ACIT, CHENNAI vs. PRADEEP SELVAM, CHENNAI

There was a delay of 36 days in filing this appeal by the Revenue. The Revenue has filed a petition for condonation of delay. We have heard the Ld. representative for the assessee and the Ld. Departmental Representative. We find that there was sufficient cause for not filing the appeal before the stipulated time. Therefore, we condone the delay and admit the appeal.

Shri Sasikumar, the Ld. Departmental Representative submitted that the CIT(Appeals) prima facie found that the assessee is eligible for deduction U/s.54F of the Income Tax Act, 1961 (in short ‘the Act’). However without deciding the issue by himself he found that that the assessee has filed certain material evidence which was not filed before the Assessing Officer, therefore he directed the AO to examine the same afresh and grant deduction U/s.54F of the Act. Referring to Section 251(1) of the Act, the Ld. DR submitted that the CIT(Appeals) has no power to set aside the order of assessment. At the best, the CIT(Appeals) may confirm the order of the AO or reduce or enhance or annul the assessment. In this case, the CIT(Appeals) exceeded his jurisdiction in setting aside the order of assessment.

Referring to Rule 46A of Income Tax Rules, 1961, the Ld. DR submitted that the assessee has filed new material evidence to him. He ought to have given an opportunity to the AO to examine the same with regard to contents of subject material evidence. In this case, no such opportunity was also given to the AO. Therefore there is a clear violation of Rule 46A of the Income Tax Rules.

On the contrary, Shri Sridhar, the Ld. representative for the assessee submitted that the assessee has filed certain fresh material to support the claim of deduction U/s.54F of the Act. Therefore the CIT(Appeals) found that the assessee is eligible for deduction U/s.54F of the Act. However since the evidence filed by the assessee is not available before the AO, he directed the AO to verify the material evidence filed by the assessee and grant deduction U/s.54F of the Act.

We have considered the rival submissions on either side and perused the material available on record. The assessee claimed deduction U/s.54F of the Act which was denied by the AO. On appeal by the assessee, the CIT(Appeals) on the basis of fresh material filed before him, found that the assessee is eligible for deduction U/s.54F of the Act.

In the result, the appeal of the Revenue is allowed for statistical purpose. Order pronounced on 31st May, 2017 at Chennai.