INCOME TAX ACT, 1961

Section 263

Revision under section 263 - Erroneous and prejudicial order - -

Assessee entered into an agreement for sale of agriculture land during assessment year 2006-07. However, the sale deed in respect of such transaction was executed during subject assessment year 2011-12. Accordingly, AO framed assessment under section 143(3) accepting transfer of agriculture land in assessment year 2006-07 and did not tax capital gain in subject assessment year. Therefore, an action under section 263 was taken by CIT who set aside the said assessment order. In pursuance of order passed under 263, AO passed assessment order wherein he alleged that neither the impugned land was exempt from taxation as it did not qualify to be agricultural land nor the transfer of the same was executed in assessment year 2006-07 as claimed by the assessee. Dissatisfied with the order passed under section 263, the assessee filed an appeal before Tribunal wherein the Tribunal vacated the order of CIT passed under section 263. Held: Since jurisdiction in AO for passing order on issue of assessability of capital gain on sale of impugned land was being infused by the order of CIT passed under section 263 and as the said order of CIT was set aside by Tribunal, then there was no issue remained to be inquired at the end of the AO. Hence, the fresh assessment order passed under section 143(3) read with section 263 would not be sustainable.

REFERRED :

FAVOUR : In assessee's favour

A.Y. : 2011-12

INCOME TAX ACT, 1961

Section 143(3)

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