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Tax Publishers Shweta Agrawal v. Pr. CIT [I.T.A. No. 280/Ind/2019, dt. 21-12-2020] : 2021 TaxPub(DT) 3 (Ind-Trib) Reopening by PCIT under section 263 alleging exempted capital gains arose out of penny stocks -- Validity -- Certain key points on powers of reopening by PCIT *Facts:* The scrutiny assessment of the assessee where in certain capital gains on listed shares were claimed as exempt under section 10(38) was reopened by the PCIT under section 263 citing that the assessing officer had not carried out adequate enquiry on these penny stocks. This went up to ITAT for adjudication. The claim was since it was a scrutiny assessment the PCIT could not have invoked his powers under section 263. Held in favour of the assessee that the reopening was incorrect on facts that the said capital gains on the underlying alleged penny stock shares was found to be genuine in another case of another assessee. Above besides certain points were discussed by the ITAT which make it worth noting. Powers of revision under section 263 by PCIT can these be invoked in each of the below circumstances :-- (a) Complete failure to conduct relevant enquiry; (b) Conducting enquiry but not taking it to its logical conclusion; (c) Conducting enquiry but drawing the wrong conclusion. It was held by the ITAT that -- (a) Proper enquiry warrants relevant matters and info. to have been sought. If this was missing the case can be revised under section 263. (b) Inadequate enquiry is as good as lack of enquiry. (c) If the enquiry did not bring forth facts relevant to the point of revision then it was certainly erroneous and prejudicial to the interests of the revenue. (d) PCIT by invoking powers under section 263 does not overrun assessing officers jurisidction under sections 142(1) and 143(2) -- he simply reviews facts if matters what has to have been enquired/scrutinized have been done or otherwise. So recourse to section 142(1) or 143(2) is not available to demolish the revision under section 263. *Read into:* Marigold Nirman Pvt. Ltd. and related cases [ITA No. 1365/Kol/2013, dt. 3-7-2015], also reported as Subhlakshmi Vanijya (P) Ltd. (2015) 172 TTJ 721 (Kol) : 2015 TaxPub(DT) 2950 (Kol-Trib)

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Shweta Agrawal v. Pr. CIT [I.T.A. No. 280/Ind/2019, dt. 21-12-2020] : 2021 TaxPub(DT) 3 (Ind-Trib)

Reopening by PCIT under section 263 alleging exempted capital gains arose out of penny stocks -- Validity -- Certain key points on powers of reopening by PCIT

Facts:

The scrutiny assessment of the assessee where in certain capital gains on listed shares were claimed as exempt under section 10(38) was reopened by the PCIT under section 263 citing that the assessing officer had not carried out adequate enquiry on these penny stocks. This went up to ITAT for adjudication. The claim was since it was a scrutiny assessment the PCIT could not have invoked his powers under section 263.

Held in favour of the assessee that the reopening was incorrect on facts that the said capital gains on the underlying alleged penny stock shares was found to be genuine in another case of another assessee.

Above besides certain points were discussed by the ITAT which make it worth noting.

Powers of revision under section 263 by PCIT can these be invoked in each of the below circumstances :--

(a) Complete failure to conduct relevant enquiry;

(b) Conducting enquiry but not taking it to its logical conclusion;

It was held by the ITAT that --

(a) Proper enquiry warrants relevant matters and info. to have been sought. If this was missing the case can be revised under section 263.

(b) Inadequate enquiry is as good as lack of enquiry.

(c) If the enquiry did not bring forth facts relevant to the point of revision then it was certainly erroneous and prejudicial to the interests of the revenue.

(d) PCIT by invoking powers under section 263 does not overrun assessing officers jurisidction under sections 142(1) and 143(2) -- he simply reviews facts if matters what has to have been enquired/scrutinized have been done or otherwise. So recourse to section 142(1) or 143(2) is not available to demolish the revision under section 263.

Read into: Marigold Nirman Pvt. Ltd. and related cases [ITA No. 1365/Kol/2013, dt. 3-7-2015], also reported as Subhlakshmi Vanijya (P) Ltd. (2015) 172 TTJ 721 (Kol) : 2015 TaxPub(DT) 2950 (Kol-Trib)