Assessment Order Without enquiries or material giving rise to the subjective satisfaction is Erroneous: ITAT

Dr.Kalpana Alexander Vs. Asst. Commissioner of Income Tax, Hyderabad

(Order pronounced in the open court on this the 31st day of May, 2022)

The assessee is an individual, and a medical practitioner at M/s. Matrika Hospital, Hyderabad. For the AY.2015-16, she filed her return of income declaring an income of Rs.46,80,710 which comprises of Rs.2,74,233 towards income from house property, Rs.29,01,285 towards income from business and profession and Rs.15,15,191 towards income from other sources. It was noticed that the assessee did not declare any income towards capital gains, after claiming deduction of Rs.37,27,774 u/s. 54 of the Act and Rs.47,77,180 u/s. 54EC of the Act. It was picked up for scrutiny to verify the large deduction claimed u/s. 54 of the Act. Assessment was completed u/s. 143(3) of the Act by order dt.29-08-2017 determining the taxable income at Rs.46,97,502 as against the returned income of Rs.46,80,710. Learned PCIT found that the assessment order is erroneous in law insofar as it is prejudicial to the interest of Revenue. It was set aside and the learned Assessing Officer was directed to redo the assessment after examining the issue of deduction claimed u/s. 54 of the Act to the extent of Rs.37,27,774 and the sources for investment to the extent of Rs.13,25,000 in specified bonds.

Appeal before the tribunal: Assessee is, therefore, aggrieved and filed this appeal with a delay of 85 days which was condoned due to pandemic and appeal was decided on merits.

It was held that it is an admitted fact that the learned Assessing Officer did not make any enquiries into the additional amount that was put in bonds out of the sale consideration of the Sainikpuri property and also there is no enquiry into the acquisition of the sixth floor of M/s. Matrika Hospital. It is, therefore, clear that for want of conducting enquiries, the assessment order is erroneous.

All these factors well justify the order of the learned PCIT in exercise of section 263 of the Act and the conclusion that the tribunal drew is that the assessment order is not only erroneous but also prejudice to the interest of Revenue. There are no grounds to interfere with the impugned order and the same is, therefore, upheld. Appeal is devoid of any merits and was liable to be dismissed. Grounds of appeal are accordingly dismissed. In the result, the appeal of assessee is dismissed.