TMI Blog2022 (6) TMI 684X X X X Extracts X X X X X X X X Extracts X X X X ..... ate of transfer of the property. Admittedly, the BU permission is issued by the local authority which evidences that the construction of the building is within the parameters laid down by the government agencies and therefore the same can be used for the object for which it was constructed. To our understanding, the BU permission appears to be of significant document which is necessary to reach to the conclusion that the construction of the building has been completed in all respects. Thus, we deemed it fit to hold that the AO has taken one of the possible view which cannot be termed as erroneous insofar prejudicial to the interest of revenue in the manner as provided under section 263 of the Act. We hold that there is no error in the assessment framed by the AO under section 143(3) causing prejudice to the interest of revenue. Thus, the revision order passed by the learned PCIT is not sustainable and therefore we quashed the same. Hence the ground of appeal of the assessee is allowed. - ITA Nos. 318/AHD/2018 , ITA Nos 670/AHD/2019 - - - Dated:- 31-5-2022 - SHRI WASEEM AHMED, ACCOUNTANT MEMBER And Ms. MADHUMITA ROY, JUDICIAL MEMBER Assessee by : Shri Deepak R. Shah, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idden even after being discharged from the hospital. Thereafter Mr. Navalkishor too suffered from Neurological disorder in April 2017. Owing to his mother's and his illness, he had to completely abstain from all his office work. Moreover, on 22-11-2017 he suffered from a major Neurological disfunction due to which he lost vision in one of his eyes. His mother suffered from severe lung infection in December, 2017 and as a result of which she expired on 03-01-2018. Thereafter Mr. Navalkishor was occupied in the last rituals and chautha. Hence the resultant delay occurred in filing the appeal. A copy of the relevant doctor's certificates of Mr. Navalkishor Tibrewala and his mother including her death certificate are annexed hereto. 3. Therefore in the interest of justice and subject to satisfaction of the Hon'ble Bench, the aforesaid delay may be condoned. 3.1. The learned AR in view of the above submitted that there was sufficient cause which prevented the assessee from filing the appeal in time and therefore the delay deserves to be condoned. 3.2. On the other hand, the learned DR submitted that there is inordinate delay in filing the appeal by the assessee a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n and explain the delay for such period for the purpose of linking up the circumstances which had caused the delay during the period of limitation and thereafter. (p. 192) 5. Recently, the Allahabad High Court in Ganga Sahai Ram Swarup v. ITAT [2004] 271 ITR 512 has taken the view that liberal view ought to have been taken by the authority as the delay was only of a very short period and the appellant was not going to gain anything from it. 6. Applying the ratio laid down by the Apex Court as well as various High Courts, we find, it is stated in the petition filed by the assessee for condonation of delay that the order copy was misplaced and thereafter it was found and sent to counsel for preparing the appeal and then, the appeal was prepared and filed before the Tribunal and in that process, the delay of 38 days occurred. As held by the Apex Court, no hard and fast rule can be laid down in the matter of condonation of delay and the Courts should adopt a pragmatic approach and the Courts should exercise their discretion on the facts of each case keeping in mind that in construing the expression sufficient cause the principle of advancing substantial justice is of prime ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cessive or inordinate when there was reasonable cause which prevented the assessee in filing the appeal. As such we need to consider the cause for the delay and not the length of the delay. Accordingly in our considered view when there was a reasonable cause, the period of delay may not be relevant factor. We find support from the judgment of the Hon'ble Madras High Court in the case of CIT v. K.S.P. Shanmugavel Nadai and Ors reported in 153 ITR 596 wherein it was held as under: Since in this case the assessee had been prosecuting other remedies, the time taken by those proceedings should naturally be taken while determining the question whether the assessee had sufficient cause for not presenting the appeal in time. Therefore, the revenue was not right in submitting that the appeal filed under section 17 was an appeal against the original order of assessment under the Act, which was passed about 20 years ago, as it was evident that the appeal was against an order of rejection of relief by the assessing authority. Thus, though the Tribunal's view that there was no question of limitation in such cases, was not correct yet the AAC was right in condoning the delay and ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er section 54 of the Act is available if a new house is constructed within a period of 3 years after the date of the transfer of the property. However in the case on hand, the new house was constructed on or before 4th March 2011, a date much before the transfer of the property in dispute i.e. 27-05-2011. Accordingly, the PCIT was of the view that the assessee is not eligible for exemption/deduction under section 54 of the Act against the sale of the property dated 27th of May 2011. However, the AO without carrying out the necessary verification on this aspect has allowed the claim of the assessee in the assessment framed under section 143(3) of the Act. Thus, the assessment order was held by the learned PCIT under section 263 of the Act as erroneous insofar prejudicial to the interest of revenue. 7. Being aggrieved by the order of the learned PCIT, the assessee is in appeal before us. 8. The learned AR before us contended that all the necessary details about the sale of properties and the deduction/exemption claimed under section 54 of the Act were duly furnished to the AO at the time of assessment. Therefore, the assessment order cannot be held as erroneous insofar prejudic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Officer in the assessment order is not required to give detailed reason in respect of each and every item of deduction, etc. Therefore, one has to see from the record as to whether there was application of mind before a lowing the expenditure in question as revenue expenditure. Learned counsel for the assessee is right in his submission that one has to keep in mind the distinction between lack of inquiry and inadequate inquiry . If there was any inquiry, even inadequate, that would not by itself, give occasion to the Commissioner to pass orders under section 263 of the Act, merely because he has different opinion in the matter. It is only in cases of lack of inquiry , that such a course of action would be open. --- From the aforesaid definitions it is clear that an order cannot be termed as erroneous unless it is not in accordance with law. If an Income-tax Officer acting in accordance with law makes a certain assessment, the same cannot be branded as erroneous by the Commissioner simply because, according to him, the order should have been written more elaborately. This section does not visualise a case of substitution of the judgment of the Commissioner for that of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roving enquiries in matters or orders which are already concluded. Such action will be against the well-accepted policy of law that there must be a point of finality in all legal proceedings, that stale issues should not be reactivated beyond a particular stage and that lapse of time must induce repose in and set at rest judicial and quasi-judicial controversies as it must in other spheres of human activity. 10.4. The Mumbai ITAT in the case of Sh. Narayan Tatu Rane Vs. ITO, I.T.A. No. 2690/2691/Mum/2016, dt. 06.05.2016 examined the scope of enquiry under Explanation 2(a) to section 263 in the following words:- 20. Further clause (a) of Explanation states that an order shall be deemed to be erroneous, if it has been passed without making enquiries or verification, which should have been made. In our considered view, this provision shall apply, if the order has been passed without making enquiries or verification which a reasonable and prudent officer shall have carried out in such cases, which means that the opinion formed by Ld. Pr. CIT cannot be taken as final one, without scrutinising the nature of enquiry or verification carried out by the AO vis- -vis its reasonablen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ferred to the detailed correspondence between Assessing Officer and the assessee during the course of assessment proceedings to come to a conclusion that the Assessing Officer had carried out detailed inquiries which includes assessee's on-money transactions. It was on account of these findings that the Tribunal was prompted to reverse the order of revision. No question of law arises. Tax Appeal is dismissed 10.6. The Supreme Court in the another recent case of Principal Commissioner of Income-tax-2, Meerut v. Canara Bank Securities Ltd [2020] 114 taxmann.com 545 (SC), dismissed the Revenue's SLP holding that 263 proceedings are invalid when AO had made enquiries and taken a plausible view in law, with the following observations: Having heard learned counsel for the parties and having perused the documents on record, we see no reason to interfere with the view of the Tribunal. The question whether the income should be taxed as business income or as arising from the other source was a debatable issue. The Assessing Officer has taken a plausible view. More importantly, if the Commissioner was of the opinion that on the available facts from record it could be conclus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e being enclosed herewith. Annexure-1 2. The construction of the above referred residential house was completed in AY 2012-13 and Building Use permission was granted on 29/09/2011 by AUDA. A copy of Building Use permission is being enclosed herewith. As the assessee has completed the house within 3 years of the sale of the assets she is entitled to exemption u/s. 54 of the Act. Annexure-2 Hope you will find the above in order. 10.9. From the above it is revealed, it is not the case that the AO has not made enquiry. Indeed, the Pr. CIT initiated proceedings under section 263 of the Act on the ground that the AO has not made enquiries or verification which should have been made in respect of exemption claimed under section 54 of the Act. It is not the case of the Pr. CIT that the Ld. AO did not apply his mind to the issue on hand or he had omitted to make enquiries altogether. In the instant set of facts, the Ld. AO had made enquiries and after consideration of material placed on record accepted the genuineness of the claim of the assessee. We thus find no error in the order of Ld. AO so as to justify the initiation of 263 proceedings by the Ld. Pr. CIT. asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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