ALLIANCE NIRMAAN LIMITED,BAREILLY vs. PCIT, BAREILLY

ITA 119/LKW/2022Status: DisposedITAT Lucknow12 June 2025AY 2017-1834 pages
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What did the Tribunal hold?

The Tribunal held that the PCIT failed to make a case for action under Section 263 of the Income Tax Act, 1961. It was noted that the Assessing Officer (AO) had recorded in the assessment order that explanations were called for on all points selected for scrutiny, and these were placed on record. The AO had also issued notices under Section 142(1) of the Act, to which the assessee responded with written submissions. The Tribunal found that while the PCIT acknowledged the assessee's submissions in his order, he failed to consider them and did not pass a speaking order explaining why they were not satisfactory. The Tribunal was satisfied that relevant inquiries were made by the AO during the assessment proceedings. The PCIT's order merely stated that the AO passed the assessment order without verifying and conducting further inquiries, without specifying what those further inquiries should have been. Since some inquiries were conducted and the AO took a considered view, it was not a case of no inquiry. Therefore, the impugned order of the PCIT was set aside, and the AO's assessment order dated December 14, 2019, was restored.

What were the facts?

The assessee, M/s Alliance Nirman Limited, filed its return of income for Assessment Year 2017-18, declaring a total income of Rs. 36,84,720. The case was selected for scrutiny, and the Assessing Officer (AO) passed an assessment order under Section 143(3) on December 14, 2019, determining the income at Rs. 36,84,720. The Principal Commissioner of Income Tax (PCIT), Bareilly, initiated revisionary proceedings under Section 263 of the Income Tax Act, 1961, by an order dated March 23, 2022. The PCIT set aside the AO's assessment order, holding it to be erroneous and prejudicial to the interest of the revenue, and directed the AO to frame a fresh assessment order. The assessee appealed this order to the Income Tax Appellate Tribunal (ITAT).

What were the issues?

1. Whether the PCIT erred in initiating and completing revisionary proceedings under Section 263 of the Income Tax Act, 1961, and setting aside the assessment order, thereby acting without valid jurisdiction. 2. Whether the PCIT erred in holding the assessment order passed under Section 143(3) to be erroneous and prejudicial to the interest of the revenue, when the AO had conducted due inquiries and applied his mind to the issues. Assessee's Contentions: - The PCIT erred in initiating revisionary proceedings under Section 263 as the AO had conducted due inquiries and applied his mind, making it a case of change of opinion, which is impermissible for assuming jurisdiction under Section 263. - The PCIT failed to appreciate that the AO had considered all issues mentioned in the show cause notice and made due inquiries, and therefore, it was not a case of lack of inquiry. - The PCIT's finding that the AO's order was erroneous and prejudicial to the revenue was factually incorrect and legally misconceived. - The PCIT wrongly assumed jurisdiction under Section 263 without conducting independent inquiries and by merely suggesting further inquiries without specifying them. - The PCIT failed to appreciate that revisionary proceedings under Section 263 cannot be exercised for redoing investigations or simply to make further inquiries. - The impugned order was passed without granting sufficient opportunity to the assessee. Revenue's Contentions: - The Revenue relied on the order passed by the PCIT and did not dispute the facts claimed by the assessee or bring any additional material to support the PCIT's order.

Which sections of the Income-tax Act were involved?

Section 263,Section 143(3),Section 143(1),Section 142(1)

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Income Tax Appellate Tribunal, LUCKNOW BENCH A, LUCKNOW

Before: SHRI ANADEE NATH MISSHRA & SHRI SUBHASH MALGURIA

For Appellant: Shri Rakesh Garg, Advocate

PER SUBHASH MALGURIA:J.Μ. This appeal vide I.T.A. No.119/Lkw/2022 has been filed by the assessee for assessment year 2017-18 against impugned order dated 23/03/2022 (DIN & Order No.ITBA/REV/F/REV5/2021-22/1041308287(1) passed by learned Pr. Commissioner of Income Tax (“PCIT” for short), Bareilly u/s 263 of the Income Tax Act, 1961 (“the Act" for short). In this appeal the assessee has raised the following grounds:

"

1.

Grounds No. 1: The Learned PCIT, Bareilly has erred in initiating and completing the revisionary proceedings u/s 263 of the Act in the hands of the assessee, and setting aside the case to the Assessing officer, with total disregard to the facts and circumstances of the case, and is untenable under the law. Gro

The order continues below.

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