City Union Bank Vs PCIT (ITAT Chennai)
No 263 When AO Took a Plausible View: Chennai ITAT Quashes PCIT’s Revision in City Union Bank Case
Chennai ITAT ‘C’ Bench allowed the appeal of City Union Bank for AY 2018-19 and set aside the revision order passed u/s 263 by PCIT, Madurai. Tribunal held that the Assessing Officer had raised specific queries u/s 142(1) & 143(2), examined details, and consciously allowed the claims, including deductions u/s 36(1)(vii), 36(1)(viia) and ESOS expenditure. It was observed that this was not a case of lack of enquiry but at best of alleged inadequate enquiry, which does not justify revision u/s 263. Further, all issues were already settled in favour of the assessee in its own earlier years by ITAT, and the AO had adopted one of the legally permissible views. Relying on binding precedents of the Supreme Court in Max India Ltd. and Malabar Industrial Co. and recent SC ruling in V-Con Integrated Solutions, Tribunal held that PCIT cannot invoke section 263 merely to direct fresh verification or substitute his opinion. As the twin conditions of “erroneous” and “prejudicial to revenue” were not satisfied, the revision order was quashed and the assessee’s appeal was allowed.
