Studds Accessories Limited Vs PCIT (ITAT Delhi)
ITAT Delhi Quashes Sec 263 Revision – Mere Suspicion Alleged Inadequate Enquiry Not Sufficient to Invoke Revisionary Powers
In Studds Accessories Ltd. vs PCIT (AY 2020-21), the ITAT Delhi allowed the assessee’s appeal and quashed the revision order passed u/s 263. The PCIT had set aside the assessment alleging lack of enquiry regarding differences in professional fees, salary expenses, deduction u/s 80JJAA and CSR expenses. However, the Tribunal observed that detailed submissions and supporting documents were already furnished during assessment as well as revision proceedings.
The ITAT held that the PCIT failed to demonstrate how the assessment order was both “erroneous” and “prejudicial to the interest of revenue,” and merely remitted issues to the AO without giving specific findings. It reiterated that revision cannot be invoked for inadequate enquiry or on mere suspicion, and that the Commissioner must independently verify and record clear error. Since the PCIT did not establish the twin conditions required u/s 263, the revisionary order was set aside and the assessee’s appeal was allowed.
FULL TEXT OF THE ORDER OF ITAT DELHI
1. This appeal is filed by the assessee against the order of Principal Commissioner of Income Tax, (PCIT), Faridabad (hereinafter referred to ‘ld. PCIT’) dated 31.03.2025 for AY 2020-21.
