Question ID :
38162
Validity of Notice issued u/s 263 of IT Act.
Dear Friends, please clarify on the following:-
An assessee filed his return of income claiming exemption U/s 54F of IT Act on sale of his vacant land by investing in a residential property. The assessment was processed U/s 143(1) of the IT Act.
Subsequently he was issued notice U/s 147 based on AIR information.
The assessment was completed U/s 143(3) accepting the Return filed and also the exemption U/s 54F.
Now, based on Audit Objection PCIT has issued notice U/s 263, setting aside the Assessment and directed the AO for re-assessment to deny exemption U/s 54F stating that the assessee has owned more than on residential house
The AO has started the reassessment proceedings
Please advise whether the reassessment proceeding is valid in view of reopening notice issued U/s 147 and assessment completed accepting the return.
Whether any case laws are available in this regard.
Whether we can object the assessment itself or appeal before CIT (A).
Posted by
RAMAN
on
May 24, 2019
Filed Under
DIRECT TAXES
In case of Purushottam P. Patel vs. ITAT Ahmedabad, it was held that where no material evidence or reason has been pointed before beginning the reassessment, which prove that the same has escaped assessment, reassessment proceedings u/s. 147 are not justified. Also, reassessment on new view on same facts is not permissible.
Posted by
CA. chunauti dholakia on
May 24, 2019
Answer ID :
76626
basic condition for availing the exemption u/s54F is that the assessee should not own more than one residential house other than the one to be acquired for claiming exemption u/s 54F. Including the new property, he can have 2 residential properties.
assuming, this condition is not fulfilled, if this was not considered u/s 143(3)/148 assessment, the CIT can definitely assume jurisdiction u/s 263 and direct the AO to pass fresh orders.
Posted by
CA. VENKITARAMAN K V on
May 25, 2019
Answer ID :
76668
CIT appears to be justified in what he has done subject to limitation of time u/s 263.
Posted by
SIVADAS CHETTOOR on
May 29, 2019
Answer ID :
76725
I wish to bring to your notice a case law ie CIT v Sohana woollen mills 296 ITR 238 wherin the HC held that revision based merely on the basis of audit objection cannot be the ground for revision u/s 263. You may try to apply the principles of that decision in your case.
Posted by
SIVADAS CHETTOOR on
Jun 03, 2019