Birmole Medical Foundation Trust Vs CIT (ITAT Pune)
Pune ITAT Quashes Section 263 Revision; Detailed AO Enquiry Bars Revision on Mere Change of Opinion
The Pune ITAT quashed the revision order passed under section 263, holding that where the Assessing Officer had conducted specific and detailed enquiries on the issue under scrutiny and taken a plausible view, the Commissioner could not invoke revisionary jurisdiction merely because he felt further enquiry was warranted.
The assessee, Birmole Medical Foundation Trust, had advanced ₹1.03 crore to its trustee, Dr. Bhagwan Birmole, towards the proposed purchase of flats intended for expansion of medical facilities. The CIT (Exemption) invoked section 263 on the ground that the Assessing Officer had failed to examine the applicability of sections 13(1), 13(2) and 13(3) relating to transactions with specified persons and that the assessment order was therefore erroneous and prejudicial to the interests of the Revenue.
The Tribunal, however, found that during the original assessment proceedings the Assessing Officer had issued specific notices under section 142(1) calling for details regarding the payment to the trustee, ownership of the flats, approvals, valuation, and the purpose of the transaction. The assessee had furnished detailed replies, supporting documents, agreements, valuation details and explanations regarding the proposed acquisition.
The Tribunal noted that the transaction was fully disclosed in the books of both parties, was carried out through banking channels, and was subsequently cancelled due to the Covid-19 situation, following which the amounts were refunded. It was also brought on record that compensation/interest was paid by the trustee to the trust in later years. The Tribunal held that the Assessing Officer had consciously examined the issue and formed a view after considering all relevant material.
Relying on the Bombay High Court decision in Chandan Magraj Parmar, the Tribunal reiterated that an assessment order cannot be treated as erroneous merely because the Commissioner believes a deeper enquiry should have been made. Once necessary enquiries have been conducted and a possible view has been adopted, revision under section 263 is not permissible.
Accordingly, the Tribunal held that the assessment order was neither erroneous nor prejudicial to the interests of the Revenue, quashed the section 263 proceedings and restored the original assessment order.
FULL TEXT OF THE ORDER OF ITAT PUNE
This appeal filed by the assessee is directed against the order dated 30.03.2025 passed by Ld. CIT, Exemption, Pune for the assessment year 2020-21.
