TaxTMI 
TaxTMI 
2026 (8) TMI 960
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....ficer ["AO"] to revise the assessment order passed under section 147 read with section 144B of the Act dated 24.03.2023, holding the same to be erroneous insofar as it was prejudicial to the interests of the Revenue. 02. Brief facts of the case are that the assessee filed its return of income for A.Y.2018-19 declaring total income of Rs. 77,750/-. Subsequently, on the basis of information relating to certain financial transactions allegedly involving accommodation entries amounting to Rs. 2,39,50,000/- during the relevant previous year, the assessment was reopened under section 147 of the Act. In response to the notice issued under section 148 of the Act, the assessee filed its return of income declaring the same income. During the reass....
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....sessee had furnished complete details regarding the purchases and sales and that the transactions were duly recorded in the books of account and routed through banking channels. The assessee also contended that the assessment order itself was already under challenge before the Ld. CIT(A)/NFAC and, therefore, the issue forming the subject matter of the appeal could not be revised under section 263 in view of Explanation 1(c) to section 263 of the Act. The Ld. PCIT, however, was not satisfied with the explanation furnished by the assessee and passed the impugned order under section 263 of the Act, setting aside the assessment order and directing the AO to re-examine the matter and pass a fresh order in accordance with law after providing reas....
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....out rejecting the books of account under section 145(3) of the Act and that the assessee had challenged the assessment order before the Ld. CIT(A). Therefore, the validity of the assessment order, which was already the subject matter of appellate proceedings, could not be revisited through proceedings under section 263 of the Act. The Ld. AR reliance was placed on the decision of the Hon'ble Gujarat High Court in the case of PCIT vs. Kutch District Cooperative Milk Producers Union Ltd. [2025],174 taxmann.com 868, affirming the Tribunal's decision reported in 2024, 159 taxmann.com 347, wherein it was held that a mere change of opinion on the basis of the very same material cannot justify exercise of jurisdiction under section 263 of the Act.....
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....urther enquiries were warranted. However, where the AO has examined the issue and adopted one of the possible views on the basis of the material available on record, the same cannot be characterised as an erroneous order merely because the Ld. PCIT prefers another view. The jurisdiction under section 263 of the Act can be exercised only when both the conditions, namely, that the order of the AO is erroneous and that it is prejudicial to the interests of the Revenue, are satisfied. An order cannot be revised merely because, in the opinion of the revisional authority, a more detailed enquiry ought to have been made, particularly when the record demonstrates that the AO had made enquiries and taken a conscious decision. We also find merit in t....