Vimal Jagdishprasad Agarwal Vs PCIT-3 (ITAT Ahmedabad)
ITAT Ahmedabad reviewed an appeal by Vimal Jagdishprasad Agarwal concerning an order passed by the Principal Commissioner of Income Tax (PCIT) under Section 263 of the Income Tax Act for Assessment Year 2014-15. The dispute originated from an assessment under Section 143(3) read with Section 147, which included an addition of ₹92 lakh for accommodation entries. The PCIT deemed the assessment erroneous and prejudicial to revenue interests, directing the Assessing Officer (AO) to conduct a fresh, de novo assessment to evaluate issues, including commission payments on the entry, estimated at 1-3%. The appellant contended that such broad directions exceeded the PCIT’s authority under Section 263, which should focus only on the identified issue of commission.
The ITAT upheld the PCIT’s revision order but restricted the AO’s scope of reassessment strictly to determining the commission on the ₹92 lakh entry, which could range between ₹92,000 and ₹2.76 lakh. The Tribunal emphasized that the inquiry should not extend beyond this specific aspect. By partially allowing the appeal, the ITAT ensured clarity and proportionality in the reassessment process while addressing procedural lapses. The decision highlights the balance between revenue protection and the fair application of revisional powers.
