Revisional Order cannot passed just because the decision of the Assessing Officer is not to the liking of PCIT: ITAT [Read Order]

The Income Tax Appellate Tribunal (ITAT), Delhi bench has held that the revisional jurisdiction under section 263 of the Income Tax Act, 1961 cannot be passed merely because the decision of the Assessing Officer is not to the liking of PCIT.

The Assessing Officer, during the course of assessment proceeding has made a number of queries to the assessee on various issues. After conducting detailed inquiry and issuing questionnaire, the Assessing Officer has ultimately completed the assessment making some additions and disallowances. Subsequently, the Principal CIT invoked the revisional jurisdiction under section 263.

The assessee brought the issue before the Tribunal.

The Tribunal comprising Shri Saktijit Dey, Judicial Member and Dr. B.R.R. Kumar, Accountant Member found that it is not a case where the Assessing Officer has passed the order mechanically without any inquiry and proper application of mind.

It was also observe that from the issues noted by revisionary authority, it is very much evident that in course of assessment proceeding, the Assessing Officer, indeed, had inquired into all these issues and being satisfied with the explanation/submission of the assessee, has not made any addition/disallowance. What the revisionary authority by exercising power under section 263 of the Act desires is to substitute his own opinion/decision with that of the Assessing Officer.

Quashing the Revisional order, the Tribunal further said that “In fact, the revisionary authority himself has gone into the allowability or otherwise of each item of expenditure claimed by the assessee. This, in our view, is not the intent and purport of section 263 of the Act. It is a fact on record that on all the issues raised by the revisionary authority in the show-cause-notice issued under section 263 of the Act, the Assessing Officer has conducted inquiry in course of the assessment proceeding and has decided those issues applying his own wisdom. Only because such decision of the Assessing Officer is not to the liking of learned PCIT, it cannot be said that the assessment order is erroneous and prejudicial to the interest of Revenue. It is further relevant to observe, in response to the show-cause-notice issued under section 263 of the Act, the assessee has furnished a detailed reply which has been extensively reproduced in the impugned order of learned PCIT. However, there is no speaking order of learned PCIT on various submissions made by the assessee, not only on the jurisdictional aspect but also on merits.”

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