S. 263 : Commissioner-Revision of orders prejudicial to revenue- Long-term capital gains on equity-oriented funds-Annual letting value of properties-Non-initiation of penalty proceedings-Where AO had examined the details and taken a possible view, revision was not justified. [S. 45, 112A, 14A, 23, 24(b), 143(3), 271C]
The assessee, a designated Senior Advocate, was assessed u/s 143(3) r.w.s. 144B for AY 2020-21. The PCIT invoked revisionary jurisdiction u/s 263 on three issues: (i) taxability of gains from sale of certain mutual funds by treating them as non-equity oriented and taxable as STCG instead of LTCG u/s 112A, (ii) alleged incorrect/non-disclosure of ALV in respect of various properties in India and London, and (iii) failure of the AO to initiate penalty proceedings u/s 271C for non-deduction of TDS. The Tribunal held that the six funds in question were equity-oriented funds, duly supported by ISIN codes and fund statements, and the AO had already examined these details during scrutiny; hence, the view taken was a possible view and could not be revised merely because the PCIT held a different opinion. On the ALV issues, the Tribunal noted that some properties were already sold in earlier years, others were used for professional purposes, and in several cases the ALV declared had been consistently accepted in past assessments. The PCIT had not brought any cogent material or evidence to justify substitution of ALV merely on the basis of general “yield overview” screenshots. As regards penalty u/s 271C, following Delhi High Court decision in CIT v. Nihal Chand Rekyan, [2000] 242 ITR 45 ( Delhi)( HC) the Tribunal held that non-initiation of penalty proceedings cannot be made a ground for revision u/s 263. Accordingly, applying the principles laid down in Malbar Industrial Co Ltd. (2000) 243 ITR 83 (SC), CIT v. Gabril India Ltd (1993) 203 ITR 108 (Bom)(HC) the Tribunal quashed the revision order u/s 263, subject only to verification of the purchase cost of SBI Gold Fund. Appeal was allowed. (ITA No. 2427/Del/2025 dt.16 -2-2026) (AY. 2020-21)
Shri Mukul Rohatgi v. PCIT (Delhi)(Trib) www.itatonline.org .
[Coram : Hon’ble Shri Mahavir Singh, VP and Hon’ble Shri Manish Agarwal, AM]