An order under Section 154 does not necessitate inquiries, and thus cannot be deemed erroneous under Section 263 without breaching statutory limits.

आदेश/ORDER

PER AMITABH SHUKLA, A.M :

This appeal is filed by the assessee against the order bearing DIN & Order No.ITBA/REV/F/REV5/2024-25/1070000889(1) dated 28.10.2024 of the Leaned Principal Commissioner of Income Tax,(herein after “PCIT’), Chennai u/s 263 for the assessment year 2009-10.

2.0 The only issue contested by the appellant assessee through its six grounds of appeal, is regarding the invocation of revisionary jurisdiction u/s 263 of the Act by the Ld.PCIT-4. It is the case of the assessee that the impugned order of the Ld.AO passed u/s 154 of Act dated 02.06.2022 does not qualify as an order which is erroneous in so far as it is prejudicial to the interest of Revenue and therefore the assumption of jurisdiction of the PCIT was wrong.

3.0 It has been noted that there is a delay of 51 days in the case, in filing of this appeal before the tribunal. In its affidavit the assesse has pleaded that the assesse was exposed to the order u/s 263 dated 28.10.2024 which was linked to passing of order u/s. 154. It is the case of the assessee that around the time there was a change in the management team of the assessee as result of which some additional time was consumed for internal discussion on the fitness of taking the appellate course of action. All these activities contributed to the delay which was neither willful nor wanton. The assesse submitted that there will not be case of any non-compliance now. We have considered the justification put forth by the assesse and we are satisfied with their adequacy. We are also conscious of the fact that no litigant gains by intentionally delaying its own matters. The Ld. DR did not pose any serious objections to the delay. Accordingly, we hereby condone the delay and proceed to adjudicate this appeal.

4.0 Before proceeding further, we would like to place on record the following brief factual matrix of the case narrated by the Ld.Counsel for the assessee. Return of income for AY-2009-10 was filed by the assessee (formerly known as WS Electric Limited) declaring total income of Rs.16,33,10,041/- on 28.09.2009. Order u/s. 143(1) was passed on 04.11.2010 determining income at Rs.18,88,80,960/- and a tax demand of Rs.1,88,53,850/-. Subsequently, the assessee moved petition u/s. 154 dated 27.12.2010, 02.07.2018 and 19.02.2019. In the impugned rectification petitions, the assessee had requested for rectification u/s 154 towards following issues:-

i) That in the order u/s.143(1) capital gains has been calculated while omitting to consider cost of acquisition of Rs.2,55,70,923/-.

ii) TDS claim of Rs.3,29,478/- has not been considered qua M/s.Hewlatt Packard Global Soft Pvt Ltd

iii) The assessee is primarily earning lease rental income under the head income from house property and that it was wrongly assessed as business income.

iv) That by an inadvertent mistake an amount of Rs.6,12,70,077/- was shown as short time capital gains in schedule CG-A as against long term capital gains in schedule CG-B. It was submitted that the assessee had paid applicable taxes on long time capital gain while filing its return of income. Acting upon the request of the assessee, the Ld.AO passed u/s 154 of Act dated 02.06.2022 by rectifying the mistakes by treating short time capital gains as long time capital gains, income from business as income from house property and giving the necessary credit for TDS.

5.0 The PCIT- 4 Chennai premised that the mistake concerning treatment of short time capital gains as long time capital gains and business income as income from house property were not amenable to action u/s 154 without detailed enquiry and verification and that by doing so, the Ld.AO has passed an order which is erroneous and prejudicial to the interest of the Revenue. Consequently, he proceeded to set aside the order u/s. 154, directing the Ld.AO to hold detailed enquiries as to whether assessee’s case is that of earnings from business or income from house property and that to hold enquiries from records, sale / purc