TaxTMI 
TaxTMI 
2026 (3) TMI 804
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.... an individual, a search action was carried out in the case of the assessee on 24.11.2022. Thereafter, the case of the assessee was re-opened by issue of notice u/s 147 of the Act. The reassessment order was passed wherein income declared by the assessee is accepted by AO. Thereafter, based on the information provided by the AO himself, Ld. PCIT initiated revision proceedings u/s 263 of the Act and the ld. PCIT hold the assessment order as erroneous and pre-judicial to the interest of the Revenue and by invoking the provision of Explanation 2(a) of section 263 of the Act, has directed the AO to pass the assessment order afresh after making necessary inquiries and verification with respect to the unsecured loans taken during the year under a....
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.... all these details however, Ld. PCIT without pointing out any error in the said details filed nor any material brought on record, has hold the assessment order as erroneous and pre-judicial to the interest of the Revenue and invoked the provisions of Explanation 2() of section 263 which cannot be applied in the given facts of the case. He therefore, prayed for the cancellation of the revision order so passed u/s 263 of the Act. 6. Per contra, Ld. CIT DR vehemently supported the orders of the Ld. PCIT and submits that AO has passed the assessment order without even mentioning or utter a single word in the assessment order about the loans taken during the year under appeal by the assessee. As per, Ld. CIT DR, no proper inquiries/investigat....
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...., their bank statements, financial statements etc. in support of establish their identity, creditworthiness and genuineness of the transactions. All these documents are placed at pages 49 onwards of the Paper Book. 8. It is further observed that assessee during the course of assessment proceedings before Ld. PCIT, again filed all these details vide reply dated 07.10.2025, placed at pages 5 to 11 of the Paper Book. Ld. PCIT in its order, reproduced the reply filed by the assessee, however, observed that AO has made "Inadequate inquiries" or "Lack of inquiries" with respect to loan creditors without appreciating the fact that assessee has filed all the relevant details including their complete addresses alongwith assessment particulars etc....
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....or cracking would render them useless. In any case the longevity of the moulds and dies is not substantial as held by the Tribunal and they have to be replaced frequently to ensure quality of the product. Moreover, the moulds have to be produced to suit the requirements of the particular customer and after the order is met, they become useless and ultimately have to be destroyed to prevent misuse or manufacture of fakes. It has also been found by the appellate authorities that the expenditure on replacement of dies and moulds was earlier allowed by the income tax authorities as revenue expenditure. These are factual findings recorded by the Tribunal which are not disputed before us by the revenue on the basis of any evidence or material. It....
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....sions under Section 263 of the Act or not. We note that the learned PCIT was of the view that the investment made by the assessee in funds was not equity-oriented funds and once these are not equity-oriented funds, these are not to be taxed under the special rate of taxation under Section 112A of the Act. We note that the assessee could explain before us that the funds are equity-oriented funds and we have given a clear finding in paragraph 6 of this order. We also find that the PCIT has not given a finding or has not observed that how these funds are not equity-oriented funds and without that, the PCIT cannot invoke the revisionary power. We are of the view that consideration of the PCIT as to whether an order is erroneous insofar as it is....
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....for any quasi-judicial order required to be made by a quasi-judicial authority. The necessary consequence of revision order is that while passing the order revising an order passed by a subordinate authority, the PCIT must record reasons in support of his conclusion that the order is revised being erroneous and that it would be prejudicial to the interest of the Revenue due to such errors. In case the PCIT does not indicate the reasons for invoking the provisions of Section 263, his order cannot be held to be valid. In the present case, the entire material in regard to all the funds and the properties where ALV was questioned by the PCIT, the assessee has produced relevant material and offered explanations in pursuance to the notices issued....