Revisionary action u/s 263 on mere change of opinion is unsustainable

Smt. Anupama Asawa Vs PCIT (ITAT Indore)

ITAT Indore held that when one possible view has been taken by AO the same cannot be treated as erroneous and prejudicial to the interest of the revenue. Accordingly, revisionary order under section 263 of the Income Tax Act based on mere change of opinion is unsustainable in law.

Facts- The case of the assessee was selected for Limited Scrutiny through CASS for examination of issue related to ‘Deduction/ Exemption from capital gains’. The Ld. AO completed the assessment and passed assessment order u/s 143(3) of the Act on 03.06.2019 assessing total income at Rs.14,63,470/-. Subsequently, the Ld. PCIT invoked the provisions of section 263 of the Act

PCIT was not convinced with the reply furnished by the assessee and was of the view that the Ld. AO should have examined this issue related to ‘Deduction/ Exemption from capital gains’ in detail and accordingly, the assessment order was held to be erroneous and prejudicial to the interest of Revenue by the Ld. PCIT. Now the assessee is in appeal before the Tribunal challenging the jurisdiction of Ld. PCIT assumed u/s 263 of the Act.

Conclusion- Thus, considering the entire aspects of the matter, we find that when the original assessment order has been passed under Section 143(3) of the Act by the Ld.AO after due verification of the same issue as raised in the order impugned passed under Section 263 of the Act and that too upon causing exhaustive enquiry and finalising the same after taking a possible view, the invocation of provision of Section 263 of the Act on the basis of change of opinion is, thus, not found to be sustainable. We have also found substance in the arguments advanced by the Ld. AR that the original order needs not to give detailed reason. Further that, when one possible view has been taken by the Ld.AO the said cannot be treated as erroneous and prejudicial to the interest of the Revenue.

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