Revision jurisdiction and change of opinion in tax reassessment constrained where adequate inquiry existed; appeal allowed.

Revision jurisdiction was examined where a revising officer altered an assessment despite the assessing officer having conducted a detailed inquiry; the reviser's findings were treated as a mere change of opinion and thus beyond permissible revision. The distinction between lack of inquiry and merely inadequate inquiry was emphasized, with Explanation 2 held inapplicable because inquiry had been made. A coordinate bench decision supported the view that the matter was debatable; consequently the revisional exercise was improper and the assessee's appeal succeeded.

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Issues: (i) Whether the Principal Commissioner of Income-tax rightly invoked jurisdiction under section 263 of the Income-tax Act, 1961 to set aside the assessment made under section 147 r.w.s. 144B for A.Y. 2018-19 by treating long term capital gains as unexplained cash credit under section 68 and directing reassessment.

Analysis: The Tribunal considered the statutory requirements for exercise of revisionary jurisdiction under section 263, including the twin conditions that the assessing officer's order must be erroneous and prejudicial to the interest of revenue. The Tribunal examined whether the assessing officer had made adequate enquiries and applied his mind before concluding on the genuineness of screen-based, exchange-driven share transactions; whether the facts indicated mere change of opinion by the Commissioner; and the relevance of authorities holding that section 68 does not ordinarily apply to bona fide screen-based transactions where purchases/sales are routed through banking channels, demat delivery is shown and contract notes exist. The Tribunal also applied principles distinguishing lack of inquiry from inadequate inquiry and noted that the quantum issue was pending before the first appellate authority, all of which weighed against invoking section 263.

Conclusion: The revisionary order under section 263 is quashed and the appeal of the assessee is allowed; the PCIT's exercise of jurisdiction is held unsustainable because the assessing officer had made adequate enquiry and the revision amounted to a prohibited change of opinion and could not be sustained as erroneous and prejudicial to revenue.

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