Manohar & Filaments Pvt. Ltd. Vs PCIT (ITAT Delhi)
Search Assessment Has Boundaries: Revision Beyond 153C Fails- 153D Approval Shields Assessment from 263 Revision;
No Incriminating Material, No 263: ITAT Reins in PCIT- PCIT Can’t Bypass Statutory Approval: 263 Order Quashed
Delhi ITAT quashed revision order u/s 263 holding that PCIT cannot assume revisional jurisdiction over an assessment completed u/s 153C after due approval u/s 153D, unless such statutory approval itself is shown to be erroneous & prejudicial to Revenue. In Manohar & Filaments Pvt. Ltd vs. PCIT (Central)-3, ITA No. 2645/Del/2025, AY 2017-18, Tribunal noted that assessment was an unabated search assessment completed u/s 153C/143(3) with prior approval of JCIT u/s 153D. PCIT sought to revise the order directing fresh enquiries into alleged non-genuine loan transaction of ₹5.50 lakh, despite absence of any incriminating material or reference in satisfaction note.
Following Delhi ITAT decisions in Alankit Associates Pvt. Ltd, Devender Kumar Gupta and relying on MP HC ruling in PCIT vs. Prakhar Developers Pvt. Ltd. (162 taxmann.com 48), Tribunal held that revisional authority must examine not only AO’s order but also the statutory approval forming part of the “record”. Without holding such approval to be vitiated, PCIT cannot invoke s.263. Tribunal further observed that PCIT travelled beyond scope of s.153C by directing enquiry on issues not arising from seized material. Accordingly, revision order was quashed & other grounds were left open as academic
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal is filed by the assessee against the order of the Ld.PCIT (Central)-3, Delhi vide order dated 11.03.2025 for the A.Y. 2017-18 passed u/s.263 of the Act.
