ARTI AGRAWAL, RAIPUR,RAIPUR vs. PCIT, BHOPAL, BHOPAL

In this case the Ld. PCIT had invoked revisionary jurisdiction and passed order under Section 263 of the Act dated 10.03.2026. The only ground of the PCIT holding the assessment order as erroneous so as to be prejudicial to the interest of the Revenue is that the assessee had sold Flat 104 to Sunita Agrawal on 17.01.2026 for Rs. 24,75,000/- with the Stamp Duty value difference of Rs. 3,25,976/- and Flat No. 502 to Rajat Agrawal on 20.05.2021 for Rs. 32,00,000/- with the SDV difference of Rs. 53,164/- and that the Assessing Officer did not make requisite verification in respect of these properties sold by the assessee. The PCIT held that the assessment order was erroneous and prejudicial to the interest of the Revenue.

At the time of hearing the Ld. Counsel brought to the notice of the Bench that both these points have been enquired by the Assessing Officer and found satisfactory through questionnaire as per Section 142(1) of the Act and also through separate show cause notices issued to the assessee

That against this show-cause the assessee furnished reply which is stamped and received by the Department dated 07.01.2024 in which the assessee submitted as follows: “b. Flat No. 104 (Sold On 17-06-2021) Sale Value: 2475000 43CA Value: 2468109 (Without considering GST) 43CA Value: 2751562 (With GST) Your honour it is humbly submitted that kindly not include GST in 43CA Value. The sale value of property Rs. 2475000/- is higher than Rs. 2468109/-. Alternatively, for the period upto 30.06.2021 the limit is 20% u/s 43CA if the same is considered than 2475000 X 120% = 297000 which is higher than Rs. 2751562.” 7. The Ld. Counsel further submitted for both these points emanating in the order under Section 263 necessary inquiry have been made by the Department and the assessee had also furnished reply. Therefore, the assessment framed is not erroneous and prejudicial to the interest of the Revenue. That when a plausible view has been adopted by the Assessing Officer while framing the assessment after recording due inquiry and where the assessee had also provided relevant submissions to the Department in such scenario it is not open for the PCIT to resort to revisionary jurisdiction under Section 263 of the Act for conducting roving inquiry. The Ld. CIT-DR also could not bring on record any specific evidence to suggest that there was satisfaction attained by the PCIT for invoking such revisionary jurisdiction. The Ld. CIT-DR therefore conceded that necessary enquiry were made on these two points by the Assessing Officer he relied on the findings of Ld. PCIT only. The Ld. Counsel for the

Having heard the submissions of the parties herein it is crystal clear that the Assessing Officer has conducted necessary inquiry regarding both the issues emanating in the order under Section 263 of the Act. The assessee had also provided answers to the queries raised by the Assessing Officer. There have been questionnaire through notice under Section 142(1) and also separate show-cause notice sent to the assessee. The assessee had answered both these show-cause notice as well as the Notice under Section 142(1) of the Act. That on receiving reply from the assessee the Assessing Officer has formed a plausible view and has finalized the assessment. On the other hand, there is no independent satisfaction arrived at by the Ld. PCIT for invoking revisionary jurisdiction and passing order under Section 263 of the Act when in fact, the Assessing Officer has verified the issues emanating in the order of the Ld. PCIT. Therefore, the order under Section 263 is arbitrary bad in law hence quashed.

That as per above terms, the appeal of the Assessee is allowed.