Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, “C” BENCH, MUMBAI
This appeal is filed by the assessee against the revision order passed by The Principal Commissioner Of Income Tax – 6, Mumbai (The Learned PCIT) u/s 263 of The Income Tax Act, 1961 (The Act) on 30 March 2022 holding that assessment order passed by The Assistant Commissioner Of Income Tax, Circle 14 (3) (1) Mumbai [ the Ld AO] u/s 143 (3) of the act dated 7/11/2019 is erroneous so far as prejudicial to the interest of revenue.
1. That the order passed by the Hon'ble Principal Commissioner of Income Tax - 6, Mumbai (hereinafter referred to as PCIT") under section 263 of the Income Tax Act 1961 ("the Act") dated 30.03.2022 is bad in law and on facts.
That the action of the Hon'ble PCIT in assuming jurisdiction under section 263 of the Act and holding that the order passed by the Assistant Commissioner of Income Tax, Circle 14(3)(1), Mumbai (hereinafter referred to as "the AO") under section 143(3) dated 07.11.2019 is erroneous in so far as prejudicial to the interest of the revenue, is illegal and without jurisdiction.
3. That on the facts and circumstances of the case, the Hon'ble PCIT has erred in assuming jurisdiction under section 263 of the Act with respect to the issue of charging notional rent on house property under section 23 of the Act without appreciating the fact that such issue was not subject matter of limited scrutiny assessment under section 143(3) of the Act.
3.1 That the Hon'ble PCIT has erred in exercising revisionary powers under section 263 of the Act in spite of the fact known to him that the case of the appellant was selected under "limited scrutiny" consequent to which the order under section 143(3) was passed and 3.2 That the Hon'ble PCIT has erred in travelling beyond the jurisdiction that was vested with the A.0 while framing the assessment without appreciating the law that revisional jurisdiction cannot be exercised for broadening the scope of jurisdiction that was vested with the A.O while framing the assessment.
3.3 That the Hon'ble PCIT has erred in not appreciating the law that that the scope of limited scrutiny can only be enlarged with the prior approval of Administrative Commissioner by the AO and not challenging the powers of the AO by the appellant during the assessment proceedings does not automatically coverts limited scrutiny into complete scrutiny.
3.4 That the Hon'ble PCIT has erred in law in holding that order passed by the Ld. AO is in ignorance of the provisions of the Act.
4. That the Hon'ble PCIT has erred in law in invoking clause (a) of Explanation 2 to section 263 of the Act for passing the revisionary order.
That the Hon'ble PCIT has erred in holding that the provisions of section 23 are attracted in the case of the appellant without appreciating the
6. That the assumption of jurisdiction by the Hon'ble PCIT in the instant case being without satisfaction of pre-requisite twin conditions of the law, Le, Assessment Order being erroneous as well as prejudicial to the interest of revenue, and therefore the same is bad in law and consequently, the impugned order passed in pursuance thereto is liable to be quashed.
The appellant craves leave to add, amend, alter, remove, rescind, forgo or withdraw any of the above grounds of appeal which are without prejudice to one another before or at the time of hearing of the appeal in the interest of natural justice.”
Facts of the case shows that assessee is an individual, director in TPG Capital private limited, earning income from salary, rental income, capital gains on sale of shares and securities and other income. He filed his return of income on 30/7/2017 declaring a total income of ₹ 269,532,970/–.
The case of the assessee was selected for scrutiny for limited purpose Under ‘CASS for limited scrutiny “for verifying the issue pertaining to relief claimed u/s 90/91 of the act, capital gain/ loss u/s 111 A of The Act and dividend income.
On examination of the record by the learned PCIT, he found that that the AO asked the assessee to furnish details of all movable and immovable properties owned by him along with description and address. In response to that assessee has furnished requisite details. Based on those details total seven immovable properties, which included 2 agricultural lands were shown . Based on these details the AO noted that assessee has not offered rental income in respect of three properties. The AO issued show cause notice why these three properties should not be treated as deemed let out properties and income should not be taxed under the head income from house property. The assessee submitted that two properties are under construction and therefore no rent was received. However, there is one more property located at Goa and assessee submitted that it is taken as a holiday home which was used by him and his family members during vacation. The ld AO while finalizing the assessment order did not make any addition with respect to that. Therefore, notice u/s 263 of the act was issued on 3/3/22 to show cause that why the assessment order passed by the learned assessing officer should not be held to be erroneous as it did not add rental income in respect of the holiday home at Goa.
The learned departmental representative vehemently supported revisionary order of the learned PCIT.
In the result order passed u/s 263 of the act by the learned principal Commissioner of income tax, dated 30/3/2022 for assessment year 2017 – 18 is quashed. Appeal of the assessee is allowed.
Order pronounced in the open court on 29.08.2022.