIT/DR accordingly supported the order passed by the ld. Pr.CIT and it was submitted that there is no infirmity in the said order of ld. Pr. CIT and the same may be confirmed and the appeal of the assessee should be dismissed. 5. We have heard the rival contentions and perused the assessment order passed by the AO under section 143(3), show cause notice as well as the impugned order passed under section 263 of the Act by the ld. Pr.CIT besides other material available on record. It is noted that the case of the assessee was selected for limited scrutiny through CASS for the purposes of verifying the deduction claimed under the head capital gains as apparent from the assessment order passed u/s 143(3) and which also finds mention in the impugned order passed u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e from capital gains and the returned income was accepted. Therefore, the question of lack of enquiry does not arise when the Assessing officer has taken up the scrutiny and issued the notice under section 142(1) along with a questionnaire calling for all the details relevant to the acquisition of the agriculture land being sold as well as subsequent agriculture land purchased as well as of cost of improvement. It is also not in dispute that the assessee produced the relevant details and evidences and specifically the sale and purchase documents for disposing off and subsequent acquiring the agricultural land, Girdawari reports evidencing the carrying on of agricultural operations as well as the valuation report towards the cost of improvement and the amount invested in Capital Gain Account Scheme. The ld. PCIT has also not doubted the facts as brought on record by the assessee and considered by the AO while passing the assessment order. 8. There is no quarrel on the point that lack of enquiry renders the order of the AO as erroneous so far as it is prejudicial to the interests of the Revenue. However, it is manifest from the record that this is not a case of lack of enquiry on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... produce documents or material in relation to 10 different items, which included the details of capital contributed by partners, details of purchases made in excess of ₹ 20,000 with evidence, confirmation of unsecured loans, amongst other matters, which the Assessing Officer desired to enquire into. The assessee has produced desired information by 15-11-1995. There-after, the case was adjourned to 22-11-1996 and 1-12-1995. On 5-12-1995, the Assessing Officer studied the sundry creditors, unsecured loans and desired to furnish affidavits of unsecured loans and details of interest paid and the case was adjourned to 19-1- 1996. On 19-1-1996, the Assessing Officer again required the assessee to furnish the details of partners capital accounts and also to produce voucher for expenses and the matter was adjourned for 23-1-1996. On 23-1-1996, the case was discussed and finalised. After that, assessment was completed by passing assessment order. These matters clearly indicate that the Assessing Officer particularly made reference to the matters, which the CIT has opined were not inquired. Thus, according to the Tribunal, the foundation to exercise power ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer was not in accordance with law, the invocation of jurisdiction by the CIT was unsustainable. As the exercise of jurisdiction by the CIT is founded on no material, it was liable to be set aside. Jurisdiction under section 263 cannot be invoked for making short enquiries or to go into the process of assessment again and again merely on the basis that more enquiry ought to have been conducted to find something. 12. The finding of the Tribunal that the ITO had passed assessment order after relevant enquiries and considering the aspects of the matter required by the CIT to be considered by him is a finding of fact and on the basis of which, the jurisdiction assumed by the CIT being non-existent must be held to be not sustainable. Consequently, the appeal fails and is hereby dismissed. Thus the Hon ble High Court has held that the ld. CIT can cancel the order of the AO and require the concerned AO to pass a fresh order in accordance with the law after holding a detailed enquiry. But when the enquiry in fact has been conducted and the AO has reached a particular conclusion, though reference to such enquiries has not been made in the order of assessment, but the same ..... 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