The Income Tax Appellate Tribunal (ITAT) Bangalore Bench, has recently, in an appeal filed before it upheld the revisional order on the ground of LTCG exemption on STT payment without verification.
The aforesaid ruling was made by the Tribunal when an appeal was filed before it by an assessee, as against the order of the Principal Commissioner of Income Tax, Bengaluru-1, [‘PCIT’] u/s. 263 of the Act dated 4.3.2022, for the AY 2017-18.
The grounds of the assessee’s appeal being that the impugned Order of the learned Principal Commissioner of Income-tax, Bangalore-1, passed under section 263 of the income tax Act in so far as it is against the Appellant is opposed to law, equity, weight of evidence, probabilities and the facts and circumstances in the Appellant’s case , and further that he has grossly erred in ordering revision of the order passed by the learned assessing officer without appreciating the fact that there is no error, much less prejudicial to the interests of the Revenue to warrant a revision, it was submitted by the assesse that the said order passed by the learned Principal Commissioner of Income-tax, Bangalore 1, being ultra vires the scope of Section 263 ,requires to be cancelled under the facts and circumstances of the Appellant’s case.
With the Dr supporting the order of the PCIT, the Tribunal observed as follows:
“We have considered the rival submissions and perused the material on record. We notice that the PCIT in the order u/s 263 has noted the fact that the assessee has submitted the details of STT paid in form 10DB and hence there is no dispute with regard to the fact that the details are furnished before the AO. However, there is nothing noted in the order of the AO that he has verified the details furnished and has reconciled the long term capital gains claimed as exempt by the assessee with the amount furnished in Form 10DB.”
“The PCIT for this specific reason has invoked the provisions of section 263 and to this extent, we are of the considered view that the action of the PCIT is justified. We therefore uphold the order of the PCIT setting aside the order of the AO to the limited extent of verification of long term capital gain claimed exempt on STT being paid.”, the bench added.
Thus, concluding its observation, the Tribunal ruled:
“In view of the above discussion the order of the PCIT u/s. 263 is modified to the extent that order u/s.143(3) is set aside with regard to allowing the claim of exemption of long term capital gains based on payment of STT. It is ordered accordingly.”
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