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Income Tax Appellate Tribunal, “B” BENCH: KOLKATA
Before: Shri Rajpal Yadav, Vice-(KZ) & Shri Rajesh Kumar]
Per Shri Rajesh Kumar, AM:
This is the appeal preferred by the assessee against the order of the Principal Commissioner of Income Tax-Burdwan [hereinafter referred to as ‘Ld. PCIT’] passed u/s 263 of the Income Tax Act, 1961 (hereinafter referred to as the Act)dated 13.03.2020 for the assessment year 2015-16.
Though the Registry has pointed out that the appeal is time barred by 747 days, however, in view of the decision of Hon’ble Supreme Court in Miscellaneous Application No. 665 of 2021 in SMW(C ) No. 3 of 2020, the period of filing appeal during the COVID-19 pandemic is to be excluded for the purpose of counting the Jagabandhu Das limitation period. In view of this, the appeal is treated as filed within the limitation period.
Issue raised in ground no. 1 is qua the prayer for condonation of delay in filing the appeal which has been dealt with and decided by us in para 2 supra wherein we have condoned the delay by following the decision of Hon’ble Supreme Court (supra) in the miscellaneous application as mentioned above and therefore this ground has been allowed in para 2.
Issue raised in ground nos. 2 to 4 is against the order of ld. PCIT passed u/s 263 of the Act being bad in law and also on the facts on record whereas the issue in ground no. 5 is legal issue challenging the jurisdiction of the Ld. PCIT on the ground that the issue on which the Ld. PCIT exercised revisionary jurisdiction u/s 263 is already sub-judice before the Ld. CIT(A) in appeal filed by the assessee against the assessment order of AO dated 7.12.2017 passed u/s 143(3) of the Act.
Facts in brief are that the case of the assessee was selected under CASS for limited scrutiny and statutory notices were duly issued and served upon the assessee. The assessee derived income during the year from profession of para teacher with the WB State Govt. During the year the assessee was doing sales and purchase of lands and thus dealing in real estate activities. According to AO, the assessee has neither shown any capital gain income from the said land nor claimed any exemption u/s 54B/54D/54G of the Act. The AO, in order to verify the transactions, issued notice u/s 133(6) of the Act to State Bank of India and United Bank of India which were duly replied by these banks. Besides the assessee has submitted that the details of agricultural lands sold and purchased during the year with further explanation qua the capital gain accrued from the sale of agricultural land was invested again in the agricultural land. The details of transactions by the assessee during the year are reproduced as under:
The AO on the basis of above details noted that the assessee has sold three lands during the relevant year out of which two were purchased just six days before and one was purchased just two days before. The AO made addition of net amount of Rs. 7,40,754/- under the head income from business after deducting from the total sale value of three properties which comes to 9,87,912/- the expenses incurred by the assessee on the said sold properties of Rs. 2,47,158/-. The said assessment order order was challenged by the assessee before the Ld. CIT(A).
In the meantime, the Ld. PCIT exercised the jurisdiction in respect of the same properties as appearing on Sl. No. 1, 2 and 3 on the ground that there was an under assessment of income to the tune of Rs. 3,99,000/- which was computed on the basis that the assessee purchased the land in cash exceeding Rs. 20,000/- and thus revised the assessment vide order dated 13.03.2020 passed u/s 263 of the Act.
After hearing the rival contentions and perusing the materials as placed before us , we note that the said assessment order as framed originally u/s 143(3) of the Act dated 07.12.2017 has been challenged by the assessee before the First Appellate Authority and appeal is pending for adjudication. In the light of these facts, we are unable to understand as to how the jurisdiction of the Ld. PCIT u/s 263 of the Act is Jagabandhu Das maintainable on this issue. The provisions of clause (c) of Explanation (1) to Section 263 provides that when the appeal is pending before the Commissioner of Income Tax(Appeals) on some issue, the exercise of jurisdiction u/s 263 of the Act on the said issue is not available to the ld PCIT. In the present case also the ld. Commissioner of Income Tax (appeals) is seized of the issue and therefore jurisdiction u/s 263 of the Act has been invalidly exercised by the Ld. PCIT. The case of the assessee finds support from the several decisions of various High Courts namely Smt. Renuka Philip vs. ITO reported in [2018] 409 ITR 567 (Mad), decision of Hon’ble Allahabad High Court in the case of CIT vs. Vam Resorts and Hotels Pvt. Ltd. [2019] 418 ITR 723 (All). In both the above decisions of the Hon’ble High Courts has held that when the appeal is pending before the Commissioner (appeals), the exercise of jurisdiction u/s 263 of the Act is not available to the Ld. PCIT. Accordingly, we are inclined to quash the order passed u/s 263 of the Act.
In the result, the appeal of the assessee is allowed.
Order is pronounced in the open court on 29th September, 2022