SIP INFOTECH LIMITED ,MUMBAI vs. PRINCIPAL COMMISSIONER OF INCOME TAX, MUMBAI -3 , MUMBAI

ITA 5355/MUM/2026Status: DisposedITAT Mumbai30 September 2026AY 2019-20208 pages
AI SummaryAllowed

What were the facts?

The assessee, SIP Infotech Limited, is challenging an order passed by the Principal Commissioner of Income Tax (PCIT), Mumbai-3, under Section 263 of the Income Tax Act, 1961, for Assessment Year (AY) 2019-20. The assessee had filed its return declaring a loss. A search action in another case led to information about the assessee's Tally data, resulting in a reopening of assessment under Section 148. The Assessing Officer (AO) made disallowances and added notional interest. The core issue involves a property gifted by the assessee to Vidya Vikas Education Trust on September 15, 2018 (during AY 2019-20). The market value of this property was Rs. 1,90,00,000/- as per Section 50C, while the assessee had purchased it for Rs. 25,00,000/- in 2008. The gift was not disclosed in AY 2019-20 but in AY 2020-21. The AO initially made a protective addition for AY 2019-20.

What did the Tribunal hold?

The Tribunal held that the PCIT was not justified in invoking revisional jurisdiction under Section 263. The Tribunal noted that the issue of the gift transaction, including its disclosure in subsequent years and the nature of the addition (substantive vs. protective), had already been considered by the CIT(A) and this Tribunal for AY 2019-20, and by the AO for AY 2020-21. The deletion of the protective addition for AY 2019-20 was upheld by the Tribunal. The Tribunal emphasized that the PCIT's direction for re-examination of aspects already gone into by the authorities below did not warrant the exercise of Section 263 jurisdiction. Relying on the Bombay High Court's decision in Gabriel India Ltd., the Tribunal stated that the Commissioner cannot revise an order merely because he disagrees with the AO's conclusion. Therefore, the impugned order of the PCIT was set aside. The appeal was allowed.

What were the issues?

1. Whether the PCIT was justified in invoking revisional jurisdiction under Section 263 of the Income Tax Act, 1961, on the ground that the AO's order dated March 28, 2024, was erroneous and prejudicial to the interest of the Revenue, concerning a property gifted by the assessee to a trust in AY 2019-20? Assessee's contentions: The assessee argued that the AO had already examined the matter, and the PCIT could not invoke Section 263 based on a mere change of opinion. The gift was disclosed in the subsequent year (AY 2020-21), and the AO for that year made an addition. Reliance was placed on the Bombay High Court decision in Gabriel India Ltd. (203 ITR 108). Revenue's contentions: The revenue supported the PCIT's order, arguing that the assessee failed to disclose the transaction in the year it occurred, and the protective addition made by the AO did not serve its purpose. The revenue also relied on Explanation 2 to Section 263, stating that an order passed without inquiry is deemed erroneous and prejudicial to the Revenue.

Which sections of the Income-tax Act were involved?

Section 263,Section 148,Section 50C,Section 45,Section 47(iii),Section 270A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCHES “G”, MUMBAI

Before: Justice (Retd.) C V Bhadang & Shri Prabhash Shankar

For Appellant: Shri K Gopal & Shri Akhilesh Deshmukh
For Respondent: Shri Basavaraj Hiremath- CIT DR &, Shri Rajgopal Parthasarathi, Sr. DR
Hearing: 28.09.2026Pronounced: 30.09.2026

Per Justice (Retd.) C V Bhadang, President:

By this appeal, the assessee is challenging the order dated 29.03.2026 passed by the Principal Commissioner of Income Tax, Mumbai-3 (‘PCIT’ for short) under Section 263 of the Income Tax Act, 1961 (‘Act’ for short). The appeal relates to assessment year 2019-20. 2. The brief facts are that the assessee filed its Return of Income (RoI) for the relevant assessment year on 31.10.2019 declaring total loss of Rs.3,47,130/-. In this case, there was a search action in the case of Jesus Lall and Universal Education Group on 14.03.2022. The Assessing Officer (‘AO’ for 2 SIP Infotech Limited

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The order continues below.

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