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| The Tax Publishers2020 TaxPub(DT) 0681 (Bom-HC) INCOME TAX ACT, 1961
Section 263
Where Tribunal noticed that CIT had accepted applicability of provision of section 45 and that inquiry was made by AO into disclosures made during the course of the assessment proceedings by assessee, when issue was enquired into by AO, CIT ought not to have invoked jurisdiction under section 263, therefore appeal of Revenue was dismissed.
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Revision under section 263 - Validity - AO failed to verify the applicability of section 45(2) -
Assessee was a builder and sells plots of land on short term as well as on long term basis. During the assessment proceedings, AO inquired into the accounts of assessee and analyzed the various claims made by assessee. By order, assessment proceedings were concluded by determining the total income. However, CIT invoked jurisdiction under section 263, he recorded that AO did not verify the reasons for sale of land at low rates during the assessment year 2011-12 as compared to assessment year 2010-11. AO also failed to verify the applicability of section 45(2). Tribunal took the view that CIT was not justified in invoking jurisdiction under section 263. Held: Tribunal noticed that CIT had accepted applicability of the provision pf section 45 and therefore, it was held that there was no error in the order of the AO. Tribunal further held that inquiry was made by AO into disclosures made during the course of the assessment proceedings by assessee. When the issue was enquired into by AO, CIT ought not to have invoked jurisdiction under section 263. Therefore, appeal of Revenue was dismissed.
REFERRED :
FAVOUR : In assessee's favour
A.Y. :
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