The Income Tax Appellate Tribunal (ITAT), Chandigarh Bench ruled that the PCIT(A) can not assume Jurisdiction under section 263 when various Benches of the Tribunal have already decided in favour of assessee.
The assessee, Taj Paul Bhardwaj an individual filed his return of income for the assessment year under consideration declaring income of Rs. 2,28,130/- and agricultural income of Rs.2,47,500/-. The case was selected for limited scrutiny for the reason that there was a substantial increase in the capital during the year relevant to the assessment year under consideration.
Accordingly, the AO issued notices under section 143(2) and 142(1) of the Act. In response thereof, the authorized representative of the assessee appeared before the AO and furnished the details called for by the AO. After hearing, AO accepted the return filed by the assessee.
Subsequently, the Pr. CIT issued notice to the assessee as to why the assessment order should not be revised u/s 263 of the Act for the reasons, that the assessee filed his return of income for the assessment year under consideration on May 25, 2015 whereas the due date was June 31, 2015 and the assessee had not deposited the capital gain in Capital Gain Deposit Account before the specific date. Therefore, the assessee was not entitled to claim exemption u/s 54 of the Act. Since the AO has failed to make any enquiry or verification, the assessment order is erroneous and prejudicial to the interest of the revenue
The assessee filed reply to the said notice and contended that the assessment order is neither erroneous nor prejudicial to the interest of the revenue. However, the Pr. CIT, rejecting the contention of the assessee, passed the order under section 263 of the Act and directed the AO to make assessment afresh on the issues mentioned in the notice. The assessee is in appeal against the said order passed by the Pr. CIT.
The coram headed by N.K.Saini noted that the Pr. CIT exercising jurisdiction under section 263 of the Act, directed the AO to make fresh assessment on the issues which were not the subject matter of the limited scrutiny. Since, the issue raised by the assessee in this case has already been decided in favour of the assessee by the various Benches of the Tribunal.
Therefore, the Tribunal while setting aside the order passed by the Pr. CIT ruled that the Pr. CIT(A) has exceeded jurisdiction under section 263 of the Act by directing the AO to make fresh assessments on the issues which were not the subject matter of the assessment framed on the basis of limited scrutiny.
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