THE AKOLA URBAN CO-OPERATIVE BANK LTD.,AKOLA vs. DCIT/ACIT, AKOLA CIRCLE, AKOL, AKOLA

ITA 534/NAG/2026Status: DisposedITAT Nagpur10 August 2026AY 2022-2312 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the PCIT wrongly invoked Section 263 as the AO had conducted due enquiries and accepted the assessee's claim. Furthermore, a coordinate bench had already allowed similar loss as business loss in the assessee's own case, creating a binding precedent.

What were the facts?

The assessee, a cooperative bank, declared 'Nil' income. The PCIT invoked revisionary powers under Section 263, holding that the assessment order was erroneous and prejudicial to revenue as loss on sale of NPAs was treated as business loss instead of capital loss. The PCIT directed a fresh assessment.

What were the issues?

Whether the PCIT was justified in invoking Section 263 without satisfying the twin conditions of the assessment order being erroneous and prejudicial to revenue. Whether loss on sale of NPAs is a business loss or capital loss.

Which sections of the Income-tax Act were involved?

Section 263,Section 143(3),Section 144B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, NAGPUR BENCH :: NAGPUR

For Appellant: Shri S.G. Gandhi, CA
For Respondent: Shri Pankaj Kumar, CIT-DR
Hearing: 10.06.2026Pronounced: 10.08.2026

PER KHETTRA MOHAN ROY, AM:

This appeal filed by the assessee is directed against the order of Learned Principal Commissioner of Income Tax-1, Nagpur (for short, “PCIT”), dated 30/03/2026 passed under section 263 of the Income Tax Act, 1961 (for short, “Act”) which is emanating 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 juri iction 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 sal

The order continues below.

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