Case Law Details
Kusum Gupta Vs PCIT (ITAT Kolkata)
ITAT Kolkata held that PCIT cannot exercise the revisionary jurisdiction to set aside the assessment where the AO has conducted enquiries and taken a plausible view accepting the contentions of the assessee.
Facts- The only issue raised by the assessee is against the invalid exercise of jurisdiction u/s 263 of the Act by the PCIT thereby passing revisionary order u/s 263 of the Act and setting aside the assessment framed by the AO u/s 143(3) of the Act dated 27.07.2016.
Conclusion- Held that in our opinion, the PCIT cannot exercise the revisionary jurisdiction to set aside the assessment where the AO has conducted enquiries and taken a plausible view accepting the contentions of the assessee.
We also observe from the perusal of the order passed u/s 263 of the Act that the jurisdiction was exercised by the PCIT upon receipt of proposal from the AO to the effect the capital gain has been accepted by the AO and thereafter the ld. PCIT invoked the jurisdiction which is against the ratio laid down by the Hon’ble Jurisdictional High Court in the case of PCIT vs. M/s Sinhotia Metals and Minerals Pvt. Ltd. (supra). On this score also , the jurisdiction of the PCIT is not sustainable. We also note that the PCIT has relied on CBDT’s circular that the AO should have disallowed long term capital gain and has not applied his mind as to how the assessment order is erroneous and prejudicial to the interest of the revenue in order to justify the exercise the revisionary powers u/s 263 of the Act. In our opinion where the PCIT was of the view that AO has not conducted enquiry to came to the conclusion on the issue, then the ld PCIT is duty bound to make an enquiry and reach a conclusion that order is erroneous and prejudicial to the interest of the revenue.
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