Alok Vijawat Vs PCIT (ITAT Jaipur)
In the case of Alok Vijawat vs. PCIT, the ITAT Jaipur addressed the validity of the revisionary order passed under Section 263 of the Income Tax Act, 1961. The dispute arose after a survey conducted under Section 133A identified Rs. 76,00,000 as undisclosed income, which was declared as business income in the assessee’s return. While the Assessing Officer (AO) accepted this declaration during scrutiny assessment, the Principal Commissioner of Income Tax (PCIT) deemed the order erroneous and prejudicial to revenue, arguing that the income should have been classified under Sections 69 and 69A as unexplained investments and money, attracting taxation under Section 115BBE. The PCIT invoked Section 263 to revise the AO’s order, alleging insufficient inquiry into the nexus of the disclosed income. However, the Tribunal found that the AO had conducted due inquiry and adopted a legally permissible view. Referring to precedents, including the Supreme Court judgment in Malabar Industrial Co. Ltd. vs. CIT, the bench emphasized that revision under Section 263 requires the order to be both erroneous and prejudicial to revenue. Disagreement over the AO’s plausible view does not justify revisionary action. The Tribunal further clarified that Explanation 2(a) to Section 263, which broadens the PCIT’s powers, does not allow unchecked revisions. Concluding that the assessment order contained no factual or legal errors, the ITAT quashed the PCIT’s order, reaffirming the AO’s approach as valid and sustainable under law.
