While quashing the revisional assessment in the case of Sangeeta Jain, Income Tax Appellate Tribunal (ITAT) Delhi bench recently ruled that capital gain exemption allowed by the Assessing Officer (AO) on the basis of the certificate from Tahasildar cannot be treated as erroneous.
The assessee in the instant case is an individual duly filed her return of income for the relevant assessment year. After the completion of the assessment proceedings, the Commissioner of Income Tax noticed that the Assessee earned the capital gain of Rs. 10,72,76,180 on the sale of agricultural land.
However counsel for the Assessee Advocate Rakesh Gupta and Advocate Samir Agarwal filed a letter regarding the tax exemption and state that the subjected agricultural land was situated beyond the prescribed limits of Sohana and that it was not a capital asset as the land was situated beyond the prescribed limit of concerned municipal limit and thus capital gain arising on the sale of such agricultural land is exempt and also placed a copy of the certificate from Tahasildar which certifying the distance from the municipality before the Commissioner.
But the CIT refused to accept the contention of the Assessee and passed an impugned order under section 263 of the Income Tax Act 1961 and held that the capital gain was taxable.
While considering the above-narrated facts, the Tribunal bench comprising of Judicial Member Sudhanshu Srivastava and Accountant Member B.P.Jain observed that “there is no finding recorded by the CIT(A) after the receipt of replies from the Assessee that the assessment order was erroneous and prejudicial to the interest of the Revenue. Therefore, absences of such findings are also fatal to the validity of the order passed by the Revenue under Section 263 of the Income Tax Act”.
The division bench further observed that “certificate issued by Tahasildar in the instant could not be disbelieved by the AO for the reason that the Tahasildar is also a Public Officer. Certificates issued by the public officers are generally delivered by the other officers as public duty unless there is some material, which suggests that such certificate has been obtained under fraud etc. therefore there is no merit in the order passed by the CIT under the said section of the Act that Tehsildar’s certificate should have been corroborated with other evidence”.Subscribe Taxscan AdFree to view the Judgment