Agarwals Health Care Limited Vs PCIT (ITAT Chennai)
ITAT Chennai held that invoking the revisionary powers under section 263 of the Income Tax Act without giving any reasoning for setting aside the assessment order and merely directing AO verification without any basis is unjustifiable.
Facts- The appeal of assessee is as against the revision order passed by the PCIT u/s.263 of the Act contesting that he failed to satisfy the twin conditions i.e., for order passes by the AO u/s.143(3) of the Income Tax Act, is erroneous insofar as prejudicial to the interest of Revenue, which is sine qua non to invoke the powers u/s.263 of the Income Tax Act
Conclusion- The plain language of the provision is more than abundantly clear that it is not every error or mistake that should induce the PCIT to resort to exercise the powers u/s.263 of the Act. Where the factual matrix shows that it is a marginal situation and when by a careful and cautious judgment the AO has considered the issue in hand, the exercise of the power u/s.263 of the Act by the PCIT is not proper. For invoking the revisionary powers u/s.263 of the Act, it is necessary for the PCIT to state in what manner he consider the assessment order as erroneous and prejudicial to the interest of Revenue and what the basis and material for such conclusion.
