HIMASAGAR KRISHNA MUTHAPPAGARI,TIRUPATI vs. ITO., WARD-2(3), TIRUPATI

Facts

The assessee filed an appeal against the Principal Commissioner's (Pr. CIT) order revising the assessment order. The Pr. CIT had invoked Section 263, stating that the Assessing Officer (AO) failed to properly verify the assessee's claim for exemption under Section 54F of the Act during reassessment proceedings.

Held

The Tribunal held that the AO had indeed failed to conduct necessary inquiries and verifications regarding the assessee's claim for exemption under Section 54F. The unregistered 'agreement to purchase' for the property was not sufficient to claim exemption. Therefore, the Pr. CIT's order was justified.

Key Issues

Whether the Pr. CIT was justified in exercising revisionary powers under Section 263 due to the AO's failure to verify the assessee's claim for exemption under Section 54F, and if the unregistered agreement to purchase was sufficient for claiming such exemption.