Chennai Business Tower Private Limited Vs PCIT-4 (ITAT Chennai)
ITAT Chennai held that revisionary powers exceeded by PCIT since rectification order passed by AO is neither erroneous nor prejudicial to the interest of revenue. Accordingly, order of PCIT u/s. 263 quashed.
Facts- The only issue contested by the assessee through its five grounds of appeal, is regarding the invocation of revisionary jurisdiction u/s.263 of the Act by the PCIT- 4. It is the case of the assessee that the impugned order of the AO passed u/s.154 of Act dated 02.06.2022 does not qualify as an order which is erroneous in so far as it is prejudicial to the interest of Revenue and therefore the assumption of jurisdiction of the ld. PCIT was wrong.
Notably, PCIT- 4 premised that the mistake concerning by allowing the rental income of 3,71,13,608/- as taxable under the ‘Income from House Property’ the AO allowed the assessee extra notional deduction @30% of the rental income u/s.24 of Rs.1,09,28,075/-. Thus, the rectification order was found to be erroneous and prejudicial to the interests of the revenue.
Conclusion- In assessee’s own case for the A.Y. 2009-10 it was held that the impugned order passed u/s 263 dated 28.10.2024 of the Ld. PCIT setting aside the order u/s 154 dated 02.06.2022 is not based upon correct understanding and appreciation of the facts of the case as well as contemporaneous statutory provisions prescribed u/s 263. We therefore quash and set aside the impugned order passed u/s 263 dated 28.10.2024 of the Ld. PCIT and allow all the grounds of appeal raised by the assessee.
