Bipinkumar Rambhai Patel Vs PCIT (ITAT Ahmedabad)
Section 263 Cannot Substitute AO’s View: Revision Quashed Where Reopening Issue Was Examined
The Ahmedabad “B” Bench of the Income Tax Appellate Tribunal allowed the assessee’s appeal and quashed the revision order u/s 263 for AY 2015-16, holding that the Principal Commissioner impermissibly sought to substitute his own view for that of the Assessing Officer.
The reassessment had been reopened solely on alleged accommodation entries of ₹95.09 lakh. During reassessment, the AO called for details, examined replies, and considered affidavits/disclosures wherein the alleged entry operator owned up the transactions, including disclosures before the Settlement Commission. The AO thereafter consciously accepted the returned income without making additions.
The Tribunal held that absence of an elaborate discussion in the assessment order does not imply lack of enquiry, especially when records show application of mind. A different opinion of the PCIT, even if based on audit objections, cannot justify revision when the AO has taken a plausible view after enquiry. Consequently, the reassessment order was neither erroneous nor prejudicial to the interests of the Revenue.
Accordingly, the revision u/s 263 was set aside and the assessee’s appeal was allowed in full.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
This appeal has been filed by the assessee against the order passed by the Ld. Principal Commissioner of Income-tax, Ahmedabad-1 (hereinafter referred to as “PCIT” for short), dated 16.03.2024, in exercise of his revisionary powers under Section 263 of the Income-tax Act, 1961 [hereinafter referred to as “the Act”], for the Assessment Year (AY) 2015-16.
