PCIT must Address Documents Submitted During Assessment in its Revisionary Proceedings: ITAT [Read Order]
ITAT held that the revisionary powers under Section 263 must be exercised judiciously, ensuring proper examination of all evidence
![PCIT must Address Documents Submitted During Assessment in its Revisionary Proceedings: ITAT [Read Order]](https://www.taxscan.in/wp-content/uploads/2025/05/opportunity-to-produce-necessary-documents-AO-for-verification-would-meet-the-ends-of-justice-ITAT-TAXSCAN.jpg "PCIT must Address Documents Submitted During Assessment in its Revisionary Proceedings: ITAT [Read Order]")
In a recent ruling, the Rajkot bench of the Income Tax Appellate Tribunal (ITAT) held that the Principal Commissioner of Income Tax (PCIT) must address documents submitted during assessment in its revisionary proceedings under section 263 of the Income Tax Act,1961 . The tribunal held that a revision order passed without considering the available records cannot be sustained. The...
In a recent ruling, the Rajkot bench of the Income Tax Appellate Tribunal (ITAT) held that the Principal Commissioner of Income Tax (PCIT) must address documents submitted during assessment in its revisionary proceedings under section 263 of the Income Tax Act,1961 . The tribunal held that a revision order passed without considering the available records cannot be sustained.
The assessee, Dhwani Finserve Pvt. Ltd., engaged in financial services and received loans from four companies. During the assessment, the assessee submitted PANs, audit reports, ITRs, bank statements, and loan confirmations to validate these transactions. The AO accepted these without deeper scrutiny.
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Later, the PCIT invoked revisionary power under section 263 of the Income Tax Act, 1961, holding the AO’s order erroneous and prejudicial to revenue due to inadequate examination of loan transactions.
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The PCIT thus set aside the AO's order and directed a fresh examination of these loan transactions with proper verification of all relevant documents. This revisionary order led the assessee to appeal before the tribunal.
The counsels for the assessee, Naimish Vayawala and Bhavik Nagoari, argued that the conduct of PCIT was unjustifiable.
The assessee submitted PAN, ITRs, bank statements, and confirmations of lenders during Section 263 proceedings, but the PCIT neither commented on them nor examined their relevance. Instead, the PCIT asked for additional documents.
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Meanwhile, Sanjay Punglia, counsel for the revenue, opposed the claims of the assessee.
The revenue counsel countered that the PCIT accurately identified gaps and that the AO had neglected to furnish important details (like loan terms and security). However, they conceded to a remand if the ITAT deemed it necessary.
After hearing both sides, the bench, led by Dinesh Mohan Sinha (Judicial Member) & Dr. Arjunlal Saini (Accountant Member) examined the submissions made by both parties.
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The bench observed that while the PCIT pointed out the absence of certain key documents in the assessment order, it failed to consider or evaluate the documents the assessee submitted during the proceedings under Section 263 of the Act.
Citing CIT v. Infosys Technologies Ltd. (2012), the tribunal held that this approach violated principles of natural justice. The bench therefore set aside the PCIT’s order and remanded the matter to PCIT, directing it to re-examine the assessee’s submissions.
To Read the full text of the Order CLICK HERE
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