Sh. Daljit Singh Bassi, Ranjit Nagar V. Pr.CIT-1, Chandigarh

ITA 56/CHANDI/2021

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 6071 (ITAT-CHANDIGARH)
• Duration Of Justice: 10 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-03-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2015-2016
• Appeal Filed On: 28-04-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 54; 263; 63; 54B; 201; 43; 13; 22; 20

Judgement Text

आयकर अपील य अ धकरण,च डीगढ़ यायपीठ, च डीगढ़ I N T H E I N C O M E T A X A P P E L L A T E T R I B U N A L D I V I S I O N B E N C H , “ A ” , C H A N D I G A R H B E F OR E SH R I N . K . SA I N I , V I C E P R E SI D E N T & S H R I S U D H A N S HU SR I V A S T A V A , J U D I C I A L M E M B E R आयकर अपील सं./ ITA No. 56/C H D / 2 0 2 1 नधा रण वष / Assessment Year : 2 0 1 5 - 1 6 Sh. Daljit Singh Bassi, House No.1178A, Ranjit nagar, Sector 11, Punjab बनाम The PCIT, Chandigarh -1 थायी लेखा सं./PAN NO: AFKPB2971C अपीलाथ /Appellant यथ /Respondent Hearing though video Conferencing नधा रती क ओर से/Assessee by : Sh. Parikshit Aggarwal, CA. राज व क ओर से/ Revenue by : Sh. Vivek Nangia, CIT DR स ु नवाई क तार$ख/Date of Hearing : 27.12.2021 उदघोषणा क तार$ख/Date of Pronouncement : 25.03.2022 आदेश/Order P er S u d h an sh u S ri va s ta va , J u d i c i a l M e mb e r : T hi s a pp ea l is p r e f er r e d by t h e a s se s se e a ga i ns t t he or de r pa s s e d u/ s 2 63 o f t he I n c o me Ta x A c t , 1 9 61 ( he r e i na ft e r c al l e d ' t h e A c t ') v i d e or d e r d a te d 1 2. 0 3. 20 21, w he re in , t he L d. P r i n ci pa l C o m mi s s i o n er o f In c o m e T a x, C ha n di g a r h - 1 [ h er ei na ft er r e fe rr e d t o as ‘ P CI T ’] h a s hel d t ha t t h e a s s e ss me nt or de r da te d 22. 1 1. 20 17 p as s e d u/ s 14 3(3 ) o f t he A c t fo r a s s es s me n t y ea r 20 15 -1 6 w a s e rr on e o us i n so fa r a s b ei ng pr e j u di c ia l t o t he i nt e r es t o f Re v e nu e a s t he r e w a s fa i l u re on t h e p ar t o f ITA No. 56-Chd-2021 Sh. Daljit Singh Bassi, Ranjit Nagar 2 t he A s s e s s in g o ff ic e r(A O ) t o ma ke i n qui ri es / ve r i fi c a t i o n t o a r r i v e a t t he c orr ec t a nd co mpl e t e f ac t s a n d a p p l y c o r r e ct l aw . Th e s a i d a s s es s men t ord er w a s c a n ce l l e d w i t h a d i r ec ti on t o t he A s s es s i ng o f fi ce r t o pa s s an o rd e r a fr e s h. 2. T he b r ie f fa c t s o f th e c a s e a r e t ha t th e as s e s s ee fi le d re t u r n o f i nc o me d e cl ar in g t a xa bl e i n c o me at Rs . 1 , 6 5, 28, 6 2 0/-. The re t u r n w as i ni ti a l l y p ro c e s s ed u/ s 14 3( 1) o f t he A ct a nd s u bs equ e n t l y t h e ca s e w as s e le c te d f or l i mi t e d sc r u t i n y un de r C A S S g ui de l i ne s on t h e i s s ue o f “ D ed uct i o n c la im e d u nd er t he h e ad C api ta l G ai n ” . T he l i mi t ed s c ru t i n y a s s es s men t w as c o m p l et ed vi d e 22 . 1 1. 20 1 7 w h er e i n the r et u r n ed i n c o m e w as a c c e p t ed . S u b se qu en t l y, n ot i ce u/ s 2 63 o f th e A ct w as i s s ue d o n 19 . 2 . 20 20 b y th e L d. P CI T C ha n d i g a rh, c o nt e n t s of wh ic h a r e b e i n g re p r o du c e d he r e i n- un d er f or a re ad y re fe r en ce . “ Pl e as e r e fe r t o t he r e t u r n o f i n c o m e fo r t he A . Y . 201 5- 1 6 f i l ed o n 2 9. 08 . 2 01 5 d e c l a r in g in com e of R s . 1, 65, 28 , 6 2 0/ - a n d t h e as s e s s m en t o r d er u/ s 14 3(3 ) o f t h e IT A c t p as s e d b y t he D y . Co m m i s s io n e r of In c o m e T a x , Ci r c l e 6 (1 ) , M o h al i (t h e as s es s i ng of f ic e r c onc e r ne d i n y o ur c as e ) on 2 2. 1 1. 20 1 7 v i d e wh i c h r e t ur n e d i nc om e o f t h e as s e ss e e was ac ce pt e d. 2. T he c as e was s e l e c te d u n de r C A S S f o r re wi ng i s s ue o f " D e d uc ti o n cl ai m e d u n de r th e h e ad C ap i t a l G ai n. " As p er i nf or m at io n do c um e nt s av ai la b l e o n r e co rd s , i t is s e en t ha t y ou h a v e s ol d ur ba n ag r ic ul tu r e l a nd f or Rs . 13, 0 9, 6 8, 75 0/ - on 14 . 0 8. 2 01 4 an d e a r ne d l o ng T er m C a pi ta l G a i n o f R s . 12, 55, 0 8, 3 50 / -/ - cl ai m i n g de d uc t io n o f R s . ITA No. 56-Chd-2021 Sh. Daljit Singh Bassi, Ranjit Nagar 3 6, 16 , 31, 4 55 /- u / s 54B a nd Rs . 6, 38 , 7 6 , 895 / - u/ s 54 F ag ai ns t L on g T er m Ca p it al G ai n. 3. A s pe r pr o vi s i o ns o f Se c t i on 5 4F o f t h e I T Ac t , If t he c o s t o f t h e n e w h o us e is n ot le s s th an t he ne t c ons i de r a t i o n i n r e s pe ct of t he ca pi ta l as s e t t r ans f e rr e d, t h e en ti r e c a p i t a l ga i n a ri s i ng f r om th e t r ans f e r wi l l be ex em pt f r om t a x . I f t he c os t o f t he ne w h o us e is l e s s t h an t he ne t c o ns id er a ti on i n r e s pec t of t he a s s e r t t r ans f e r r ed , th e ex e m p ti on f rom l on g t e r m c a pi t al g ai n wi l l be g r a nt e d pr o p or t io na t e l y o n t he b as i s of in v e s t m e nt o f ne t c ons i de r a t i o n e i t he r f or p ur pos e or c ons t r u c t i o n of t he r es i de nt i a l h ou s e " . Si nc e t he i n v e s t m en t m a de in r e s id en t i al pr o pe r t y u /s 5 4F i s R s . 6, 41 , 94, 0 00 /- , wh i c h is le s s t h a n t he ne t c o ns i d er a t i o n i n r e s pe ct o f c ap i t al as s et t r an s f e r r ed, t he r e fo r e, pr o p or t i o n at e de d uc t i o n i n t e r m s o f pr o v is i on s o f S ec t i o n 5 4 F o f t he I T A c t, 19 6 1 w a s to b e al l o we d as pe r c al cu la t io n gi v en a s u n de r :- Long Term capital Gain * amount reinvested Ne t c on s i de r a t i on It is f ur th er s ee n t ha t w h il e w o r ki n g out d e d uc t i o n u/ s 54 F , th e e ff e ct o f i n v e s t m e nt of L o ng T e r m Ca p it al G a i n al r e a dy a v a i l e d u /s 5 4 B w as no t g i v e n r e s ul ti ng i n e xc e s s c l a i m u /s 54 F 5. T hus f r om th e ab ov e , it i s s u ff i c i e n t l y cl e ar th a t t he a l l o w abl e de d uc t io n u/ s 5 4F ha s b ee n w r o ng l y wo rk e d ou t an d a l l ow e d r e s ul t i n g i n l os s of r ev e nue. 6. In vi ew o f t h e fa ct s s t at e d a b ov e, t he as s e s sm ent fr a m e d u/ s 1 43 ( 3) o n 2 3. 1 1 . 201 7 f or A . Y . 20 15- 1 6 i s er r on eo us in s o f ar as pr e j ud i c i a l t o t he i nt er e s t of t he r e v en ue i n t e r m s of pr o vi s i o ns of s e ct i on 26 3 ( 1) o f t h e In com e T a x Ac t , 1 9 61 r e a d w i th E xp l a n a t i o n 2 o f th e s ai d s e ct i on. ITA No. 56-Chd-2021 Sh. Daljit Singh Bassi, Ranjit Nagar 4 7. Y ou ar e , th er e f or e, r equ es t e d t o s h o w c aus e a s t o wh y as s e s s m en t f r am e d v i d e a ss e s s m en t o r de r da t e d 2 3 . 1 1. 2 01 7 u / s 1 43( 3) o f t h e I n c om e T ax Ac t , 19 61 f or A . Y . 2015 -1 6 s ho ul d no t b e c a nc e l l ed by i nv ok i n g t h e pr ov i s io ns of s e c ti on 2 63 of : ne I nc ome T ax Ac t , 1 9 61. ” 2. 1 In r e s po ns e t o t he ab ov e s ai d s h ow ca us e n ot i c e, t he as s e s s ee ra i s e d ob j e c t i ons t o t he p ro pos a l o f re v i s io n u/ s 26 3 o f t he A c t a n d s ub m i tt e d b e for e t he L d. P C IT t h a t o n t h e fa c ts o f t he ca s e , no f re s h i nq u i r y w a s re q ui r e d t o be ma d e by t he A s s e s s in g o ff ic e r an d t h at c an ce ll a ti on o f th e en t i r e as s e s s me nt or de r w oul d be u nj us t i f i e d. H ow e ver , t h e L d . P CI T d i d n o t a c c e p t t he c on te nt i on o f t h e as s e s s ee a nd he p ro ce e de d t o ca nc e l t he a s s e s sm e n t w i t h di r e c t i on t o t he A s s e s s i ng o f fi c e r to pa s s a fr es h as s e s s me n t or de r a ft er i n qui ri n g i n t o t he c or r e c t n es s o f t h e a s s ess e e ’s cl a i m o f p ur c h a s e o f a gr i c ul tu r a l l an d a nd de p os i t o f ba l an ce i n c a p i t a l g a i n a cc o u nt s c h e me . 2. 2 A ga in s t t h i s o rd e r o f t he L d. P C IT, t h e a s s es s ee ha s now a pp r o ac he d t h is T ri bu na l c h a l l e ng i n g t he e xe rc is e of r e v i s io n a r y p ow e rs by t he L d. P CIT u / s 263 o f t he A ct b y r ai s i n g t h e fo l l ow i n g g ro u n ds o f a pp e a l : - 1. T hat o n l a w, fa ct s & ci r c um s t a nc es of th e c as e , t h e Wo r th y Pr . CIT ha s g r o s s ly er r e d as s um i ng j ur i s d i c t i on u /s 26 3 ev e n w h e n: ITA No. 56-Chd-2021 Sh. Daljit Singh Bassi, Ranjit Nagar 5 1. 1. T he o r ig in a l as s e s s m e nt or de r pa s s ed u/ s 14 3(3 ) di d no t s a t i s fy t he t wi n c o nd it i ons of b e i ng an ' e r r one ous or d e r ' and 'p re j u di c ia l to t he i nt e r es t of r ev e nu e '. 1. 2. T he Wo r th y Pr . CI T has e rr e d i n se t ti ng a s i de t he a s s es s m en t o rd er u/ s 143 (3 ) a n d i n di r ec t i ng t he A O t o m a k e as s es sm e nt a fr e s h o n t he g r ou nd t ha t A O had n ot c on du c t ed wor t hw h i l e e n q ui r i es d ur i ng t he as s e s s m en t pr o c ee di ng e v e n w he n t h e AO h a d c on du ct e d t h or o u g h e n q ui r ie s a n d a ls o m os t i m por t a nt l y t h e P r . C IT fa il e d t o c ar r y our a ny e nq ui r y h i m s e l f a n d al s o f ai l e d t o de m o ns t r at e wh i c h m os t ne ce s s ar y e nq ui r y t h e L d . A O f a il e d t o c ar r y o ut . 1. 3. T he Wor t h y Pr . CI T fa il e d t o ap p r ec i at e t h at i na d e qu at e i n qu ir y doe s no t a m o u nt t o l ac k of i nq u ir y s o as t o as sum e v al i d j u r is d ic t i o n u/ s 2 6 3. 1. 4. T he Wor t hy P r . C IT , v i de P ar a 7 . 1 o f h e r or d er , has er r e d in h o l d i n g t ha t t h e as s e s s m e nt or d er r e qu i r e s t o be r e vi s e d u/ s 2 6 3 s i n c e t he G i rd aw ar i o f a gr i c ul tu r a l l an d f u r n i s he d by t h e as s e s s ee wa s no t s i gn e d/ s t am pe d b y t he c om pe t e nt au t h or i t y a n d i t w a s ne v e r s u bj e c te d t o v er i f i c a t i on e ve n wh e n t he fa ct s ar e o th er w i s e . 1. 5. T he Wor t hy Pr . CI T has e r r ed in ho l di n g t he as s e s sm ent or de r to b e e r r one o us an d p r ej u di c i a l t o t he i n t e re s t o f r e v e n ue v i de h er o b s e r va ti on s i n P ar as 8 t o 1 1, e ve n whe n s he he r s el f a dm i tt e d i n the / i m p ug ne d o r d er t h at t h o s e is s u es pe r ta in t o s ub se qu en t y e a rs . 1. 6. T he Wor t h y P r. C IT h as er r e d i n m ak i ng c er t a i n o bs e r va ti o ns i n P ar as 8 t o 11 o f t h e i m pu gn e d or de r e v en w he n su ch i s s u e s pe r ta i n t o s ub se qu en t y e ar s an d t h er e f o r e s h e h as e xc ee d e d he r j u r is d ic t i o n i n no t i n g s uc h o bs e r v at io n s i n t he r e vi s i o nar y or de r u/ s 2 6 3 f or th e y e ar i n qu es t i o n ITA No. 56-Chd-2021 Sh. Daljit Singh Bassi, Ranjit Nagar 6 an d h e n c e s u c h ob s er v at i o ns de s e rv e s t o be e xp un ge d. 1. 7. T he W or th y P r. CIT h as c o nd u ct e d t he i m pu gn e d pr o c e ed i ng s u/ s 2 63 i n e x tr e m e has t e a n d wi t ho ut af f or d i n g r e as on a bl e op p or t uni t y o f be i n g he ar d t o t h e a p pe l l a nt . 2. T hat t h e ap p e l l a nt c ra v e s l e a v e f or a ny ad di t i o n, de l et i on or am e ndm e nt i n t he gr o u n ds of ap pea l o n or be fo re t he d is p os al of t he s am e. 3. 0 T he L d . A ut h or i s e d Re pr es e nt at i ve (A R) s u b m i t t ed t ha t t he a s s es s e e i s an i nd i vi d u a l w h o, a l o ng w i t h hi s s on Sh ri P r in c e p re e t J i t S i ng h B a s s i, w as c o-ow i ng c e r t a i n a gr ic u l t ur a l l a nd an d t he y h a d ag re e d t o s e l l t h is l an d to M / s G i l c o D e ve lo per s an d B u i l der s P vt L t d i n t h e ye a r 20 13, w he r e i n , a n a re a o f 40 k an al s 6 ma r l a s an d 6 S ar s ai w a s t o be s ol d. It w a s fur t he r s ub mi t t e d t h at t h e c ap it a l ga i ns ea rn ed a n d e xe mp t i on c l a i m e d by t h e a s s es s e e w e r e fa l l in g i n t w o as s e s s me n t ye a rs i . e. 2 01 5- 16 & 20 1 6-1 7 a nd th e A s s e ss in g o f fi ce r, du ri ng th e c o u rs e o f a s s es s men t pr o c e e d in gs , h ad re qu i r e d t he a s s es s e e to e x p l ai n a n d j us t i fy t he a s s es s e e ’s cl a i m o f e x e m p t i on u /s 54 o f t he A c t a nd t he as s e s s ee h as du l y r e sp o nd e d b y fi l i n g t h e re l e va n t de ta i ls a l o ngw i t h doc u m en t a r y e vi de n c e s i n s up po rt o f a c c ru al o f ca pi t al g ai n as w el l a s i n s u ppo r t o f t he a s s es s e e’ s c la i m o f ex e mp t i o n u/ s 5 4 o f t he A c t. It w as al s o s ub m i tt e d t h a t t he A ss es s i ng o f fi c e r ha d, t hus , ma de a de q u a t e a n d pr o pe r i n qu i r i e s du ri n g t he c ou r se o f a s se s s men t pro c e e d in gs an d h a d pa s s ed th e a s s e ss m e nt o rde r a ft e r d u e c o ns i d e ra ti on o f t he fa c ts o f t he ITA No. 56-Chd-2021 Sh. Daljit Singh Bassi, Ranjit Nagar 7 c as e a s w el l a s a ft e r d ul y co ns id er i n g t he s ub m is s io ns o f t he a s s e s se e i n t hi s r e g a r d a n d, t he re for e, it w a s w ro n g o n t he p a rt o f t h e L d. P CIT t o a ll e g e t h a t n o pr op e r i n qu i r y ha d be e n ma d e b y t h e A s ses s i ng o ffi c er . H e dre w ou r a t te n t io n t o th e v o l u mi no u s doc u m en ts fi le d d ur i n g t h e c ou r se o f a s s es s me n t p roc e e d i ng s , co pi es o f w h i c h ha ve be e n pl a ce d i n t he p a p e r b oo k fi l ed b y t he a s s es s e e . O ur at t e n ti on w a s s pe c i fi c a l l y dr aw n t o t h e pu r c h a s e d e e ds , c op i es o f K h as ra a n d G ir d aw a ri , c op y o f c er ti fi c at e o f P a tw a ri a nd s al e de e d s a nd it w a s s ub mi t te d th a t t he s e do c u m e n ts w e re v e ry m uc h be f o re t h e A s s ess i ng o f fi ce r du ri ng t h e c ou r se o f a s s es s m en t p ro c ee di ng s an d t ha t t he A s s e ss ing o ff i ce r h ad t ak en t h e v ie w o f a c c e p t i n g t he r e t u rn ed i nc o me a ft e r du e c o ns i d e r a t i o n o f t he s e d oc u me nt s . H e al s o dr ew o ur a t t e nt i o n t he qu e r y l et t er ra is e d by t he A s s e s s in g o ff i c er d u ri ng t he co u rs e o f a s s e s sme nt p r o c e e d i n gs w he re in t h e A s s e ssi ng o ff ic e r h a d s pe c i f ic al l y r e quir ed t he a s s es s e e t o fu r ni s h d e t a i ls o f l a rg e de du c t i o n c l a i me d u/ s 54B, 5 4C, 5 4D , 5 4 G a nd 54 G A of t he A ct . 3. 1 It w a s fur t h e r s u b mi t te d t ha t , t he r e fo re , t h e all e g a t i o n o f t he Ld . P CIT t h at t h er e w a s a fa i lu re o n th e p a rt o f t h e A ss e s s i ng o ff i c e r t o ha v e c on du ct e d / m a de i nq ui ri e s / v e ri f ic a t i o n t o a r ri ve a t t he c or r ec t a n d c o mp l e t e fa ct s w a s no t t r u e . It w a s s ub mi t t e d th a t t he A s s e ss i ng o f fi c e r ha d a l r e a d y i n qui re d i n t o a nd ve r i fi e d t he as s e s s ee’s c l a i m o f p ur c h a s e o f a g ri c ul tu ra l l a n d a nd d e p os i t o f ba l an ce a mo unt i n ca pi t al g ai n a cc ou n t s c he m e a nd, t h er e f or e , c a n ce l li ng t h e a s s e ss me nt f o r t h e ITA No. 56-Chd-2021 Sh. Daljit Singh Bassi, Ranjit Nagar 8 pu r pos e o f p a s s in g a n or d e r a fr e s h on t h e i s s ue w as n ot as p er t h e m a nd a t e g iv en t o t h e Ld. P CI T i n te r ms of s e c t i o n 26 3 o f t he A c t . 3. 2. T he L d . A R pl a c e d re l i a nc e o n t h e nu m er ous ju dic i a l p re c ed e n t s i n s up p ort o f h i s c on t en t i o n th at t he or d er p a ss e d u /s 2 6 3 w a s ba d i n l a w a nd d e s e r ve d t o be q ua sh ed . 4. 0 P e r c on tr a, t he Ld. CI T D R ve h e m e n t l y s upp ort e d t he o rd e r o f t he L d. P CI T a nd a rg ue d t h a t t he r e h ave b e en m a ny l a ps es o n th e p a r t o f t he A s s es s i ng o f fi ce r t o co n d uc t p r o pe r i nq ui r i e s i nt o th e n a t u re o f l a n ds s ol d a n d pu rc ha s e d . It w as fur t he r s u b mi t t e d t ha t th e L d. P CI T h a d ri g h t l y p o i n t ed o u t th a t t he A s s es s i ng o ffi c er h a d no t i n q ui r e d i n t o t h e ge n ui ne ne s s o f t he i nv e s t m e n t ma d e b y t h e a s se s s e e in t e r ms o f s e c t i o n 54 o f t he A ct . It w a s s ub mi t t e d t h a t t he a s s es s e e ’s c l a i m o f i nve s t m e n t i n r es i d e n t i a l h o us e ha d n ot be en e x a mi ne d p ro pe rly b y t h e A s s es s i ng o f fi c e r an d t h e A s s e s s in g o ffi c er h a d ac c ep t e d t he as s e s s ee ’s co nt e nt i o n i n a v e r y c a s ua l m an n e r. I t w a s re it e r a t e d t ha t the A ss e s s i ng o f fi c e r ha d a c c e p t e d t he a s s es s e e’ s c l a i m w i t h out a ny i n q u ir y or e vi de n c e w h a t - s o- ev e r a nd, t her e f ore , t he o rd er w a s e rr one o us a nd pre j ud i c i a l t o t h e i nt er es t o f Re ve nu e an d w a s li a bl e t o b e s e t a s i d e. Th e L d . CI T D R al s o re l ie d o n t h e n u me r ou s j u d i c i al p re ce d e nt s i n s up po rt o f hi s co nt en t i o n t ha t t h e Ld. P CI T h a s ri gh t l y ex e r c i s ed h is p ow er s u /s 26 3 of t he A c t . ITA No. 56-Chd-2021 Sh. Daljit Singh Bassi, Ranjit Nagar 9 5. 0 In re jo in de r , t he L d. A R s u b mi t t e d t ha t as f ar as th e i s s ue o f a s s es s e e’ s cl a i m o f e xe mp t i on r e l a t i ng t o i n ve s t m en t i n r e s i d en ti a l ho us e w as c onc er n ed , t h e s a me ha d t o be e xa mi ne d b y th e A s s es s i ng o f fi c e r i n t h e i m me di a t e ly s u cc ee di ng a s s es s men t yea r 2 0 16- 17 b ec a us e t ha t i n ve s t m e n t ha d b e e n ma d e a nd t h e cl a i m o f ex e mp t i o n w a s ma d e i n a s s es s men t y e a r 2 01 6 -1 7 an d no t i n th is y e a r a s t he a s s es s e e h ad on l y de p os i t ed t h e a m o u nt i n c ap i t a l g a in a c c o u n t s c h e m e du ri n g th e a s s es s men t ye a r u nd e r co n s id er a t i on a n d, t he r e f or e , t h is w a s a n o n- i s s ue i n t he y e a r u n de r a pp e al . 6. 0 We ha v e h e a r d t he ri va l s ub m is s i on s a nd ha v e a ls o pe r us e d t h e m at er ia l o n r e c or d. We h av e a l s o g o n e t hr ou g h t he i m p ug ned o rd e r as w el l a s t h e s how c au s e n ot ic e a n d t he ob j e c t i ons o f t h e a s s es s e e to t he s ho w c au s e n ot i ce . We h a v e a ls o g o n e t hr ou gh t he v ar i ous do c u m e n ts fi l ed by t h e as s e s s ee b e fo re us a nd w e ag re e w i t h the c o nt e n t i o n o f t h e L d. A R t h at t h e a s s e s s e e h ad fi le d v o lu mi n ou s ev id enc e s in s up po r t o f hi s c l a i m o f ex e m p t io n u /s 54 o f t h e A c t by f il i n g t he c op i e s o f t h e pu r c h as e d e e d s, s ale d e e d s a s w el l a s co pi es o f G i rd aw a ri a n d S a rs a i . T he r e i s a ls o a c e r ti fi c at e o f ‘ P a t w a ri ’ o n r ec or d a n d fr o m th e s ai d do c u m e n ts , i t i s ve ry m u ch e vi de nt t h at t h e l a nds in qu e s ti on w e r e o f a gr i c ul t ur al i n na t ur e. I t i s a ls o s e en t h a t t he as s e s s e e ha s al s o s ub m i tt e d c o mp ut a t i o n o f c a pi t a l g a i ns a s w el l a s co m pu t a t i o n o f e xe mp t i on, b ot h be fo r e t h e A s s e s s i ng o ffi c er a s w ell a s be fo r e t h e L d . P CIT . It i s a l s o s e en t h a t t h e as s e s s ee h ad a ls o sub m i t t e d t h e s e ITA No. 56-Chd-2021 Sh. Daljit Singh Bassi, Ranjit Nagar 10 do c u m e n ta ry e vi de n ce s a g a i n be fo re t he L d. P CIT i n r e s pons e t o t h e s ho w c a us e n ot i ce b u t t he s a m e di d not fi n d fa v o ur w i th t he L d. Ld . P CIT a nd t he L d. L d. P CIT c a me t o th e c on c l us i o n t ha t t he A s s es s i ng o f fi c e r h a d fa i l e d t o c o n du c t pr o p e r i nq ui r i e s / v er i fi ca t i on . H ow ev e r, w ha t f u rt he r i nq u i r y , th e A s s es s i ng o ffi c e r w a s r e qui r e d t o d o h as n o t be e n o u t l i ne d by t h e L d . P CI T i n t h e i mp ug ne d o rd er. We al s o n ot e t ha t t he Ld . P C IT hi m s e l f, on hi s ow n p ar t , di d n ot c o ndu ct a n y f ur t h e r i nq u i r i e s o n hi s o w n t o ar ri v e a t t h e c on cl us i o n t ha t t he or de r o f t he a s s es s men t w as e rr one ous a n d pr e j ud i c ia l to i n t e res t o f R ev e nu e. 6. 1 We ha v e a l s o p e r us e d th e a s s es s m ent or d e r a s w el l a s th e qu es t i o nn a i re i s s ue d by t h e A s s es s i ng o f fi c e r an d we n o t e t h a t a lt ho ug h t he as s e s s me nt or d e r i s v e r y s hor t a n d c r yp t i c a nd d oe s n ot el a b or a t e l y di s c us s th e i s s ue s w h ic h w e re b e f o re t he A s s e s si ng o ff i c e r, i t i s n ot a re q u i r e m e nt o f l aw th a t t he as s e s s me nt o rd e r s h ou l d be w ri t t en i n a n e la bo r a t e ma nn e r. F ro m th e pe r u sa l o f t he q u e s ti on na i re i s su ed b y t he A s s es s i ng o ff i c e r w it h r e sp e c t t o t he in q ui ry i n t o as s e s s ee ’s c l ai m u /s 54 o f t h e A c t , it i s a pp ar e n t t h at t h e A s s ess i ng o ffi c e r w a s on ri gh t t ra ck a nd h ad m a de a n in qui ry o n t h e is s u e for w hi c h t he a s se s s e e’ s c as e ha d be e n s e l e c t e d fo r l i mi t e d s c ru t i ny. I t i s a l so n ot t he c a se o f t h e D ep ar t m en t th at t h e as s e s s ee d id n ot gi v e p r o pe r r es p o n s e to t h e qu e r y ra i s e d b y th e A s se ss i ng o ffi c er , a s i s e v i de nc ed b y t h e vo lu mi no us do c u m e n ts w h ic h hav e b ee n fi le d b y t h e a s s es s e e in re s po n s e to th e qu e r y ra is e d by t he A s s es s i ng o ffi c er . T he r e for e , by n o s t r e t c h o f ITA No. 56-Chd-2021 Sh. Daljit Singh Bassi, Ranjit Nagar 11 i ma gi na ti on , i t c an b e s a i d t ha t t he A s s e s s i ng o ffi c e r h a d fa i l e d t o m a k e t he r eq ui r e d / p ro pe r i nq u i r ie s / v e r i f ic a ti on. 6. 2 We a l s o a gr e e w i th t h e c o nt e n t i o n o f t he Ld . A R t ha t t he i s s ue o f e xe mp t i on b y c l a i mi ng i n ve s t m e nt i n r e s id e n t i a l h ous e p ro p e r t y w as a s ub je ct ma t te r f or c ons i d e r a t i o n i n a s s es s me n t y e a r 2 01 6- 1 7 a n d t h is fa c t i s al s o e v i d e nt f r o m p a ra 1 1 o f t h e i mp u gne d or de r, w her ei n, t he Ld . P CIT h as me nt i o ne d t he da t e s b et w e e n J un e an d A u gus t 2 01 7. T he r e f o re , w e a re o f t he c o ns i d e r e d o pi ni on t h a t t he A s s e ss i ng o f fi ce r ha d, i n f ac t , ma de pr o pe r i nq u i r y be fo re a c c ep ti ng th e a s s e ss e e ’s c l a i m o f e x e mp t i o n u / s 5 4 o f t he A c t a n d t h e re w a s p r op e r a p pl i ca t i o n o f mi n d by t h e A s s es s i ng o ffi c er i n t h i s re g a rd i n s o fa r as t h e a s s es s men t pr o c e e d i n gs for as s e s s me nt y ea r 20 1 5 - 1 6 (i . e . ca pt ion e d a s s e ss me nt y ea r i s con c e r n ed ) . 6. 3 A t t hi s j un c t ure , i t w oul d be re l e v an t t o ma ke a r e fe re n c e t o t he j u d g me nt o f t h e H on’ b l e D el h i H ig h Co ur t i n t he c a s e o f C IT V s. S unb ea m A ut o L td re p or t e d i n [ 20 11 ] 3 3 2 I T R 16 7 (D el . ) w he re i n t h e H on’ bl e D el hi H i g h C ou r t h a s ru l e d th a t on e h a s t o ke e p in m i n d t he di s t i n c t i on b et w ee n ‘ la c k o f i n qu i r y ’ a n d ‘i na d e q u at e i nq ui r y ’ a n d fu r t h e r i f th er e w a s a ny i n qu i r y , ev e n i na d e q u at e , t ha t w o ul d n o t b y i ts e l f gi ve oc ca s i o n t o t h e Co m mi s s i o ne r t o p a s s orde rs u /s 2 63 o f t h e A ct , me re l y b e ca u s e he h as a d i ffe r e nt o pi ni on i n the ma t t e r. It w as fu r t h e r he l d b y t h e H on ' bl e D e lh i H i gh C o ur t t ha t if an y A s s es s i ng o f fi c e r, a c t i n g in a c c o rd a n c e w it h l a w , ma k e s a c e rt ai n a s s e ss me nt , t h e ITA No. 56-Chd-2021 Sh. Daljit Singh Bassi, Ranjit Nagar 12 s a me c a n n ot b e b ra n d e d a s e rr o n eo us b y t h e C o mm i s s ion er s i mpl y be c aus e , a c c o r d in g t o h i m, t h e ord e r s houl d h av e b ee n w r it t en mo r e e la bo r a t e l y . 6. 4 S i mi l a r w e r e t h e o bs er va ti on o f t h e H o n' bl e D elh i H i gh Co u rt i n t he c as e o f I TO V s . D G H ous i ng P ro j e ct s L td [ 2 0 12] 34 3 I T R 32 9 (D el ). In th is c as e , th e H on ' bl e D e lh i H i gh Co urt w e n t on t o o bs e r ve t ha t i n c a se w he r e th e r e i s i n -a de qu a t e i n qu i r y bu t no l a c k o f i n q u i r y, t he CI T mus t gi ve a nd r ec or d a f in di n g t h a t t h e or de r / e n q ui ry m a d e i s e rr o n eo us and t ha t t hi s c a n ha p p e n o nl y i f a n i n q uiry a nd ve r i fi ca t i on i s c on du ct e d b y t h e C I T. Th e H on ' b l e D el h i H ig h C ou r t i n t he c a s e o f I TO V s. D G H o us in g P r oj ec t s L t d ( s up r a ) a ls o h e l d t h a t i n mo s t c as e s o f a ll e g e d ‘ i n ad eq ua t e in q ui re s ’ i t w il l b e di ff i c ul t t o h ol d t h a t t he ord er o f t he A s s es s i ng o ff i c e r, w ho h ad c on du ct e d e n qu i r i e s a nd ha d a c te d a s a In v e st i ga to r, i s e r ron eo us , w it ho ut th e C I T c o n du c tin g ve ri fi c at i o n / in qu i r y hi ms e l f. H ow e ve r, i n t h e p re s en t ca s es , no s uch i n qu ir y h as be e n c a r ri e d o u t b y t h e L d. P CI T a nd h e h as s i mpl y d i r e ct e d t he A s s es s i ng o f fi ce r to c ar ry ou t d et a i l e d i n q u i r es . In o ur c o ns i de re d op i n i on , t h e L d. P CI T, w i t h ou t m ak i ng fu r t her i nq uir i e s on hi s ow n a cc ou n t, h a s s i mp l y s t a t e d i n t he i m pu gn e d or de rs tha t t h e A s s e s s i ng o f fi c e r w a s re q ui r e d t o ma ke mor e i nq ui ri es . T he Ld. P CIT ha s n ot po i n t e d ou t a s to w ha t fu rt he r i n q ui r i es w a s th e A sse s s i ng o ff i c e r re q u i r e d t o ma k e a nd as t o h ow w i t h o ut t hos e i n q u ires th e or de r o f t he A s s es s i ng o f fi ce r w e re e rr on e o us i n s o f ar a s p re jud ic i a l to t he i n t er es t o f th e Re ve nue . ITA No. 56-Chd-2021 Sh. Daljit Singh Bassi, Ranjit Nagar 13 6. 5 S i mi l a r l y, t he H on ' bl e D e l h i H i gh C o ur t i n t he c as e o f D I T V s. Jy ot i F ou nd a t i o n [20 1 3 ] 35 7 IT R 3 88 ( s up ra ) he ld a s u nde r: “ t hat i n qu i r i es w er e c er t ai nl y co n duc t e d b y t he A s se s s i ng O f f i c er . I t wa s no t a c as e o f n o i n q ui r y . T he o r de r un de r s e ct i on 2 63 i t s el f r e c o r ded t ha t t he D i re c to r f e l t t h a t t he i nq ui ri e s w er e n ot s uf f i c i e nt an d f ur t h e r i n qu i r i es or d e t ai ls s h ou l d ha v e be en c al le d f or . T h e i n q ui r y s h oul d ha v e b ee n co n d uc t e d by t h e D i r e ct or hi m s e l f t o r e c or d t h e f in di n g t h a t t he as s e s s m e nt o rd er was e r r one ous . H e s ho u l d n o t ha v e s e t as i de t he or de r a n d d i r e ct e d t h e A s s es s i ng O f fi c er t o co n du c t t h e i n qu ir y . " 6. 6 In t h e pr e s en t c a s e al s o, t he A . O . m ad e t he r eq u is i t e e nq ui ri e s , t he r e for e , i t i s n ot a c a s e o f no e nq u i ry an d i f t he L d. P r . CI T w as no t s a ti s fi e d w i t h t h e e nq ui ri e s m a d e b y t he A O, he s h o ul d h a ve c on du ct e d t he e n qui ri e s hi ms e l f t o re c or d th e f in din gs t ha t t h e a s s es s men t or d e r w a s e rr o ne ous an d h e s hou l d n o t h ave s i mp ly s e t a s i d e t he o rd er pa s s ed by t h e A O d i re c t i ng h i m t o co n d u c t th e f ur t h e r e nq ui ri e s . 6. 7 O n i d e nt i c a l is s ue , t he H on ' b le J u r i sd ic t io na l H i g h C ou r t i n t he ca s e o f CI T vs . M / s U ni que A ut o fe l ts ( P ) L t d ( 20 09 ) 30 D T R 23 1 (P & H ) he l d a s und e r : " 5. Fr o m t he f i n d i ng of t he T r i b u n al , it i s c l e a r th at t he as s e s s ee h a d g iv e n pr o p e r e x pl an at i o n b y f i li n g t he n ec e s sa r y c o nf i r m a ti on s . I n vi e w o f s uc h a fi ndin g , t he T ri b u n al r i g ht ly h e l d t h at p o we r und er S e c t i o n 26 3 o f t h e A ct co ul d be e x e r ci s e d w he r e v ie w t a k e n by an As s e s s i ng O f f ic er was e r r on e o u s . Wh i le e x er c is i ng ITA No. 56-Chd-2021 Sh. Daljit Singh Bassi, Ranjit Nagar 14 s uc h po we r , t h e Co m m i s s io ne r wa s bo u n d t o t ak e i n t o ac c ou nt a l l r el e v a n t f a c t s. I f o r d er i nv o k i n g t he sa i d po wer pr o c e ed s o n an er r o n eo us as s um pt i o n, th e s am e c ou l d b e s e t a s id e b y t he T r ib u na l . F in d i n g o f t h e T r i bun a l i s no t s h o w n t o b e pe r ve r s e . No s ubs t an t i al qu es t i o n of l a w ar i s es . " 6. 8 S i m i l a r l y, t he H on ' b l e S u p re me C ou r t i n t he l an d ma rk j ud g m e n t re po r t e d in t h e c as e o f M a la ba r I nd us tr ie s v s . CI T (2 00 0) 2 43 IT R 83 ( S C) h a s he l d a s und e r: “ A ba re r ea d in g of s e ct i o n 2 63 o f t h e Inc om e - t a x A ct , 19 61, m a k e s i t c l ear t hat t he p r er e qu i s i t e f o r t h e e xe r c i s e o f j ur i s di c t i o n by t he C om m i s s i one r su o m ot u un der it i s th a t t h e or de r of t he I n c o m e- ta x O f f ic er i s e r r one o us i n s o f ar as it is pr e ju di ci al t o t h e i nter e s t s of t he R e v e nue . T h e C om m i s si on er ha s t o be s a t is f i ed of t w i n c o nd it i on s , nam e ly , ( i) t h e or de r o f t h e A s se s s i ng O ff i ce r s ou gh t t o be r e v is e d is e r r one ous; an d (i i ) i t is pr e j u di c i al t o th e i nt er e s t s o f t he R ev en ue . I f o n e o f t h e m i s a b s en t -i f th e o rd er of the In c o m e - t a x O f f i c er is er r o ne o us b ut i s no t pr e j u d ici a l t o t h e R e v e nue o r if i t i s not e r r o ne o us b ut i s pr e j u di ci al t o t he R ev en ue -r ec o u r se c an n ot b e h ad to s e ct i on 2 6 3( 1 ) of t he Ac t . T h e p r ovi s i on c a n n ot b e i nv ok e d t o c or r e c t e ac h a n d e ve r y t y p e of m i s t a k e or e r r or c om m it t e d b y th e As s e s s in g O f f ic e r, if is only wh e n a n or d e r is e rr o ne o us th at t he s e ct i on wi l l b e at t r a c t e d. A n i nc o r r e ct as s u m p ti o n of f ac ts or an i nc or r ec t a pp li c a ti o n of l a w wi ll s at i s f y t h e r e qui r em e nt o f t he o rd er be i ng er r o ne o us . I n th e s am e c at eg o r y f al l or d e r s pas s e d wit ho ut ap pl yi ng t h e pr i nc i p le s o f n at ur al ju st i c e o r wi t ho ut a pp l i c at i on o f m i nd. T he p hr as e " pr e j u di ci a l t o th e i n t er e s t s o f the R ev en ue " i s n ot an e x pr es s i o n o f ar t an d is n ot de f in ed i n t h e A c t. U nde r s t o od i n i t s o r di n ar y m ea ni ng it is o f w id e i m p or t a n d i s not c o n f i n e d t o l os s of t a x. T he s c he m e of t h e A c t i s to l e v y a nd ITA No. 56-Chd-2021 Sh. Daljit Singh Bassi, Ranjit Nagar 15 c ol le c t t a x i n a cc o r da nc e wi t h t he pr o vi s i ons of t he A ct an d t hi s t as k is e nt r us t e d t o th e R e v en ue . I f due t o an e r ro n e o us o r d e r of t he In co m e - t ax o f f i ce r , t he R ev en ue i s l os i n g t a x la wf u l l y p a ya bl e by a p er s o n, i t wi l l c e r t a i nl y b e pr e ju di ci al t o t he i nt e r es t s of the R ev en ue . T h e p h r a s e " pr e ju di c i al t o th e i n t e r e st s of t he R e v e n ue " h a s t o be r e a d i n c o nj un c t i on wi th a n e r r one o us or d er pa s s ed b y t h e As s e s si ng O f f i c e r . E ve r y l os s o f r e ve n ue as a c o ns e qu en c e o f a n or de r of t he A s s es s i ng O f f ic e r, c ann o t b e t r e at e d as pr e ju d ic i a l t o t he i nt er e s t s of t he R e v e nu e, f or ex am pl e, w he n an In c o m e - t a x O f f i c e r ado p t ed on e of t h e c o ur s e s pe r m is s i bl e i n l a w an d i t has r es ul t ed i n l os s of r e ve n ue , or w he r e t w o vi e ws ar e p o s si bl e an d t he In c o m e - t a x O f f i c er has t a ke n o n e v ie w w i t h wh i c h t he Co m m i s s io n e r doe s no t agr e e, it c an n ot b e t r e a t e d as an er r o n eo us or d er p re j u di c i a l t o th e i nt e re s t s of t h e R ev en ue u nl e ss th e v i e w t ak e n b y t he Inc om e - t a x O f fi c er i s u ns us t ai n ab l e i n l a w. " 7. 0 In t he p r e s en t ca s e , a s w e h av e be e n ob s er ve d e a rl ie r, t he A s s es s i ng o ff ic e r h a d m ad e d ue i n q ui r i es a bo ut t h e c a p i t a l ga in e a r n e d on s a le o f a gr i c u l t u r al l a n d a s w e ll as t he a s s es s ee’ s c l a i m o f e x e mpt i o n u/ s 5 4 o f t h e A c t a n d t he a s s es s e e t oo h ad d ul y re sp on d e d by t h e q ue ry ra i s e d by t he A s s ess i ng o ff i c e r a nd h a d s ub m it t ed de t a i l s a nd e v i d e n c es i n s up p o rt o f hi s c l a i m b e f or e t h e A s s es s in g o ff i c er. Th is w a s al s o br o ug h t t o t he no t ic e o f t he Ld. P CI T i n re s po n s e to t he s h ow c a us e no t i c e i ss u ed u / s 26 3 o f t he A ct b u t t he s a m e d i d n o t fi nd fa v ou r w it h t he L d. P CI T. Th e r e f or e , on a n o v er a l l vi e w o f t he fa c ts o f t h e c a s e , i t i s o ur c ons i de re d o pi n i o n, t ha t t h e r e w a s d ue a p pli c a t io n o f mi n d o n th e pa r t o f t h e A s s e s s in g o f fi ce r a nd t h a t a de qu a te a n d p ro p e r e nq ui r y h a d be e n c on du c t ed by th e A s s es s i ng o f fi ce r i n t h i s r egar d an d, t he re fo r e, ITA No. 56-Chd-2021 Sh. Daljit Singh Bassi, Ranjit Nagar 16 t he i mp u g ne d o r d e r pa s s e d u/ s 26 3 o f t h e A c t c an n ot be up he ld . A cc or di ng l y, w e h ol d t h a t t h e pr o ce e di n gs u /s 2 63 of t h e A c t w e r e b a d i n l a w a nd w e q u as h t h e re vi s i on a r y p ro c e e d i n gs fo r t h e re as o n t ha t t h e A s s es s i ng o ffi c e r h ad a l re a d y m a d e a d e q ua te in qu i r ie s on th e i s su e ra i s e d b y t he L d. P CI T a n d fur t h er t h e L d. P C I T hims e l f h ad n o t r a i s e d a ny i nd e p e n de n t i nq ui r y on h is o w n be fo r e c o m i n g t o a n i nc orr e c t c on c us s i o n t ha t t h e a s s e s s me nt o rd e r w as e rr on e o us a n d pr e j ud i c i a l t o t he i nt e re s t o f Re v e n ue . 8. 0 In th e fi n a l r es u lt , t h e a p pe al o f t he a s se s s e e s t an ds al l ow e d . O rde r p ro no un c e d o n 25. 03 . 2 0 22 . Sd/- Sd/- ( N. K. SAINI) (SUDHANSHU SRIVASTAVA) Vice President Judicial Member Dated : 25.03.2022 “आर.के.” आदेशक त+ल,पअ-े,षत/ Copy of the order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent 3. आयकरआय ु .त/ CIT 4. आयकरआय ु .त (अपील)/ The CIT(A) 5. ,वभागीय त न1ध, आयकरअपील$यआ1धकरण, च3डीगढ़/ DR, ITAT, CHANDIGARH 6. गाड फाईल/ Guard File आदेशान ु सार/ By order, सहायकपंजीकार/ Assistant Registrar