The Income Tax Appellate Tribunal ( ITAT ), New Delhi, has recently in an appeal filed before it by an assessee, held that the Commissioner Of Income Tax (CIT) cannot assume revisional jurisdiction under section 263 of the Income Tax Act to the extent of substituting his subjective view in the place of the judicious view of the Assessing Officer (A.O).
The aforesaid observation was made by the Tribunal when an appeal was preferred before it by the assesse Rits Jewellers Pvt. Ltd, against the order dated 29/03/2019 passed u/s 263 of the I.T Act (“Act” for short) by the Principal Commissioner of Income Tax, Faridabad, for Assessment Year 2014-15.
The grounds of the assessee’s appeal being that the Commissioner of Income Tax (CIT) erred in law and on facts in assuming jurisdiction u/s 263 of the Act in order to substitute his subjective view in place of judicious view taken by the ld. AO on the same set of facts/evidences on record, by holding that the order passed u/s 143(3) of the Act dated 19.04.2016 was erroneous and prejudicial to the interests of revenue, it was submitted by the assesse that PCIT has committed error in observing that ‘no verification was made during the course of the assessment by the A.O’.
The assessee further adding to its contention that the PCIT failed to appreciate fact that the assessment order was passed after due enquiry and after verification of the materials produced by the assessee and also the material available on record based on the enquiry, the Tribunal observed as below:
“In the present case the Assessing Officer has made all the inquiries and after verifying the documents/ material on record passed a reasoned Assessment Order. Therefore, the Commissioner does not have any locus standi to make further inquiry.”
“The decision of the Hon’ble Supreme Court in case of CIT vs. Max India Ltd 295 ITR 282, Malabar Industrial Co. Ltd. vs. CIT 243 ITR 83 are aptly applicable in the present case as the Hon’ble Apex Court wherein it is held that Section 263 has to be read in conjunction with the expression “erroneous” order passed by the Assessing Officer”, it added.
Subsequently, allowing assessee’s appeal while setting aside the Principal Commissioner of Income Tax’s order, the Tribunal concluded:
“Therefore, order u/s 263 of the Act in present appeal is not justified”
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