A mere difference in opinion is not sufficient to invoke Section 263: ITAT Ahmedabad
Recently, ITAT Ahmedabad in ITA No. 200/Ahd/2023 in the case of Hardevsingh P. Chudasama v. PCIT-3, Ahmedabad decided on 23.09.2024 has quashed the PCIT Revision by mentioning that second View Not Permissible Under Section 263.
Let us have a Short Overview of the case:
The assessee, proprietor of Bhavani Transport, had deposited ₹47.69 lakhs in cash during the demonetization period. Assessment was framed u/s 144, with AO making an addition of ₹44.07 lakhs u/s 69A. Later, PCIT invoked Section 263, alleging AO failed to add total deposits (₹6.78 crores) including cash and bank transfers, as unexplained.
Issue Before the Court was whether the revision under Section 263 was valid when AO had already examined the cash deposits and taken a view.
The Tribunal found that:
AO had considered the cash deposits and made specific additions after inquiry.
Bank accounts belonged to a partnership firm (Bhavani Petroleum), in which assessee was a partner.
PCIT’s revision order merely substituted his own view in place of the AO’s, without showing the original order to be erroneous and prejudicial. A mere difference in opinion is not sufficient to invoke Section 263.
Thus, the ITAT quashed the PCIT’s revision order, holding it to be unsustainable.
Key Takeaway:
Section 263 cannot be invoked to take a second view.
AO’s inquiries, if made and reasons recorded, preclude revision.
Protective/substantive addition logic must be based on clear factual/legal error.
The copy of the order is as under:
