Revisional Jurisdiction cannot be Invoked to Redo Assessment Once Assessment Completed by Assessing Officer: ITAT [Read Order]

The Income Tax Appellate Tribunal(ITAT),Chennai Bench, has recently, in an appeal filed before it, held that revisional jurisdiction cannot be invoked to redo assessment, once the same is completed by the Assessing Officer (A.O).

The aforesaid observation was made by the Tribunal when an appeal was preferred before it by an assessee as against the order of the Principal Commissioner of Income Tax, Coimbatore, dated 13.06.2022,pertaining tothe assessment year 2011-12.

The underlying question of the assessee’s appeal being as to whether the Principal Commissioner of Income Tax can invoke the revisional powers u/s.263 of the Act to redo the assessment on an alternate possible view , it was submitted by Mr. T. S. Lakshmi- Venkataraman, FCA, the Ld.AR for the assesse, that the PCIT erred in invoking the jurisdiction u/s.263 of the Act, and in setting aside the assessment order passed by the AO u/s.143(3) r.w.s.147 of the Act dated 29.12.2018, as he falied to appreciate the fact that the Assessing Officer has considered the issue of trade discount received from M/s. SKM Animal Feeds and Foods (India) Pvt. Ltd., and that it is after considering relevant submissions of the assesse , he had estimated the gross profit on trade discount, and hence that once the Assessing Officer has considered the issue, there is no scope for the PCIT to revise assessment order on the very same issue.

However, with Mr. M. Raja, Commissioner of Income Tax , (the Ld. DR) on the other hand, supporting the order of the Principal Commissioner of Income Tax and submitting that although the assessee had received trade discount of Rs.23,16,261/-, the Assessing Officer had estimated the gross profit of 5.4% and made addition of Rs.1.25 lakhs , thereby rendering the assessment order to be erroneous and prejudicial to the interest of the Revenue, the Tribunal consisting of Shri  Mahavir Singh , the  Vice President And Shri  G. Manjunatha , the Accountant Member,  while allowing the assessee’s appeal observed as follows :

“In our considered view, once the AO has taken view on the issue, then there is no scope for the Principal Commissioner of Income Tax to substitute his view and direct the Assessing Officer to make assessment in a particular manner. We find that the issue has been thoroughly dealt with and that it is after being satisfied with the explanation of the assessee, the AO has completed the assessment. Hence, we are of the considered view that the PCIT has completely erred in setting aside the assessment order passed by the Assessing Officer u/s.143(3) r.w.s.147 of the income tax Act, and thus, we quash the order passed by the PCIT u/s.263 of the Act ”.

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