ADESHJEET PAL KAUR,MOHALI vs. THE PRINCIPAL COMMISSIONER OF INCOME TAX, CHANDIGARH-1, CHANDIGARH

ITA 676/CHANDI/2025Status: DisposedITAT Chandigarh11 March 2026AY 2018-195 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the Pr. CIT was not justified in invoking revisionary jurisdiction under Section 263. The Tribunal found that while the formal allotment of the plot was on October 23, 2015, the initial booking amount was paid on January 6, 2011, and substantial payments were made before March 2015. The Tribunal opined that the allotment was merely an improvement of an existing right, and the right/interest in the plot was created well before the allotment date, relating back to the initial booking. The definition of capital asset under Section 2(14) is wide enough to include rights vested in the assessee to acquire property at the time of initial payment. The Tribunal noted that the assessee had furnished all supporting documents and computations, and the AO had raised a specific query which was duly responded to. The AO accepted the assessee's claim with due application of mind, and the view taken by the AO was one of the possible views and not perverse. The Tribunal relied on the Delhi High Court's decision in ITO vs. DG Housing Projects Ltd. (343 ITR 329), which distinguished between a lack of inquiry and inadequate inquiry, stating that even in cases of inadequate inquiry, the CIT is not entitled to revise if the AO has conducted an inquiry and arrived at a possible view. The original assessment order passed by the AO was restored.

What were the facts?

The assessee, Ms. Adeshjeet Pal Kaur, is challenging an order passed by the Principal Commissioner of Income Tax (Pr. CIT), Chandigarh, invoking revisionary jurisdiction under Section 263 of the Income Tax Act, 1961. The assessment year in question is 2018-19. The original assessment order, passed by the Assessing Officer (AO) on March 14, 2023, under Section 147 read with Section 144B, accepted the assessee's returned income. The case was reopened because the assessee, a housewife, had sold an immovable property for Rs. 75.75 Lacs and had not filed a return of income. The AO had issued notices under Section 148 and Section 142(1), and the assessee had provided explanations and documents. The AO accepted the assessee's claim that the capital gains were long-term, based on the initial payment made on January 6, 2011, despite the formal allotment being on October 23, 2015, and the sale on May 19, 2017.

What were the issues?

1. Whether the Pr. CIT was justified in invoking revisionary jurisdiction under Section 263 of the Income Tax Act, 1961, on the ground that the AO failed to make necessary verification/enquiry regarding the classification of the asset as short-term or long-term capital asset, thereby rendering the assessment order erroneous and prejudicial to the interest of the revenue? Assessee's Contention: The assessee argued that sufficient explanations and documents were furnished during the regular assessment proceedings. The AO had specifically reopened the case to examine the flagged issue and, after due consideration and application of mind, accepted the assessee's claim. The AO's view was one of the possible views and not perverse. Revenue's Contention: The revenue, through the Pr. CIT, contended that the allotment was made on October 23, 2015, and the plot was sold on May 19, 2017. The holding period was less than 24 months, making it a short-term capital asset. The AO failed to make necessary verification/enquiry, making the assessment order erroneous and prejudicial to the revenue.

Which sections of the Income-tax Act were involved?

Section 263,Section 147,Section 144B,Section 148,Section 142(1),Section 2(14)

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Income Tax Appellate Tribunal, “A” BENCH, CHANDIGARH

Before: HONBLE SHRI LALIET KUMAR, JM & HONBLE SHRI MANOJ KUMAR AGGARWAL, AM

Manoj Kumar Aggarwal (Accountant Member)

1.

By way of this appeal, the assessee assails invocation of revisionary juri iction u/s 263 by Ld. Pr. Commissioner of Income Tax, Chandigarh-1 (Pr. CIT) for the Assessment Year (AY) 2018-19 vide impugned order dated 11-03-2025 proposing revision of an assessment as framed by Ld. Assessing Officer [AO] u/s.147 r.w.s. 144B of the Act on 14-03-2023 accepting the returned income of the assessee. 2

2.

The Ld. AR advanced arguments supporting the assessment o

The order continues below.

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