Revisionary Powers cannot be exercised Arbitrarily: ITAT [Read Order]

Revisionary powers cannot be exercised arbitrarily, so was held by the Income Tax Appellate Tribunal (ITAT), Chandigarh.

The Assessing Officer passed an order u/s 143(3) dated 19.05.2017 wherein addition was made in regard to a Long Term Capital Gain where certain discrepancy in sale proceeds of SCF sold was noticed by the Assessing Officer. This order is set aside by the PCIT by an order u/s 263 dated 19.05.2017. Surjeet Singh, the assessee is an individual.

The Counsel for the assessee, Tejmohan Singh submitted that the issues also stood enquired into and considered by the AO. Calculation error also stood addressed by the AO and on the timelines qua 54EC, the view taken by the AO it was submitted, is well settled legally in assessee's favour. Hence is covered in assessee's favour as the AO took a possible view which is not shown to be incorrect.

The Counsel further submitted that the objections of the PCIT even on merits has no legal foot hold. However, maintaining the primary objection that on this issue, the ld. PCIT did not issue any Show Cause Notice, hence, the authority cannot proceed arbitrarily.

The bench consisting of Diva Singh, Judicial Member and Vikram Singh Yadav, Accountant Member observed that “On a consideration of the facts and circumstances of the present case, we find that the Revisionary Powers exercised by the PCIT cannot be upheld.

On going through the Paper Book filed considering the issues enquired into by the AO and replied to by the assessee, we find that when read along with the reply on behalf of the assessee before the PCIT, we find that the appeal of the assessee has to be allowed. The Revisionary Powers cannot be exercised arbitrarily. The twin conditions necessary for exercising the powers in the facts of the present case are found to be missing.”

To Read the full text of the Order CLICK HERE

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