No Justification for Revisional Action Under Section 263 Based on Mere Opinion Divergence.
The assessee, Ganesh Srinivasan, a Senior Advocate, filed his return of income for AY 2020–21 under the cash system of accounting. The AO completed the assessment under Section 143(3) r.w.s. 144B after accepting the assessee’s explanation for the mismatch between professional receipts and TDS shown in Form 26AS. The PCIT later invoked Section 263, alleging that income of Rs. 1.76 crore corresponding to TDS of Rs. 17.66 lakh had not been offered to tax. The assessee explained that part of the income was not received due to disputes, and the rest was either offered in earlier or same year. Ignoring these explanations, the PCIT treated the assessment as erroneous and prejudicial to revenue and set aside the original order.
Tribunal’s Observations:
The Tribunal observed that “the Assessing Officer had considered this very issue during the assessment proceedings and made appropriate observations in the assessment order.”
It noted that “the discrepancy highlighted by the Ld. PCIT is merely a matter of reconciliation between AIR data and the return of income, which had been adequately addressed by the assessee.”
The ITAT emphasized that “there is no justification for invoking section 263 in the guise of a difference of opinion.”
It further held that “the Ld. PCIT has not brought on record any evidence indicating the presence of unaccounted income or any undisclosed bank account.”
Accordingly, the Tribunal concluded that “the revisionary order passed by the Ld. PCIT under section 263 is unsustainable in law and liable to be quashed.”
The copy of the order is as under:
