The Tax Publishers2023 TaxPub(DT) 3925 (Del-HC)

INCOME TAX ACT, 1961

Section 263

Where PCIT invoked provisions of section 263 and issued a show-cause notice to assessee with regard to sale of a land; considering the fact that it was not the assessee, who effectuated the sale of said land but it was sold by secured lenders to recover dues owed by the assessee and PCIT failed to notice such underlying details, Tribunal was justified in holding that the powers under section 263, were wrongly exercised by the PCIT.

Revision under section 263 - Erroneous and prejudicial order - Twin conditions not being met -

PCIT invoked provisions of section 263 and issued a show-cause notice to assessee-company with regard to sale of a land. According to the PCIT, the subject land was sold below the value adopted by concerned authority for levy of stamp duty and therefore, assessment made was contrary to provisions of section 50C, as said aspect had not been inquired into by AO. The PCIT set aside the assessment order concluding that the said order was both erroneous and prejudicial to the interest of Revenue. Held: It was not assessee, who effectuated the sale of land but it was sold by secured lenders to recover dues owed by the assessee. However, PCIT failed to notice such underlying facts, while invoking his powers under section 263. Further, for invoking powers under section 263, two conditions have to be met, i.e., not only the order should be erroneous, but it should also be prejudicial to the interest of Revenue. In instant case, the twin conditions were not met. Hence, Tribunal was justified in holding that powers under section 263, were wrongly exercised by PCIT.

REFERRED :

FAVOUR : In assessee's favour

A.Y. : 2014-15



IN THE DELHI HIGH COURT

RAJIV SHAKDHER & GIRISH KATHPALIA, JJ.

Pr. CIT v. H.T.L Ltd.

ITA No. 308/2023

26 May, 2023

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