TMI Blog2024 (2) TMI 863X X X X Extracts X X X X X X X X Extracts X X X X ..... ection or instruction issued by the Board under section 119; or (d) the order has not been passed in accordance with any decision which is prejudicial to the assessee, rendered by the jurisdictional High Court or Supreme Court in the case of the assessee or any other person. The above explanation squarely applicable to the facts of the case and hence, we decline to interfere with the order of the ld. PCIT passed u/s. 263. Appeal of the assessee is dismissed. - DR. B. R. R. KUMAR, ACCOUNTANT MEMBER AND SH. YOGESH KUMAR US, JUDICIAL MEMBER For the Assessee : Sh. Nitin Goyal, CA For the Revenue : Sh. Subhra Jyoti Chakraborty, CIT-DR ORDER PER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER: The present appeal has been filed by the assessee against the order of Ld. PCIT-6, New Delhi dated 18.11.2019. 2. Following grounds have been raised by the assessee: 1. That on the facts and circumstances of the case and in law, the Ld. Pr. CIT has erred in initiating the proceedings under section 263 of the Act and that the order passed by the Ld. Pr. CIT is bad in law and uncalled for. 2. That the Ld. PR. CIT has erred in passing the order without giving due op ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yment was not made by M/s VTS IT Solutions LLP, as cheque for an amount of Rs. 1,45,00,000/- was not honoured by bank. Accordingly the assessee did not show this as transfer of property, and as amount of Rs. 5,05,00,000/- already received by assessee was shown as advance and no capital gain was calculated by them. The AO in his assessment order, failed to appreciate the fact that, in the page 4 of said registered deed it was clearly mentioned and duly acknowledged by both the parties under their signature that - 'the Transferor further transfers all the rights of whatsoever in the nature they may be on the Industrial Property No.D-247/1, Sector-63, NOIDA, Distt. Gautam Budh Nagar-U.P. in favour of the Transferee. The aforesaid Transferee, their heirs, executors and assigns shall be entitled to hold the said plot of land for the remaining period of 90 years subject to payment of lease rent hereinafter served. And was further mentioned that - That the Transferor aforesaid has handed over the vacant, actual physical and peaceful possession of the said industrial property to the Transferee on the spot alongwith all documents in original related to the said property. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dering the physical transfer of leasehold property right registered by a sale deed during the year under consideration and consequently by not determining the undisclosed income arising from capital gain of assessee, the scrutiny assessment order apparently has become erroneous in so far as it is prejudicial to the interest of revenue, in terms of explanation 2 of section 263 of the Income Tax Act, 1961, which is reiterated as under : Explanation 2: For the purposes of this section, it is declared that order passed by the Assessing Officer shall be deemed to be erroneous in so as it is prejudicial to the interests of the revenue, if in the opinion of the Principal Commissioner or Commissioner (a) the order is passed without making inquiries or verification which should have been made; (b) the order is passed allowing any relief without inquiring into the claim; (c) the order has not been made in accordance with any order, direction or instruction issued by the Board under section 119: of (d) the order has not been passed in accordance with any decision which is prejudicial to the assessee, rendered by the jurisdictional High Court or Supreme Court in the case of the assessee or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the year 2007-08 should have been adjusted against the same to arrive at the undisclosed capital gain of assessee. In view of the above, it is held that the assessment order passed by the ITO, Ward-16(1), New Delhi, u/s 143(3) of the I T Act, 1961, on 4/5/2017 for the A.Y. 2015-16 is erroneous in so far as it is prejudicial to the interest of the revenue, in terms of explanation 2(a) of section 263 of the Income Tax Act, 1961, owing to the failure of the Assessing Officer to verify the issue related to capital gain arising out of transfer of property by the assessee. Accordingly the AO is directed to make proper verification of the issue, determine the capital gain income generated out of this transaction and to bring the same under tax net, as per the provisions of the i. T. Act. Effect to this order may be given forthwith. 4. The arguments of the ld. AR and the written submissions are as under: 1. Background of the case a. The assessee company has filed its income tax return for AY2015-16 declaring income of Rs 14,000/- b. The return of income picked up for the limited scrutiny through CASS and one of the reasons was sale of property reported in form 26QB ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO informed that the file is with the office of Pr. CIT 3. 04/10/2019 Appellant filed an application for inspection of assessment records and its copy with the Ld. Pr. CIT-6 No revert and no disposal of the application 4. 15/10/2019 Communication for fixing the matter of hearing on 23/10/2019- issued through email. No email received. The order does not contain reference to the email id of the recipient where the notice was sent 5. 18/11/2019 Order u/s. 263 passed. Ex-Parte order passed 2.2 The Ld. Pr. CIT has passed the order u/s 263 without giving proper opportunity of being heard. The alleged notice dated 15/10/2019, was not received by the appellant and Ld. Pr. CIT did not issue any further notice. It may please be appreciated that the as per subsection 2 of section 263 of the Act, the order u/s 263 could have been passed by 31/03/2020 and there is no time barring pressure. Further, the appellant has submitted before La. Pr.CIT that its assessment records a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant has neither claimed TDS nor offered transaction as sale in books of account (Page 23 of PB) Copy of audited financial statements (Page 28 of PB) Affidavit and Indemnity bond (Page 5 to 7 of PB) 3.2 The case was selected for limited scrutiny for verification of sale of capital assets only.(Page 62 of PB) 3.3 Acceptance of claim by the Ld. AO was based on his considered opinion after verification of all the relevant papers. 3.4 What could be termed as erroneous - can be referred from explanation 2 to section 263 of the Act. The Ld. PR. CIT has invoked clause (a) to explanation 2 of the section 263. Explanation 2. For the purposes of this section, it is hereby declared that an order passed by the Assessing Officer shall be deemed to be erroneous in so far as it is prejudicial to the interests of the revenue, if, in the opinion of the Principal Commissioner or Commissioner, (a) the order is passed without making inquiries or verification which should have been made; All the above details/facts/documents were on the file and accordingly the view formed by Ld. PR. CIT that the Ld. AO has passed the order without making in inquiries or verification wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ] is erroneous in so far as it is prejudicial to the interests of the revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, 2[including, (i) an order enhancing or modifying the assessment or cancelling the assessment and directing a fresh assessment; or (ii) an order modifying the order under section 92CA; or (iii) an order cancelling the order under section 92CA and directing a fresh order under the said section]. Explanation 1. For the removal of doubts, it is hereby declared that, for the purposes of this sub-section, (a) an order passed on or before or after the 1st day of June, 1988 by the Assessing Officer 1[or the Transfer Pricing Officer, as the case may be,] shall include (i) an order of assessment made by the Assistant Commissioner or Deputy Commissioner or the Income-tax Officer on the basis of the directions issued by the Joint Commissioner under section 144A; (ii) an order made by the Joint Commissioner in exercise of the powers or in the performance of the functions of an Assessing Offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (3) Notwithstanding anything contained in sub-section (2), an order in revision under this section may be passed at any time in the case of an order which has been passed in consequence of, or to give effect to, any finding or direction contained in an order of the Appellate Tribunal, the High Court or the Supreme Court. Explanation. In computing the period of limitation for the purposes of subsection (2), the time taken in giving an opportunity to the assessee to be reheard under the proviso to section 129 and any period during which any proceeding under this section is stayed by an order or injunction of any court shall be excluded. 7. From the record, we find that the assessee was quite aware of the proceeding before the ld. PCIT with reference to the dates 27.09.2019 and also 23.10.2019. The explanation(2) to section 263 provides that an order passed by the Assessing Officer shall be deemed to be erroneous in so far as it is prejudicial to the interests of the revenue, if, in the opinion of the Principal Chief Commissioner , (a) the order is passed without making inquiries or verification which should have been made; (b) the order is passed allowing any relief w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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