Invocation of section 263 unjustified as all the details furnished during scrutiny assessment

Agrani Buildestate Vs PCIT (ITAT Jaipur)

ITAT Jaipur held that invocation of section 263 of the Income Tax Act unjustified as all the details were furnished by the assessee during scrutiny assessment and assessment was completed after detailed enquiry.

Facts- The assessee firm was engaged in the business of letting out of properties. The firm also rendered various services like provision of security services, lift maintenance, upkeep of properties and cleaning services, etc.

The case of the assessee was selected for scrutiny. AO being convinced passed the assessment order. Thereafter, the PCIT issued notice u/s. 263 of Income Tax Act and alleging that the income of the assessee is not covered by the Circular No.16/2017 dated 25.04.2017. Therefore, the rental income of the assessee was required to be taxed under the head ‘Income from House Property’.

Conclusion- In the present case, the case of the assessee was selected for scrutiny for specific purpose for verification of refund claim and income from house property and, therefore, there cannot be any presumption of lack of enquiry more particularly when the detailed questionnaire was issued by the AO during the assessment proceedings and in this regard the assessee had also furnished all the details alongwith decision of Chennai Properties & Investments Ltd. vs CIT. Therefore, it cannot be presumed that there was lack of enquiry on the part of the AO.

Please become a Premium member. If you are already a Premium member, login here to access the full content.