Exotic Realtors and Developers Vs PCIT-1 (ITAT Chandigarh)
The ITAT Chandigarh allowed the assessee’s appeal against the order passed by the Principal Commissioner of Income Tax-1, Chandigarh under Section 263 of the Income Tax Act, 1961 for A.Y. 2018-19. The assessee, a partnership firm engaged in development and construction of residential flats, had filed its return on 27 September 2018 declaring total income of Rs. 2,72,79,780/-. The case was selected for scrutiny under CASS with the reason “Income from Real Estate Business”. Notices under Sections 143(2) and 142(1) were issued, and the assessee furnished the requested information and documents through the e-proceeding portal. The Assessing Officer thereafter accepted the returned income by assessment order dated 12 June 2020 under Section 143(3).
The PCIT subsequently initiated revision proceedings under Section 263 by issuing a show cause notice dated 15 March 2023. The PCIT considered the assessment order to be erroneous and prejudicial to the interests of Revenue under Explanation 2(a) to Section 263, primarily because the assessment order was considered cryptic and silent on various material issues. According to the PCIT, the Assessing Officer had failed to make requisite enquiries and verifications. The PCIT therefore set aside the assessment order and directed the Assessing Officer to conduct requisite enquiries and proper verification, while allowing the assessee an opportunity to furnish relevant facts and submissions.
