Safal Constructions (India) Pvt. Ltd. Vs PCIT (ITAT Ahmedabad)
Change of Opinion Not 263: PCIT’s Roving Enquiry Direction Held Illegal
Assessments for both years were completed u/s 153C on 30.09.2022 after mandatory approval u/s 153D. The AO had issued detailed notices u/s 142(1) (dated 12.02.2022 for AY 2018-19 and 10.02.2022 for AY 2019-20) and Assessee filed comprehensive replies (dated 07.03.2022 & 11.02.2022) containing page-wise rebuttal of every seized document recovered from the residence of one Shri Suresh Thakkar. AO, after verification, drew no adverse inference other than minor disallowances.
PCIT invoked s.263 on the ground that AO failed to examine seized data relating to TDR transactions, alleged cash payments, Makarba land documents, digital pages 152, 170, 260, survey disclosures of ₹43.52 crore, and other jottings. PCIT relied only on extracts of seized material and concluded that deeper verification was required.
Before Tribunal, Assessee demonstrated through paper book that:
- seized documents did not pertain to Assessee company;
- detailed rebuttals were already filed before AO;
- Shri Rajesh Brahmbhatt’s s.131 statement confirmed Makarba land belonged to him & Smt. Zaveri and had not been sold;
- survey disclosure of ₹43.52 crore was already taxed in AY 2023-24 in the concerned person’s assessment;
- AO made proper enquiry & took a plausible view.
Tribunal held PCIT’s action unsustainable because:
- PCIT did not discuss a single explanation furnished by Assessee;
- PCIT conducted no independent enquiry into seized material;
- PCIT did not contradict AO’s enquiry or Assessee’s multiple replies;
- PCIT failed to record mandatory finding of error or prejudice—revision based solely on desire for “further enquiry”;
- revision amounted to mere change of opinion, impermissible u/s 263.
Accordingly, revisionary orders u/s 263 for both AYs were quashed. AO’s original 153C assessments restored. Appeals allowed.
