Tapadia Constructions Ltd. Vs PCIT (Central) (ITAT Pune)
Revision u/s 263 quashed – Assessment u/s 153A passed with prior approval u/s 153D cannot be revised; AO made due enquiry; mere valuation difference not a ground for 263
This appeal by Assessee arose from revision u/s 263, where PCIT held that AO failed to tax alleged undervaluation of building & plant/machinery based on a Sub-Registrar valuation report. AO had completed assessment u/s 153A r.w.s. 143(3) on 02.06.2021 after mandatory approval u/s 153D and had already examined valuation issues, making addition only u/s 43CA for land difference.
PCIT invoked 263 alleging lack of enquiry and prejudice to Revenue on the ground that Govt. valuation exceeded sale consideration by ₹4.81 crore.
Tribunal noted that:
- AO issued several detailed notices u/s 142(1) calling for valuation, sale deeds, auction papers, ledger, statements, & Assessee filed elaborate replies.
- AO applied mind and accepted Assessee’s explanation after enquiry — at best, Revenue alleges inadequate enquiry, which cannot justify 263.
- Mere guideline value difference is not a ground for revision; guideline value is only an indicator (Padmavathi, Madras HC).
- Sale was through auction; highest bid represents FMV; actual sale price exceeded auction price.
- No incriminating material existed for an unabated year; valuation report of Registrar is not incriminating.
- The entire 263 foundation was based on wrong facts & miscomparison (building valuation compared with machinery sale).
- Once AO’s order is passed with prior approval u/s 153D, PCIT cannot revise it unless he first shows that the 153D approval itself was erroneous — no such finding was given.
Relying on Prakhar Developers (MP HC), Devender Kumar Gupta (Delhi ITAT), Dhariwal Industries (Pune) & other precedents, Tribunal held that 263 cannot survive.
