PCIT cannot exercise revision jurisdiction under Section 263 twice on same issue after reassessment accepts assessee's claim

The ITAT Kolkata held that PCIT cannot exercise revision jurisdiction u/s 263 for a second time on the same issue merely because the reassessment resulted in acceptance of the assessee's claim. When an assessment order is set aside for de novo assessment, all issues remain open and the AO is not statutorily required to only enhance or assess the same income previously assessed. The PCIT failed to point out specific errors in evidence furnished by the assessee and passed a general order without examining details or considering submissions. The deeming provisions under Finance Act 2015 were not applicable to AY 2012-13. The revision order was set aside in favor of the assessee.

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Issues Involved:
1. Condonation of Delay
2. Validity of Revision Order u/s 263
3. Examination of Share Capital and Premium
4. Jurisdiction of PCIT in Second Revision

Condonation of Delay:
The appeal was time-barred by 1722 days. The assessee explained that the impugned order dated 12.03.2019 was not served upon them, and they only became aware of it after receiving a subsequent assessment order. The delay was further justified by the Covid Pandemic. Considering these submissions, the delay in filing the present appeal was condoned.

Validity of Revision Order u/s 263:
The assessee contested the validity of the revision order passed by the PCIT. The original assessment u/s 143(3) was framed by the Assessing Officer (AO) on 24.03.2015, making an addition of Rs. 14,26,00,000/- under section 68 as unexplained income. The PCIT observed that the AO made this addition without examining the evidence provided by the assessee. Consequently, the PCIT set aside the original assessment order for de novo assessment, directing the AO to specifically examine the source of share application money, identity of investors, and genuineness of the transaction.

Examination of Share Capital and Premium:
The AO, following the PCIT's direction, re-examined the details and evidences furnished by the assessee and concluded that the assessee had successfully discharged its onus. However, the second PCIT again set aside the second assessment order, holding that the AO failed to make proper and independent enquiries. The PCIT emphasized that any order subsequent to u/s 263 must favor the revenue, either by enhancing the assessed income or maintaining it with enhanced enquiries.

Jurisdiction of PCIT in Second Revision:
The Tribunal found that the exercise of second revision jurisdiction by the PCIT on the same issue was not justified. The Tribunal noted that the original scrutiny assessment was carried out on the issue of "large share premium received," and the AO had verified the necessary details and evidences furnished by the assessee. The Tribunal emphasized that merely because the assessment resulted in acceptance of the assessee's claim, it cannot be a ground for exercising revision jurisdiction for the second time. The Tribunal held that there must be finality to the proceedings, and the assessment cannot be kept open in perpetuity.

Conclusion:
The Tribunal quashed the impugned order of the PCIT, holding that the second revision jurisdiction was exercised without justification. The appeal of the assessee was allowed.

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