Difference of opinion does not justify revision under Section 263: SLP of Revenue dismissed by SC
Recently, SLP of Revenue dismissed by SC by holding that the difference of opinion does not justify revision under Section 263. Originally, the tribunal has quashed Section 263 Revision in V-Con Case.
Let us have a Short Overview of the case:
The assessee, M/s V-Con Integrated Solutions Pvt. Ltd., succeeded before the Chandigarh ITAT (Vide ITA No. 232/CHD/2023) which quashed the revision order passed under Section 263 by the PCIT, Chandigarh-1.
The Tribunal found that the AO had conducted detailed inquiries regarding the deduction under Section 80JJAA, including verification of Form 10DA, PANs, salary credits, and statutory deductions (PF/ESI).
In relation to the issue of preference shares, the assessee had furnished ITRs, valuation reports, bank statements, and shareholder details in response to a structured questionnaire issued by the AO.
The Tribunal noted that the PCIT had merely alleged inadequate inquiry without identifying any specific failure. It held: “The PCIT has not given any specific finding… simply held the order erroneous by making general observation… which is not a valid ground.”
Concluding that a mere difference of opinion does not justify revision, the Tribunal held the PCIT’s action as unjustified and accordingly quashed the revision order.
The Revenue challenged the ITAT’s decision before the Hon’ble Supreme Court (Diary No. 13205/2025). The assessee once again defended its position successfully.
The Supreme Court, after condoning the delay, dismissed the SLP and upheld the ITAT’s order, stating: “This case does not involve a failure by the Assessing Officer to conduct an investigation.”
It emphasized: “Once the Assessing Officer carries out the investigation but does not make any addition, it can be taken that he accepts the plea and stand of the assessee.”
The Court drew a clear line: “There is a distinction between failure or absence of investigation and a wrong decision/conclusion… A wrong conclusion can be corrected on merits, not by way of a remand.”
Affirming the ITAT’s view, the Court held that invocation of Section 263 without a demonstrated failure of inquiry was impermissible, and hence, the Special Leave Petition was dismissed.
The copy of the order is as under:
