TaxTMI 
TaxTMI 
2026 (9) TMI 1984
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....ntial questions of law, arising out of the order dated 31st December, 2025 passed by the Income Tax Appellate Tribunal (for short 'the Tribunal'), Rajkot Bench, Rajkot in ITA No.271/RJT/2025 for Assessment Year 2021-22: "1. Whether, on the facts and in the circumstances of the case, the Hon'ble Income-tax Appellate Tribunal was correct in law in holding that the revisionary jurisdiction under section 263 of the Income-tax Act, 1961 could not be invoked, notwithstanding the failure of the Assessing Officer to carry out the inquiry which was required to be made, as contemplated under Explanation 2(a) to section 263(1)? 2. Whether the Honble Income-tax Appellate Tribunal erred in law in holding that the assessment order passe....
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.... held that the arguments that the Assessing Officer collected details/information during the assessment proceeding, does not hold good any more. Therefore, in the opinion of the PCIT, the Assessment Order was passed without making inquiries/verifications, which should have been done, but not done and hence, the order was held to be erroneous and prejudicial to the interest of Revenue. The PCIT therefore, directed the Assessing Officer to pass a fresh Assessment Order, after making proper inquiries and verifications in relation to such transactions. 3.3. Being aggrieved by the order passed by the PCIT, the assessee preferred an Appeal before the Tribunal. The Tribunal, after considering the facts of the case as well as the order passed by....
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.... : "16. We have considered submissions of both the parties. From the above assessee's facts, it is abundantly clear that during the assessment stage, the Assessing Officer asked the assessee to furnish the details and documents which are placed in paper book. In response, the assessee submitted reply which is placed at paper book. The assessee, during the assessment stage, has submitted books of accounts, bank statements, details of loan providers, copy of balance sheet and income tax return of loan providers. Even, loan providers also furnished confirmation and necessary documents before the assessing officer in response to notice of the assessing officer. Thus, all the documents, details and the explanations required by the Asses....
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....nsideration the grievance of the PCIT that proper inquiry was not conducted, as observed by the PCIT in paragraph No.12 of the revisional order, as under : "12. In the light to above discussion I am, therefore, of the opinion that the assessment order passed by the A.O. u/s.143(3) r.w.s. 144B of the Act dated 29.11.2022 is erroneous and prejudicial to the interest of the Revenue. By virtue of the powers vested in me u/s. 263 of the I T Act, I hereby set-aside the order u/s. 143(3) r.w.s. 144B of the Income-tax Act, 1961 dated 29.11.2022 on the issue(s)discussed above which relates to unsecured loans totalling to Rs. 2,34,60,000/- received which attract the provisions of Section 68 of the Act. The AO is directed pass a fres....
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....equired under the law. 5. The Tribunal referred to the decision of the Hon'ble Delhi High Court in case of CIT Versus Sunbeam Auto Ltd. reported in [(2010) 332 ITR 167] wherein, it is held that if there was any inquiry, even inadequate, that would not by itself, give occasion to the Commissioner to pass an order under Section 263 of the Act, merely because the Commissioner has different opinion in the matter and that only in cases where there is no inquiry, the power under Section 263 of the Act can be exercised. The Tribunal also referred to the decision of the Hon'ble Apex Court in case of Malabar Industries Co. Ltd. (Supra), wherein, it was held as under: "The phrase "prejudicial to the interests of the Revenue" has to be rea....