TMI Blog2022 (5) TMI 601X X X X Extracts X X X X X X X X Extracts X X X X ..... s on which the AO is satisfied are not found mentioned in the order, the absence of discussion thereon shall not by itself be an indicator of the fact that the AO has failed to examine the issue. Such an inference cannot be drawn. We have seen the queries raised in the course of the assessment proceedings. We have seen the responses given thereto. No doubt that the assessee is faced with a handicap that the counsel representing before the AO and before the ld. PCIT has passed away in the COVID times, however, the fact which remains to be demonstrated by the Revenue is the error and that too such an error which is prejudicial to the interests of the Revenue. These requirements cannot be said to have been met by the absence of discussion on facts on which the AO was satisfied after having raised the queries and considered the replies. How the assessment orders are to be written cannot be dictated to by the assessee. The remedy at best lies in providing better training, if so deemed fit to the Revenue officers and hence, lies in-house with the Revenue itself. The suspicion that it was possibly not seen by the AO cannot be the backbone of exercising the powers u/s. 263 of the Act. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iry which renders the order illegal, arbitrary and unjustified. 5. That the assessment order having been passed by the Assessing Officer after due application of mind and taking into consideration the various replies and material on record, the action resorted to by the Commissioner of Income Tax is unwarranted and uncalled for. 6. That the order of Commissioner of Income tax is erroneous, arbitrary, opposed to the facts of the case and is unsustainable in law. 2. The hearing in the present case effectively took place on 02.02.2022 on which date the ld. AR and the ld. DR more or less made their complete submissions on facts and law, however, the submissions of the ld. DR were incomplete to the extent that he sought time to verify properly from the record the calculations made available by the ld. AR. Accordingly, time was granted and the appeal was adjourned to 09.02.2022. On the said date, due to medical reasons, the counsel was unable to represent. The appeal stood adjourned accordingly to 23.02.2022 however, on account of the ongoing strike of Electricity Department, there were multiple connectivity issues in the hearing conducted via Webex. Accordingly, the hearin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Late Sh. Arvind Mehta Advocate and the appeal was filed on 20.05.2021. Sd/- Deponent Verification: Verified that the above noted contents of my affidavit are true and correct to the best of my knowledge and belief and nothing has been concealed therein. Dated: 07.06.2021 Sd/- Deponent 3.1. Accordingly, placing heavy reliance on the aggravating circumstances as set out in the aforesaid application and affidavit, it was his prayer that the delay may be condoned. 3.2. The ld. CIT-DR considering the contents of the application and the record posed no objection in case the delay is condoned. 3.3. In the light of the submissions of the parties before the Bench, considering the peculiar circumstances as brought on record which are not in dispute and the position of law as relied upon we deem it appropriate to condone the delay. Satisfied by the explanation offered, the delay is, accordingly, condoned. Ordered accordingly. 4. The ld. AR, accordingly, was directed to address the grievance of the assessee in the appeal filed. On behalf of the assessee, it was submitted at the outset that the assessee does not wish to specifically press ground N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the fact remains that these were made available to the ld. PCIT and the ld. PCIT does not fault any of these details. He does not point out to any error in the claim of the assessee. The supporting claim, it was submitted, is based on facts and evidences and co-related with payments by cheque from the banks to a large extent. The ld. PCIT ignoring the evidences made available merely proceeds to cancel and set aside the validly passed assessment order for consideration afresh without pointing to any error justifying the suspicion. It was his submission that the said action of the ld. PCIT was contrary to the settled legal position as has been variously addressed by the Courts. The power to set aside the assessment order u/s. 263, it was submitted, is vested with the ld. PCIT for a specific purpose. It was his submission that as per law, it was to be exercised with due care and caution pointing out to the error in the order sought to be set aside and the error should be of such magnitude which can be said to be prejudicial to the interests of the Revenue. The Courts have variously held that this power should be exercised clearly pointing out the error, it cannot be exercised whimsica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade large investments in the immovable properties. Please furnish the details of the immovable properties purchased by you in your name or in the name of your family member alongwith source of investment. 5. Please furnish the details of deductions claimed u/s. 54 along with copies of sale/purchase deeds of properties and calculations of LTCG. This information is being called for under section 142(1) of the Income Tax Act, 1961 and should be furnished on 22.12.2016 at 11:45 A.M.. 5.2. Referring to the above queries, it was submitted, that there can be no doubt that the issue was fully examined by the AO. When considered with the construction details made available to the ld. PCIT wherein no fault has been pointed out, it was argued that the exercise of powers is whimsical and arbitrary. 5.3 Reverting to the record, attention was invited to reply of the assessee appended thereto at Paper Book pages 3 to 5. Copy of the return filed alongwith the computation, it was submitted, is at pages 6 to 11. Specific attention was invited to the sale consideration received for plot No. 182/49, Industrial Area, Phase-I wherein the assessee had 50% share, value of which u/s. 50C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Income Tax Act 1961. It is requested to acknowledge the above stated fact and in light of above do the needful in the interest of justice. Regards (On behalf of Mahesh Chugh) Sd/- (Arvind Mehta) AdvocateCounsel 5.5. The reply at page 28-30 of the Paper Book to the Show Cause Notice issued by the ld. PCIT extracted in the impugned order appended at Paper Book page 24-25 was referred to. It was his submission that the reply was more or less as submitted before the AO. It has been made available on behalf of the assessee by Shri Arvind Mehta. Details of the expenses of construction/renovation of House No. 3113 Sector 28D alongwith evidences is available at pages 31 to 45. Linking these with the Index of specific party/nature of work etc. at pages 31, it was his submission that all details were available and most of the payments were made by cheques. Copy of the bank account is appended at pages 32 to 39, Paper Book page 40, it was highlighted is copy of the ledger account of Topsell Agencies from where certain purchases for the material used were made amounting to Rs. 1,33,040/-. Referring to the said page, it was submitted that it clearly mentions the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bent upon the ld. PCIT to point out the errors in the order. Referring to the said decision specifically and the other decisions cited, it was submitted that this power cannot be exercised carelessly and whimsically. 6.2. Attention was also invited to the decision of the Hon'ble Delhi High Court in the case of D.G. Housing Projects Ltd. (supra) for the proposition that the ld. PCIT considering the evidence has to upset the same and When all the evidences are available before the ld. PCIT, he cannot whimsically direct that further enquiries be made. It was argued that the law requires the ld. PCIT to address the evidences and not proceed on suspicions. It was questioned what stops the PCIT from carrying out an enquiry and point out what is wrong in the evidence available. The order, it was submitted, is contrary to law and facts. 6.3. Decision of the Hon'ble Delhi High Court relied upon at Sr. No. 3 in the case of Jyoti Foundation (supra) was cited. It was submitted that even in a case where the ld. PCIT makes out a case that it is possibly a case of inadequate enquiry which in the facts of the present case, it is not so, even then the ld. PCIT for exercising the power ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... field as to what is the exact figure in dispute; he submitted that arguments of the Revenue are concluded; however, time for factual verification was sought. 9. Accordingly, time was granted. 10. On the next date, following submissions were filed on behalf of the Revenue: Feb. 2, 2022 The Hon'ble Members Chandigarh B Bench Chandigarh Sir/madam, Reg, M/s. Mahesh Chugh ITA No. 104/Chd/2021 AY 2015-16 The above case was part heard today {2.2.2022}, and now fixed on 9.2.22, the undersigned would like to furnish capital gains calculations for ready reference. The same is as under: Sr. no. Property ID Sales consideration (Rs) Cost of Acquisition Indexation (Rs.) Capital gains/loss (Rs.) 1 Plot F-264 45,00 000 4864223 (-)364223 2 Plot 182/49 155,00,000 2608917 12891083 3 Shop no. 13-14 96 25 000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Affidavit of late Mr. Mehta. The fact remains that these calculations were always available to the Revenue as these have indisputably been filed before the ld. PCIT and are on record. It is argued that these have not been faulted. The Revenue, it was submitted, may not be allowed to exercise the Revisionary powers casually and whimsically. It was argued that the law requires that error on examining the evidences filed has to be pointed out by the ld. PCIT and this exercise cannot be avoided Such an action is lacking in the present proceedings as no error, let alone an error which is prejudicial to the interests of the Revenue has been pointed out by the ld. PCIT. 13. We have heard the rival submissions and perused the material available on record. It is seen that in the facts of the present case the assessee filed its return on 08.09.2015 declaring income of Rs. 15,09,350/-. In the return filed, claim of deduction u/s. 54F was made. The AO after issuance of notice and raising certain queries considering the reply filed etc. passed the assessment order under question. It is pertinent to note that the assessee was represented before the AO by Shri Arvind Mehta. The said or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00 Rs. 2608917.00 Rs. 2064850.00 Rs. 9537990.00 Term Capital Gain/Loss (-) 364223.00 Rs. 12891083.00 Rs. 7560150.00 Rs. 20087010.00 Amount invested in purchase of house property @ 75% share of the assessee Rs. 21735000.00 Therefore allowable deduction u/s. 54F of the IT Act is calculated as under:- Long Term Capital Gain (2,00,87,010) X amount invested to purchase new asset (2,17,35,000) Net Consideration(2,96,25,000) = 1,47,37,254/- 13.1. The reply of the assessee to the ld. PCIT has also been extracted in the impugned order. For ready reference, same is reproduced hereunder: 2. In response to this notice, Sh. Arvind Mehta, Advocate, who was duly authorized by the assessee appeared and submitted his power of attorney and reply alongwith enclosures on 05.03.2020. The submissions of the assessee are being reproduced as under:- This is in reference to the subject matter cited as above wher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as claimed correct deduction u/s. 5 F(1)(b) of the Income Tax Act, 1961 and deposited the long term capital gains tax as per provision of the Act. It is therefore requested to knowledge the facts stated above and shall not invoke provision of section 263 of the Income Tax Act, 1961 in the interest of Justice and Oblige. (emphasis supplied) 13.2. Considering this, the ld. PCIT passed the following order on facts: 3. The assessee purchased a residential house No. 3113, Sector 28-D, Chandigarh for total consideration of Rs. 2,89,80,000/- in which the share of the assessee (75%) was Rs. 2,17,35,000/-. The assessee had claimed investment of Rs. 1,55,00,000/- in residential property for computing deduction u/s. 54F on the sale of Plot No. 182/49, Indl. Area, Phase-I, Chandigarh. Further investment of Rs. 72,50,000/- was claimed in house property for claiming deduction u/s. 54F from the sale of Bay Shop No. 13-14, Sector 27-D. Chandigarh. Thus the total investment in residential properties have been claimed at Rs. 2,27,50,000/- whereas the actual investment was Rs. 2,17,35,000/-. During the course of hearing the counsel of the assessee was asked to explain the exces ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessment order, we find in the peculiar facts is neither here nor there. The fact remains that these were provided to the ld. PCIT. We do not need to cite any decisions to address the well accepted position that the assessee cannot be faulted on how the assessment orders are written. The writing of assessment orders are exclusively in the hands and the domain of the Revenue and merely because facts on which the AO is satisfied are not found mentioned in the order, the absence of discussion thereon shall not by itself be an indicator of the fact that the AO has failed to examine the issue. Such an inference cannot be drawn. We have seen the queries raised in the course of the assessment proceedings. We have seen the responses given thereto. No doubt that the assessee is faced with a handicap that the counsel representing before the AO and before the ld. PCIT has passed away in the COVID times, however, the fact which remains to be demonstrated by the Revenue is the error and that too such an error which is prejudicial to the interests of the Revenue. These requirements cannot be said to have been met by the absence of discussion on facts on which the AO was satisfied after havin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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