Johar Hasan Zojwalla Vs PCIT (ITAT Mumbai)
Income Tax Appellate Tribunal (ITAT) Mumbai has allowed the appeal of taxpayer Johar Hasan Zojwalla, setting aside a revisionary order issued by the Principal Commissioner of Income Tax (PCIT), Thane – 1. The ITAT’s decision hinged on a critical factual error by the PCIT regarding the relevant assessment year for a property transaction, thereby invalidating the assumption of jurisdiction under Section 263 of the Income Tax Act, 1961.
Johar Hasan Zojwalla, who operates a real estate business under M/s. Sab Realty, had filed his return of income for Assessment Year (AY) 2021-22, declaring a total income of Rs. 4,20,31,010/-. The Assessing Officer (AO) completed the scrutiny assessment on December 26, 2022, making an addition of Rs. 6,03,81,465/- by disallowing a deduction claimed under Section 80IBA of the Act.
Subsequently, the PCIT initiated proceedings under Section 263 of the Act, issuing a show cause notice on March 6, 2025. The PCIT contended that the AO’s assessment order was erroneous and prejudicial to the interest of the revenue, specifically by failing to examine the applicability of Section 56(2)(x)(b)(B) or Section 50C of the Act to the assessee’s purchase of a flat at Planet Godrej, Mahalaxmi (E), Mumbai. The PCIT’s order, dated March 27, 2025, sought to set aside the AO’s assessment and direct a fresh examination of this transaction.
