Anil Kumar Batar Vs PCIT (ITAT Jaipur)
No Second Chance for Fishing Enquiry- AO’s Plausible View Cannot Be Replaced by PCIT’s Suspicion- PCIT Cannot Step into AO’s Shoes: Jaipur Tribunal Quashes Revision
Background
- Original assessment completed u/s 147 r.w.s. 144B on 18.03.2023 at returned income of ₹19,89,250.
- Issue: During survey, it was found that Matrix JEE Academy (tenant) had allegedly paid ₹75,00,000 cash advance to assessee for building construction.
- AO in reassessment proceedings (u/s 148) considered assessee’s replies, accepted declared income, & made no addition on this issue.
PCIT’s Action u/s 263
- On 10.03.2025, PCIT invoked revision jurisdiction u/s 263.
- Observed AO failed to properly verify the cash transaction of ₹75 lakh, even though it was the very reason for reopening u/s 148.
- Held assessment order erroneous & prejudicial to revenue for lack of enquiry.
- Directed AO to make fresh assessment after proper verification.
Assessee’s Arguments
- No jurisdiction: Both conditions of sec. 263 not satisfied—order not erroneous & prejudicial.
- AO had already examined this issue during reassessment with detailed queries & replies.
- Case was reopened only for this limited issue (alleged ₹75 lakh cash advance) → AO verified, tenant’s affidavit filed denying payment.
- PCIT ignored affidavit & evidence.
- Revision can’t be used just because PCIT thinks “deeper enquiry” was needed.
- Relied on case laws: Malabar Industrial Co. Ltd. (SC), Gabriel India (Bom HC), Software Consultants (Del HC), Palsana Gram Seva Sahakari Samiti (ITAT Jaipur), Sajjad Ali (ITAT Jaipur) etc.
- In faceless regime (NFAC), assessments are reviewed by multiple units, reducing chance of non-application of mind.
Tribunal’s Findings
- AO had specifically raised queries u/s 142(1) about the ₹75 lakh alleged cash advance.
- Assessee replied with details, bank statements, & tenant’s affidavit denying payment.
- AO, after considering material, took a plausible view & accepted returned income.
- Principle: When AO makes enquiries & adopts one possible view, order cannot be revised merely because PCIT feels further enquiry was required.
- Affidavit filed by tenant was not rebutted by PCIT; hence, facts stated therein must be accepted as true (supported by SC in Mehta Parikh & Co.).
- Revision u/s 263 cannot be used to conduct a “second round of fishing enquiry”.
Decision
- ITAT held PCIT’s order u/s 263 invalid.
- Assessment order was neither erroneous nor prejudicial to revenue.
- PCIT’s revision quashed.
- AO’s reassessment order dated 18.03.2023 restored.
When AO conducts enquiry on the very issue of reopening & takes a plausible view, PCIT cannot invoke sec. 263 just because he expects “deeper verification”. Mere suspicion or reliance on third-party information without rebutting assessee’s evidence (like affidavit) is insufficient.
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