ANIL AGRAWAL,SAKTI vs. ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE BILASPUR, CENTRAL CIRCLE BILASPUR

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ITA 254/RPR/2025Status: DisposedITAT Raipur05 February 2026AY 2018-19Bench: SHRI PARTHA SARATHI CHAUDHURY (Judicial Member), SHRI AVDHESH KUMAR MISHRA (Accountant Member)16 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the PCIT's order under section 263 was not sustainable. The Tribunal reasoned that the AO's decision not to tax the difference of Rs. 94,339, which represented only 5.24% of the purchase consideration, was a possible and legally permissible view, taken with the approval of the supervisory officer. This constituted a 'conscience decision' and a 'change of opinion' by the PCIT, which does not warrant invoking section 263. The Tribunal further held that the safe harbor rule of 10%, as per judicial pronouncements, is retrospectively applicable. Since the difference was less than 10%, the PCIT should have ignored it. Consequently, the impugned order passed by the PCIT under section 263 was quashed. The appeal filed by the assessee was allowed. The stay application was dismissed as withdrawn.

What were the facts?

The assessee, Anil Agrawal, filed an appeal for Assessment Year 2018-19 against an order passed by the Principal Commissioner of Income Tax (Central), Bhopal, under section 263 of the Income Tax Act, 1961. The assessee had purchased land for Rs. 18,00,000, but the stamp duty valuation was Rs. 46,33,000. The Assessing Officer (AO) reopened the assessment under section 148. During reassessment, the Valuation Officer (VO) valued the property at Rs. 18,94,339. The AO accepted the returned income of Rs. 7,95,750 and did not make any addition for the difference of Rs. 94,339 (Rs. 18,94,339 - Rs. 18,00,000), considering it within the permissible margin. The PCIT invoked section 263, holding the AO's order erroneous and prejudicial to revenue, directing a de novo assessment.

What were the issues?

1. Whether the order passed by the Principal Commissioner of Income Tax (Central), Bhopal, under section 263 of the Income Tax Act, 1961, is bad in law for not satisfying the conditions mentioned in Explanation 2 to section 263, specifically regarding the AO having failed to conduct requisite inquiries/verifications (Explanation 2(a)) and having allowed any relief (Explanation 2(b)). Assessee's contentions: - The AO made a conscious decision, approved by a supervisory officer, not to tax the difference of Rs. 94,339 as it was only 5.24% of the purchase consideration, considering CBDT Circular 8/2018. - Explanation 2(a) is not applicable as the requisite valuation report was available. - Explanation 2(b) is not applicable as no relief was allowed. - The PCIT's action amounts to a change of opinion, which does not attract section 263. Revenue's contentions: - The PCIT correctly held the AO's order as erroneous and prejudicial to revenue, as the AO failed to conduct requisite inquiries and investigations, invoking general provisions of section 263 and Explanations 2(a) and (b).

Which sections of the Income-tax Act were involved?

Section 263,Section 56(2)(x)(b),Section 147,Section 148,Section 50C(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, RAIPUR BENCH, RAIPUR

Before: SHRI PARTHA SARATHI CHAUDHURY, JM & SHRI AVDHESH KUMAR MISHRA, AM

For Appellant: Ms. Namrata Kayarwar, C.A

Assessment Year : 2018-19 Anil Agrawal, Vs Assistant Commissioner of Income Ward No. 9 Sakti Budhwari Bazar, Tax Central Circle, Bilaspur, Shri Janjgir-Champa, Ram Plaza, Vyapar Vihar, Bilaspur, Chhattisgarh 495689 Chhattisgarh, 495001 PAN: AHEPA2614B ( आवेदक / Applicant ) : ( ""थ" / Respondent ) िनधा"रती की ओर से / Assessee by : Ms. Namrata Kayarwar, C.A. राज" की ओर से / Revenue by : Shri Ram Tiwari, CIT-DR सुनवाई की तारीख / Date of Hearing : 09.01.2026 घोषणा की तारीख / Date of : 0 5.0 2.2 0 2 6 Pronouncement आदेश / O R D E R

Per Avdhesh Kumar Mishra, AM:

1.

This appeal for Assessment Year (‘AY’) 2018-19 filed by the assessee is directed against the order, dated 08.03.2025, passed under section 263 of the Income Tax Act, 1961 (‘Act’) by the Principal Commissioner of Income Tax (Central), Bhopal [‘PCIT(C)’]. Further, the assessee has also file a Stay Application (‘SA’) with request to S.A. No. 03/RPR/2025 stay the consequential assessment proceedings initiated in pursuance of the order passed under section 263 of the Act by the Ld. PCIT(C).

2.

The appellant assessee vide sole ground, read as “The order passed by the PCIT is bad in law, passed without satisfying the conditions mentioned in explanation 2 of the sec 263”, has challenged the validity of the impugned order.

3.

The relevant facts giving rise to this appeal are that the appellant assessee filed his original Income Tax Return (‘ITR’) of the relevant year on 29.12.2018 declaring income of Rs.7,95,750/-. The assessee had bought a property; i.e. the land admeasuring 0.405 Hectare having Khasra No.1291/2 Sakti Tehsil for Rs.18,00,000/-; however, he had paid stamp duty on the market value of Rs.46,33,000/- the said property determined by the Stamp Valuation Authority/Sub

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