AI Drafter 
TaxTMI 
TaxTMI 
2026 (5) TMI 1488
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....ct issues have not been examined properly by Assessing Officer during course of assessment proceedings. 3. That, on the facts and in circumstances of the case as well as law on the subject, the learned Pr. CIT has erred in passing the order u/s. 263 by invoking Explanation 1 and 2 of Section 263 of the Act, although the assessment order passed u/s. 147 r.w.s 143(3) of the I. T. Act, 1961 was neither erroneous nor prejudicial to the interest of the revenue. 4. That on the facts and circumstances of case and in law, PCIT, Nagpur -1 has not assumed proper jurisdiction to revise order passed by the A.O. u/s 147 where assessee being an eligible assessee to avail benefit of VSV scheme 2024, filed an application in Form 1 on 23/01/2025 and awaited Form 2 from PCIT. Thus, the notice issued u/s 263 after filing of Form 1 under VSV scheme is bad in law. 5. That on the facts and circumstances of case and in law, PCIT, Nagpur -1 has erred in invoking Section 263 to revise the reassessment order for not applying section 56(2) (vii) (b) of the Income Tax Act on purchase of property, ignoring the fact that said property is a business purchase of assessee and section 56(....
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....om the DVO was not received within the statutory time limit available for completion of reassessment proceedings and the matter was getting time-barred, the Assessing Officer proceeded to complete the assessment under section 147 read with section 144B of the Act by making an addition of Rs. 87,61,500/- on account of the difference between the sale consideration disclosed by the assessee and the market/stamp duty value of the properties sold. Subsequently, upon receipt of the valuation report from the DVO, the Assessing Officer passed a rectification order under section 154 read with section 147 of the Act, wherein the earlier addition was recomputed and restricted to Rs. 9,97,444/- under section 43CA of the Act based on the valuation determined by the DVO. 4. On examination of the assessment records, Ld. PCIT observed that Faceless Assessing Officer (FAO) had failed to examine and invoke the provisions of section 56(2)(vii)(b) of the Act in respect of purchase of immovable property by the assessee. The Ld.PCIT noticed that assessee had purchased immovable property for a consideration of Rs. 1,40,00,000/-, whereas the stamp duty valuation of the said property was Rs. 1,92,08,000....
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....d by the Assessing Officer under section 147 r.w.s. 144B dated 29.03.2023 and rectification order passed under section 154 r.w.s.147 dated 26.04.2024 were passed after examining the details and documentary evidences furnished by the assessee during the reassessment proceedings. During the reassessment proceedings, the Assessing Officer specifically called for details relating to purchase and sale of immovable properties. In response thereto, assessee furnished copies of registered sale deeds, purchase deeds, bank statements, Form No.26AS and other supporting evidences. Thus, it cannot be said that the Assessing Officer passed the reassessment order without inquiry or verification. Ld.PCIT merely alleged inadequate inquiry on the part of the Assessing Officer. However, revision under section 263 cannot be invoked merely because the PCIT holds a different opinion or believes that further inquiry ought to have been conducted. Once the Assessing Officer had examined the issue during reassessment proceedings and adopted one of the possible views, the order cannot be treated as erroneous merely because the Ld. PCIT does not agree with such view. The assessee submitted before the Assessin....
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....e to be assessed under the head "Income from Other Sources". It was contended that reassessment order as well as rectification order were completely silent regarding applicability of section 56(2)(vii)(b) of the Act. No inquiry whatsoever was conducted by the Assessing Officer on this issue and no finding was recorded in the assessment order. Ld.DR further submitted that Assessing Officer merely accepted the submissions of the assessee referring to provisions of section 56(2)(x), which admittedly were not applicable for the assessment year under consideration. Thus, the Assessing Officer failed to apply correct statutory provisions while completing reassessment. According to the Ld. DR, failure to conduct proper inquiry on an issue arising from assessment records itself renders the assessment order erroneous and prejudicial to the interests of the Revenue within the meaning of section 263 of the Act. The Ld. DR further submitted that Ld.PCIT had not made any addition directly but merely restored the matter to the file of the Assessing Officer for conducting proper verification and framing fresh assessment in accordance with law after providing opportunity to the assessee. Therefore....