Tejashree Atul Patil Vs PCIT (ITAT Pune)
ITAT Pune Upholds 263 Revision—AO’s Failure to Verify 54F Claim Renders Order Erroneous
Assessee, an Individual, did not file ROI for AY 2015-16. During assessment of her husband, it was noticed that assessee had given him ₹1.58 Cr in cash in FY 2014-15. AO reopened assessment u/s 147 & accepted assessee’s explanation that funds came from sale of immovable property. Assessment completed accepting returned income of ₹2.51 lakh.
On review, PCIT found AO had failed to verify conditions of deduction u/s 54F claimed by assessee. Show cause was issued pointing out that Assessee had claimed exemption on two residential properties, violating s.54F(1) & part of sale proceeds were parked in an FD instead of Capital Gain Account Scheme, violating s.54F(4). PCIT held AO failed to make necessary enquiries & passed an erroneous, prejudicial order. PCIT set aside assessment for fresh enquiry.
Assessee argued PCIT exceeded jurisdiction by raising issues not covered in reasons for reopening. Cited various HC & ITAT decisions to contend 263 jurisdiction cannot extend beyond scope of reassessment.
Tribunal observed that reasons recorded for reopening were about cash of ₹1.58 Cr given to husband without filing return. Since source was explained as sale of immovable property, AO was duty-bound to examine capital gains & related claims u/s 54F. Therefore, PCIT’s issues (s.54F compliance) were directly connected to reassessment proceedings. AO failed to enquire & hence order is erroneous & prejudicial. Tribunal upheld PCIT’s order u/s 263.
