Assessee challenges the assumption of jurisdiction u/s. 263 of the Income Tax Act

Last updated: 11 May 2021

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Quick Summary

This Income Tax Appellate Tribunal case involves an assessee challenging the Principal Commissioner's authority to review a tax assessment under Section 263 of the Income Tax Act. The assessee argues that the Principal Commissioner lacked the proper jurisdiction to issue the review order. The core of the challenge lies in the fact that the review was initiated based on a proposal from the Assessing Officer, who had apparently failed to act on available information.

Court :
ITAT Kolkata

Brief :
This appeal preferred by the assessee is against the order of Ld. Pr. CIT-10, Kolkata dated 11.12.2018 for A Y 2014-15 passed u/s. 263 of the Income-tax Act, 1961 (hereinafter referred to as the “Act”).

Citation :
I.T.A. No. 260/Kol/2019

IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH: KOLKATA
[Before Shri J. Sudhakar Reddy, AM & Shri A. T. Varkey, JM]

I.T.A. No. 260/Kol/2019
Assessment Year: 2014-15

Satish Kumar Lakhmani
(PAN: ABYPL4427B)
Appellant

Vs.

Principal Commissioner of Incometax-10, Kolkata.
Respondent

Date of Hearing (Virtual) 08.04.2021
Date of Pronouncement 21.04.2021

For the Appellant Shri Subash Agarwal, Advocate
For the Respondent John Vincent Donkupar Longstich, CIT, DR

ORDER

Per Shri A.T.Varkey, JM

This appeal preferred by the assessee is against the order of Ld. Pr. CIT-10, Kolkata dated 11.12.2018 for A Y 2014-15 passed u/s. 263 of the Income-tax Act, 1961 (hereinafter referred to as the “Act”).

2. The assessee has raised a legal issue wherein he has challenged the assumption of jurisdiction u/s. 263 of the Act which according to him, the Ld. Pr. CIT does not enjoy in the facts and circumstances of the case.

3. According to Ld. AR Shri Subash Agarwal, a perusal of the impugned order passed by the Ld. Pr. CIT u/s. 263 of the Act reveals that he has passed the order u/s. 263 of the Act on a proposal made by the AO and he drew our attention to para 2 and 3 of the impugned order which read as under:

“2.Subsequently, an error was detected in the assessment order and a proposal was received in this office for review of the impugned order u/s. 263 of the Act.

3. On perusal of the said proposal of the AO, along with the records, prima facie it transpired that the Assessing Officer, namely ITO, Ward-28(4), Kolkata (hereinafter, the AO) had apparently failed to take a logical action on the information available with him.

To know more in details find the attachment file

FAQ :

Section 263 of the Income Tax Act, 1961, grants the Principal Commissioner (or Commissioner) the power to review certain orders passed by the Assessing Officer if they consider the order to be erroneous and prejudicial to the interests of the revenue.

The assessee was challenging the Principal Commissioner's assumption of jurisdiction under Section 263, arguing that the circumstances did not warrant such a review.

The review under Section 263 was initiated based on a proposal from the Assessing Officer, who had detected an error in the original assessment order and believed there was a failure to take appropriate action on available information.

The appellant is Satish Kumar Lakhmani, and the respondent is the Principal Commissioner of Income Tax-10, Kolkata.