The Tax Publishers2020 TaxPub(DT) 1161 (Kol-Trib) : (2020) 181 ITD 0089 : (2020) 206 TTJ 0904

INCOME TAX ACT, 1961

Section 263

Since AO rightly allowed benefit of section 54EC to assessee, the CIT was not justified in invoking his jurisdiction under section 263 by observing that there was violation of provisions of section 54EC by the AO and hence, the order passed by the CIT under section 263 was liable to be quashed.

Revision under section 263 - Erroneous and prejudicial order - AO rightly allowed benefit of section 54EC to assessee -

AO completed assessment under section 147/143(3) in case of assessee. Subsequently, CIT observed that the assessee was provided exemption under section 54EC for depositing capital gain arose from sale of properties in Rural Electrification Corporation Ltd. Bond. However, he found that the said investment was made after the limitation date, and hence same was to be disallowed. He further observed that the exemption under section 54EC was allowed twice for a certain amount. Accordingly, he held that it was a case of erroneous assessment in so far as it was prejudicial to the interest of revenue and, therefore, issued a show-cause notice under section 263. Held: It was not in dispute that assessee deposited capital gain amount arising from sale of properties in Rural Electrification Corporation Ltd. Bond and the said investment was made on 30-8-2011. Further, the sale deed was entered into by the assessee on 15-2-2011 and six calendar months from the date of sale deed would complete on 31-8-2011. Therefore, as the assessee made investment under section 54EC on 30-8-2011, it was within the completion of six months. Accordingly, there was no violation of the provisions of section 54EC and the AO rightly allowed the benefit of section 54EC to the assessee. Hence, the impugned order passed by the CIT under section 263 was quashed. It was further noticed that CIT also observed that exemption under section 54EC was allowed twice for a certain amount. In that context it was held that it might be a mistake apparent from record, and therefore, the same could be rectified under section 154 and accordingly, the AO was directed to examine the same.

REFERRED : CIT v. MunnalalShrikishan (1987) 167 ITR 415 (All) : 1987 TaxPub(DT) 1420 (All-HC) Gee Vee Enterprises v. Addl. CIT &Ors. (1975) 99 ITR 375 (Del) : 1975 TaxPub(DT) 0267 (Del-HC)

FAVOUR : In assessee's favour

A.Y. : 2011-12

IN THE ITAT, KOLKATA BENCH

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