PCIT lacks jurisdiction under Section 263 to revise assessment orders passed under Section 153A without ACIT approval

ITAT Indore quashed PCIT's revision order under Section 263 against an assessment order passed under Section 153A. PCIT sought revision claiming AO erroneously allowed cash payments and agricultural income exemption for assessee engaged in real estate business. ITAT held PCIT lacked jurisdiction to invoke Section 263 as the original assessment order was passed by ACIT with prior approval under Section 153D, requiring revised decision/directions from ACIT before any revision. Following precedent in Ramamoorthy Vasudevan case, ITAT allowed assessee's appeals and quashed the revision order.

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Issues Involved:
1. Revisional proceedings under Section 263 of the Income Tax Act initiated by the PCIT (Central) against the assessment orders passed under Section 143(3) r.w.s. 153A for A.Ys. 2011-12 & 2012-13.
2. Maintainability of revisional proceedings due to prior approval obtained under Section 153D of the Act.

Analysis:
Issue 1:
The appeals filed by the assessee challenged the orders passed by the PCIT (Central) under Section 263 of the Income Tax Act, revising the assessment orders passed by the ACIT (Central)-1, Indore under Section 143(3) r.w.s. 153A for the assessment years 2011-12 & 2012-13. The PCIT contended that the assessment order was prejudicial to the interest of revenue due to non-disallowance of certain expenses and exemption of agricultural income, considering the assessee's engagement in Real Estate business. The assessee argued against the revisional proceedings initiated by the PCIT, citing lack of jurisdiction and maintainability issues.

Issue 2:
The primary contention raised by the assessee was the lack of jurisdiction of the PCIT to exercise revisional powers under Section 263 of the Act, as the assessment order was passed under Section 143(3) r.w.s. 153A after obtaining prior approval from the ACIT (Central)-1, Indore under Section 153D. The assessee relied on judgments from various benches, including the Hon'ble Pune Bench and Hyderabad Bench, to support the argument that the PCIT's revisional powers were not applicable in this scenario. The Tribunal, after considering the arguments and precedents cited, concluded that the PCIT's order under Section 263 was unsustainable due to the absence of revised decisions or directions from the ACIT under Section 153D. The Tribunal quashed the impugned order under Section 263, following the precedent set by the Hon'ble Pune Bench.

In conclusion, the Tribunal allowed the assessee's appeals, emphasizing the importance of obtaining prior approval under Section 153D before revising assessment orders and highlighting the limitations on the PCIT's revisional powers in such cases. The judgment provided a detailed analysis of the jurisdictional aspects and maintainability of revisional proceedings under Section 263, ensuring a fair and just outcome for the assessee based on legal precedents and established principles of law.

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