Surat Vankaneri Momin Jamat Trust Vs CIT (ITAT Surat)
Section 263 Quashed: Once AO Examines Source of Property Investment, CIT(E) Can’t Revisit the Issue
Surat ITAT quashed the revisionary order passed u/s 263, holding that where the Assessing Officer has already examined the issue and taken a plausible view, the Commissioner cannot invoke Section 263 merely to conduct further verification or to substitute his own opinion.
The Trust’s case was reopened u/s 147 on the basis of Form 26AS reflecting investment of ₹2.30 crore in immovable property. During assessment, AO verified the issue and found that the property was mistakenly reported multiple times and that the actual investment was only ₹46 lakh. The AO specifically called for explanation u/s 142(1) and examined the source of ₹46 lakh, supported by bank statements and ledgers, and completed assessment without addition.
CIT(E) thereafter invoked Section 263, alleging that AO failed to examine the source of ₹46 lakh, and set aside the assessment. ITAT found this premise factually incorrect, noting that the source—utensil rent income, Lillah income, and interest-free unsecured loans from members—was fully examined and accepted by AO.
Tribunal held that the order of AO was neither erroneous nor prejudicial to the interest of Revenue, and that Section 263 cannot be invoked for a mere change of opinion or to re-examine an issue already scrutinised. Accordingly, revisionary order u/s 263 was set aside and assessee’s appeal allowed.
FULL TEXT OF THE ORDER OF ITAT SURAT
This appeal is filed by the assessee against the order of the Commissioner of Income Tax (Exemption), Ahmedabad (at Surat), (in short ‘CIT(E)’), dated 25.03.2025 for the Assessment Year 2018-19 passed in his revisional jurisdiction under Section 263 of the Income Tax Act, 1961 (in short ‘the Act’).
