Revisional Jurisdiction cannot be invoked If there is No Illegality in Original Re-Assessment: ITAT [Read Order]

While quashing a revisional jurisdiction under section 263 of the Income Tax Act, 1961, the Income Tax Appellate Tribunal (ITAT), Pune bench has held that the same cannot be invoked if there is no illegality in the original assessment.

The appellant is a firm engaged in the business of real estate. The Assessing Officer, on receipt of the information from the Sub-registrar, Devgad, the Assessing Officer formed an opinion that the income escaped assessment to tax on the ground that the assessee firm had sold plot of land situated at Survey No.316A, Hissa No.1A at Village Jamsande admeasuring 0H 93R for a total consideration of Rs.34.50 lakhs during the year under consideration i.e. A.Y. 2013-14 and therefore, initiated re-assessment proceedings against the assessee.

The assessee contended that the income on sale of plot was offered to tax in the assessment year 2012-13 as the consideration was received as well as sale deed was also executed in the financial year 2011-12 relevant to the assessment year 2012-13. On receipt of this explanation, the Assessing Officer concluded the re-assessment.

A bench of Shri Inturi Rama Rao, Accountant Member and Shri S. S. Viswanethra Ravi, Judicial Member has observed that the original reassessment proceedings were initiated with view to tax the sale proceeds of Rs.34,50,000/-.

“On due consideration of the explanation filed by the assessee, the Assessing Officer was satisfied that there was no escaped assessment of income to tax and, accordingly, dropped the reassessment proceedings u/s 147 of the Act. The original reopening of assessment was not made on the ground of escaped assessment of income to tax in respect of receipt of sale of remaining 270 guntas of land. If the ld. PCIT was of the opinion that the income had escaped assessment to tax on account of sale of 270 guntas of land, the ld. PCIT is not estoppel from directing the Assessing Officer to initiate the fresh reassessment proceedings as there is no bar under the law to initiate the fresh reassessment proceedings again as reassessment proceedings may be initiated more than once under the provisions of section 147 in respect of the same assessee for the same assessment year in respect of different items of income which may have escaped assessment in the same assessment year subject to satisfaction of the conditions precedent for issue of notice u/s 148. But, it is not the case of the ld. PCIT that there is an illegality in dropping the original reassessment proceedings. Therefore, the present revision proceedings u/s 263 are not valid in law,” the Tribunal said.

Shri Pramod Shingte appeared for the assessee.

To Read the full text of the Order CLICK HERE

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