Aahana Sales Private Limited Vs PCIT (ITAT Ahmedabad)
PCIT Must Investigate, Not Assume: 263 Order Set Aside for Lack of Inquiry-Mere Allegation of ‘Inadequate Inquiry’ Not Enough-PCIT Cannot Revise Without Making Any Inquiry
Ahmedabad Tribunal quashed the revisionary order passed u/s 263. PCIT had set aside the reassessment order (passed u/s 147 r.w.s. 144 & 143(3)) on the ground that AO failed to properly verify packing expenses of ₹43.85 lakh & sales promotion expenses of ₹46.78 lakh, & had allegedly not examined evidences relating to transactions with M/s Shreenath Traders involving ₹3.81 crore.
Assessee demonstrated that it had filed extensive documentary evidence before the AO-ledger accounts, invoices, bank statements, & GST returns-while responding to the AO’s show-cause notice dated 11.03.2023. Despite this, the PCIT assumed inadequate inquiry but did not conduct any inquiry of his own, nor did he call for books, verify documents, make third-party checks, or show why the AO’s view was unsustainable. The ITAT emphasised that section 263 mandates two conditions: the order must be erroneous & prejudicial to Revenue, & the PCIT must make or cause to be made necessary inquiries. Failure to perform this statutory duty renders the revision invalid.
Tribunal held that reassessment completed with Additional CIT’s approval, based on evidence on record, could not be revised merely because the PCIT preferred deeper inquiry. Since the PCIT acted on assumption, not investigation, the 263 order lacked jurisdiction & was quashed in toto. The Assessee’s appeal was allowed.



