Section 263 Quashed in Search Case – PCIT Cannot Revise Without Touching U/s 153D Approval

Shashi Kant Damodar Khandelwal Vs PCIT (ITAT Mumbai)

Mumbai ITAT quashed revision proceedings initiated under Section 263 across multiple years in a search-related case involving alleged accommodation entries linked to the Alankit Group.

The Tribunal held that where assessments u/s 153C r.w.s. 143(3) are passed after mandatory approval u/s 153D, such approval becomes an integral part of the assessment order. Therefore, the PCIT cannot invoke Section 263 merely on the ground of inadequate enquiry without first examining or invalidating the 153D approval.

It was further observed that the AO had conducted enquiries, examined seized material, and taken a plausible view, even making substantial additions. Hence, the case was not one of “lack of enquiry” but at best “adequacy of enquiry,” which does not justify revision u/s 263.

Relying on multiple judicial precedents, the Tribunal concluded that once a legally permissible view is taken after due enquiry and statutory approval, revisionary powers cannot be used for roving or fishing enquiries. Accordingly, all 263 orders were set aside and appeals allowed.

FULL TEXT OF THE ORDER OF ITAT MUMBAI

The above captioned have been preferred by the above assesses from the Revision orders passed u/s 263 of the Income-tax Act, 1961 by the Principal Commissioner of Income-tax, PCIT (Central)Mumbai-1 [hereinafter referred to as “PCIT”] pertaining to assessment orders passed u/s. 153(C) r.w.s. 143(3) of the Income-tax Act, 1961 [hereinafter referred to as “Act”]for the Assessment Years [A.Ys.] 2014-15, 2015-16, 2016-17, 201718, 2018-19, 2019-20 and 2020-21 in the case of Sri Shashi Kant Khandelwal and for AY 2014-15 in the case of his wife Smt. Sunita Khandelwal. Since, facts are identical and grounds are common, we dispose of all the above appeals by this consolidated order for the sake of brevity and convenience. We take ITA No. 8772/Mum/2025 in the case of Sri Shashi Kant Khandelwal as the ^„Lead case^‟ and our decision shall apply mutatis mutandis in respect of all the other appeals.