TaxTMI 
TaxTMI 
2026 (8) TMI 1763
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.... from the assessment order dated 27.02.2024 passed u/s. 143(3) r.w.s. 144B of the Act, for the Assessment Year (AY) 2022-23. 2. The effective issue involved in the present appeal is whether the Ld. PCIT was justified in invoking the revisionary jurisdiction u/s. 263 of the Act without satisfying the mandatory twin conditions that the assessment order was erroneous insofar as it was prejudicial to the interests of the Revenue, and in holding that the loss arising on sale of Non-Performing Assets (NPAs) constituted a capital loss not allowable as a business loss. 3. Brief facts of the case are that assessee, a co-operative bank, filed its return of income for the A.Y. 2022-23 on 06.11.2022 declaring 'Nil' income. The case was se....
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....rds and noticed that assessee had claimed a deduction of Rs. 14,71,09,400/- on account of loss arising from the sale of NPAs to M/s. Onkara Asset Reconstruction Pvt. Ltd. According to the Ld. PCIT, no specific enquiry had been conducted by the Ld. AO regarding the allowability of the said claim. Accordingly, a show-cause notice u/s. 263 of the Act was issued calling upon the assessee to explain why the assessment order should not be revised. After considering the assessee's reply, Ld. PCIT held that the assessment order dated 27.02.2023 passed u/s. 143(3) r.w.s. 144B of the Act was erroneous insofar as it was prejudicial to the interests of the Revenue. Consequently, he set aside the assessment order with a direction to the Ld. AO to fr....
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....e Revenue. The impugned order has merely directed the Ld. AO to conduct a fresh enquiry, which amounts to initiation of fishing and roving enquiry and this exercise is not permissible u/s. 263 of the Act. He further submitted that Ld. PCIT, in paragraph 5.1.1 of the impugned order dated 30.03.2026, has accepted that loans and advances made by the assessee-bank do not constitute capital assets and that any gain or loss arising on their transfer would not be on capital account. Referring to the decision of this coordinate bench in assessee's own case for the A.Y. 2015-16 in ITA No. 119/NAG/2020, learned counsel submitted that a similar deduction was allowed by the Ld. CIT(A), which was confirmed by the ITAT by dismissing the department's appe....
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.... section 263 of the Act. He submitted that Explanation 2(a) to section 263 specifically provides that an order passed without making enquiries or verification which should have been made shall be deemed to be erroneous insofar as it is prejudicial to the interests of the Revenue. Ld. DR further argued that Ld. PCIT has not decided the issue on merits but has merely restored the matter to the Ld. AO for proper verification and fresh adjudication after granting adequate opportunity to the assessee. Therefore, the order passed u/s. 263 is fully justified and deserves to be upheld. 6. We have heard rival contentions of both the parties and perused the material available on record. The short issue arising for our consideration is whether Ld. ....
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....ncome, audited financial statements, tax audit report, details of deductions claimed, purchase and sale of securities, RBI licence, cash flow statement, details of interest received and paid, bank accounts and other relevant documents. After considering the material so furnished, the Ld. AO completed the assessment u/s. 143(3) r.w.s. 144B of the Act accepting the returned income. Merely because the assessment order does not discuss the issue in detail cannot lead to the conclusion that no enquiry was conducted. 6.2 It is further manifestly clear that the assessee had placed all the relevant facts not only before the Assessment Unit but also before the Ld. PCIT during the revision proceedings. The assessment itself has been carried out in....
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....cial discipline, stare decisis and judicial consistency. The authorities subordinate to the Tribunal are duty-bound to follow the decisions of the Tribunal unless the same are reversed or stayed by a superior judicial forum. The revisionary jurisdiction u/s. 263 cannot be invoked to indirectly unsettle or circumvent a binding decision of the Tribunal. We further note that Ld. PCIT has not recorded any categorical finding demonstrating that the claim of loss was legally inadmissible. Instead, he has merely directed the Ld. AO to conduct a fresh enquiry. It is well settled law that section 263 does not permit the Commissioner to set aside a completed assessment merely for making a fishing or roving enquiry in the absence of a finding that ass....