Case Law Details
Jitendra Patidar Vs Pr. CIT (ITAT Indore)
Conclusion: Provisions of section 263 could be invoked when twin conditions i.e. the assessment order was erroneous and prejudicial to the interest of Revenue were satisfied. Revision under section 263 could not be invoked if assessment order was not prejudicial to the Revenue.
Held: Assessment was completed by AO u/s 143(3) assessing the income at Rs. 2,98,060/-. Subsequently, CIT on going through assessment records found that certain points which were mentioned in the selection of the case for scrutiny under CASS were not taken into consideration by AO while completing assessment u/s 143(3). CIT was of the view that AO passed an order without making required investigation for examination which had resulted the assessment being erroneous in so for as it was also prejudicial to the interest of the revenue. Hence, CIT issued notice u/s 263 calling upon assessee as to why assessment order should not be revised. However, explanation offered by assessee was not found acceptable by CIT, he therefore, held that the assessment order was erroneous in so far as also prejudicial to the interest of the revenue on account of passing of the order without making requisite enquiry/investigation in respect of deduction u/s 54B. He, therefore, set aside the assessment order and directed AO to re examine the issue afresh after causing necessary enquiry/investigation. It was settled position of law that the provisions of section 263 could be invoked when twin conditions i.e. the assessment order was erroneous and prejudicial to the interest of Revenue were satisfied. It was held inthe case of CIT vs Associated Food Products (P) Ltd as reported in 280 ITR 0377 in assessee’s favour regarding availability of deduction u/s 54B where the investment in new asset was made in the name of son of the assessee. Revenue had not brought to notice any contrary judgment by the Hon’ble jurisdictional High Court or Hon’ble Supreme Court as a binding precedence. Therefore, under these facts, it could not be construed that the order passed by AO was prejudicial to the interest of the Revenue. As the assessment order was in accordance with the ratio laid down by the Hon’ble jurisdictional High Court, thus, CIT was not justified in invoking the provision of section 263.
FULL TEXT OF THE ITAT JUDGEMENT
This appeal by the assessee is directed against the order of ld. Pr. Commissioner of Income Tax(in short ‘Ld. Pr. CIT’,-2 Indore dated 29.03.2019 pertaining to assessment year 2015-16.
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