Suvilas Properties Pvt. Ltd. Vs PCIT (ITAT Bangalore)
Sec.263 Revision Quashed – AO Had Conducted Detailed Enquiry on Model House & Business Expenses – Mere Change of Opinion Not Permissible – ITAT Bangalore
In ITA No.1140/Bang/2025, AY 2021-22, the assessee challenged revision proceedings initiated by PCIT u/s 263 alleging lack of enquiry on “Model House” expenditure and other business expenses. The AO had originally completed assessment u/s 143(3) after issuing multiple notices u/s 142(1) and verifying bills, vouchers, ledger accounts, vendor details and TDS compliance relating to business expenses aggregating to over ₹9.68 crore and other expenses of ₹6.02 crore.
The Tribunal observed that the assessment order itself recorded detailed verification by the AO (as reflected in para 3.4 and expense tables on pages 7-8), where expenses were examined and accepted as incurred wholly & exclusively for business purposes. Since the AO had conducted enquiries and taken a plausible view, the PCIT could not invoke revision merely because a different opinion was possible. ITAT reiterated that Sec.263 jurisdiction requires both conditions – order must be erroneous and prejudicial to revenue, which were absent here.
ITAT also noted that PCIT expanded directions beyond the specific issue raised (Model House expenses), which amounted to a fishing and roving enquiry. Accordingly, the revisional order dated 20-03-2025 was set aside and the original assessment order restored, allowing the assessee’s appeal.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
