TaxTMI 
TaxTMI 
TaxTMI 
2026 (2) TMI 155
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.... revising and setting aside the Assessment Order u/s section 263 of the Income Tax Act, for an issue which was the sole reason for the selection of scrutiny under CASS for Limited Scrutiny and the same has been verified in-depth by the AO. 2. The PCIT has erred in laws and facts by revising and setting aside the Assessment Order u/s section 263 of the Income Tax Act, by invoking Explanation 2 to the said Section, despite the same was not mentioned in the hearing notice issued and no opportunity of hearing was provided to the Assessee qua the application of Explanation 2 3. The appellant reserves the right to add, amend, modify, or alter any ground of appeal during the course of the appellate proceedings. 3. The brief fa....
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....se entities were not carrying on genuine political or charitable activities in accordance with their stated objects. On this basis, the Principal CIT formed a prima facie view that the deduction of Rs. 30,00,000/- claimed under section 80GGC in respect of donations to these three entities was not genuine and ought to have been disallowed by the Assessing Officer. According to the Principal CIT, failure to disallow this amount resulted in underassessment of income to the extent of Rs. 30,00,000/-, thereby causing prejudice to the interests of the Revenue. 5. Accordingly, a show cause notice under section 263 of the Act dated 29.01.2025 was issued to the assessee, calling upon her to explain as to why the assessment order dated 30.08.2022 ....
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....rify the genuineness of the donations. The Principal CIT observed that although some inquiry may have been made, the Assessing Officer had not examined the issue in its entirety and had failed to verify the genuineness and eligibility of the political parties to whom the donations were claimed to have been made. Relying on the decision of the Hon'ble Supreme Court in the case of BSES Rajdhani Power Ltd. v. Pr. CIT, the Principal CIT held that non-examination of the issue in respect of the entire claim constituted an error which could be corrected under section 263 of the Act. 7. The Principal CIT elaborated on the scope and object of section 263, emphasizing that the provision empowers the Commissioner to revise an assessment order if it....
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.... case of Ahmedabad ITAT in Vitthaldas Nathubhai Shah vs. Principal Commissioner of Income-tax [2025] 178 taxmann.com 632 (Ahmedabad - Tribunal), wherein ITAT held that where assessee claimed deduction under section 80GGC for donation to a political party and Assessing Officer, after verifying supporting documents and evidences, accepted claim in assessment, but PCIT invoked section 263 solely due to a later search on political party with no direct incriminating material against assessee, assumption of jurisdiction for revision was unsustainable in law. 11. In response, the Ld. DR placed reliance on the observations made by the Principal CIT in his order. 12. We have heard the rival contentions and perused the material on record. 13....
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....ies under section 80GGC of the Act. 15. On a careful reading of the assessment order, we find that although general details and documents were called for under Chapter VI-A, there is nothing on record to show that the Assessing Officer made any meaningful or effective inquiry into the genuineness of the political parties in question or examined whether the donations were real, lawful and eligible for deduction. Mere calling for donation receipts and bank statements, without examining glaring inconsistencies and without verifying the status and activities of the donee political parties, cannot be equated with a proper and complete inquiry. The failure of the Assessing Officer to examine the issue in its entirety has resulted in allowance ....