Sameer Ramesh Vashi Vs PCIT (ITAT Mumbai)
PCIT revised the scrutiny assessment u/s 263, alleging that AO failed to properly examine the business loss of ₹1.24 crore & notional rent from a Greater Noida flat. Assessee contended that the assessment was a limited scrutiny, confined only to business loss & agricultural income, & that all queries were duly answered during assessment with supporting documents.
ITAT noted that AO had issued detailed notices u/s 142(1) seeking explanations for each expense item & for business loss claim, which Assessee had fully substantiated through bills, vouchers, & ledgers. Hence, the issue was thoroughly verified.
On the deemed rental income, ITAT held that since this aspect was outside the scope of limited scrutiny, the PCIT had no jurisdiction to invoke s.263 on that issue. Further, PCIT failed to record how AO’s order was both erroneous & prejudicial to revenue as mandated by Malabar Industrial Co. Ltd. v. CIT (243 ITR 83, SC) & DG Housing Finance (Del HC).
Held: AO’s enquiry was proper; limited scrutiny bars revision on unrelated issues; PCIT’s s.263 order quashed; appeal allowed in full.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
This appeal filed by the assessee is against the revisionary order of PCIT, Mumbai–17, vide order no. ITBA/COM/F/17/2024-25/1070374871(1), dated 14.11.2024 passed u/s. 263 against the assessment order by National e-Assessment Centre, Delhi, u/s.143(3) r.w.s. 143(3A) and 143(3B) of the Income-tax Act, 1961 (hereinafter referred to as the “Act”), dated 14.03.2023 for AY 2018-19.
