Income Tax: ITAT Quashes All Section 263 Orders Citing 'Change of Opinion':

Income Tax: ITAT Quashes All Section 263 Orders Citing 'Change of Opinion' In this batch of appeals, the assessee and his spouse challenged multiple revisionary orders passed under Section 263 by the Principal Commissioner of Income Tax (Central). The revision concerned reassessment orders already concluded under Section 153A, read with Section 143(3), post a search conducted in October 2018. The key point was the deduction of interest under Section 24(b) on a property in Bengaluru, for which a loan was availed back in 2008–09. The PCIT invoked Section 263, alleging inadequate inquiry by the AO into the loan-property nexus. The assessee countered that the AO had examined all relevant documents and also objected to the short response time, just one working day during the Holi weekend. Main issue: Whether the PCIT was justified in invoking Section 263 to revise already scrutinized assessments on the basis of perceived lack of inquiry, despite the AO examining all relevant documents and applying his mind. Tribunal's Decision: The Tribunal sided with the assessees. It noted that the loan from SBI and later Standard Chartered Bank was well documented, and its link with the purchase of the commercial property was clearly established. There was no requirement to declare assets in Schedule AL before AY 2016-17, and the so-called absence of loan details or property disclosures was incorrect. The Tribunal also took note that the same interest deduction under Section 24(b) had been consistently allowed in earlier assessments, including the reassessment. Citing the High Court rulings, held that since a plausible view was already taken and all necessary inquiries were made, the PCIT’s action was merely a "change of opinion" not enough to justify revision under Section 263. It further observed that the reassessment was done with due discussion among senior authorities, and all evidence was already on record. Thus, there was no error or prejudice to the interest of the revenue. To Read Full Order, Download PDF Given Below