The Principal Commissioner of Income Tax cannot invoke Section 263 revisionary jurisdiction to override an Assessing Officer's assessment order where the AO has conducted valid inquiries and arrived at a plausible view, as mere difference of opinion or alleged 'inadequate' inquiry does not render an order erroneous and prejudicial to revenue.

ORDER

PER C.N. PRASAD, J.M.

This appeal is filed by the assessee against the order of Ld.PCIT dated 26.03.2024 for the A.Y. 2015-16 u/s.263 of the Act.

2. The assessee has raised following grounds of appeal :-

“1. On the facts and circumstances of the case, the order of PCIT u/s 263 is bad in law as well on facts.

2. On the facts and the circumstances of the case the PCIT has erred in holding that the order of the AO is erroneous in so far as prejudicial to the interest of revenue.

3. On the facts and circumstances of the case, the PCIT u/s 263 has erred in observing that AO has accepted the returned income of the assessee without making proper enquiries and without considering relevant evidences.

4. On the facts and circumstances of the case, the PCIT u/s 263 has erred in observing that AO failed to verify the genuineness of the transaction of sale/purchase of the shares by the assessee despite having report of investigation wing.

5. On the facts and circumstances of the case, the PCIT has erred in relying on Explanation-2 to Section 263 ignoring that explanation cast certain burden on PCIT before invocation.

6. The Appellant craves the leave to add/modify/alter any ground during the course of hearing/pendency of appeal.”

3. The Ld. Counsel for the assessee at the outset referring to ground No.1 of grounds of appeal of the assessee submitted that order passed by the Ld. PCIT u/s.263 of the Act is bad in law.

4. Ld. Counsel for the assessee referring to page No.28 of the paper book which are the reasons recorded for reopening of assessment submitted that the assessment was sought to be reopened for the reason that the assessee had sold Equity shares of Arvind Ltd., Indusind Bank Ltd. and Yes Bank Ltd. for an amount of Rs.43,51,075/-. However, the enquiries revealed that these shares were never purchased by the assessee in any earlier years as claimed and therefore, the sale proceeds of these shares represented unaccounted sum in the hands of the assessee.

5. Ld. Counsel for the assessee referring to page 46 of the paper book which is reply furnished by the assessee in response to the notice issued u/s.142 (1) of the Act in the course of assessment submitted that the assessee has furnished all the necessary information including bank account with the Axis Bank, audited P & L account the contract notes of purchase and sale of shares, details of long term capital gain on sale of shares, computation of income for the A.Y. 2015-16 etc., Ld. Counsel submitted that considering all these evidences and submission of the assessee the AO passed order u/s.144B r.w.s.147 of the Act on 22.03.2022 accepting the income returned by the assessee in its original return filed on 26.09.2015 at Rs.9,47,320/-. Ld. Counsel for the assessee submitted that this reassessment order was sought to be reopened by the Ld. PCIT, Ghaziabad for the very same reasons for which the reopening was made on the ground that the AO did not make proper enquiries and therefore, the reassessment order passed is erroneous and prejudicial to the interest of the revenue.

6. Ld. Counsel for the assessee placing reliance on the decision of the Narasimha Reddy Peechu Vs. ITO in ITA No.932/HYD/2017 order dated 20.07.2018, submitted that on identical circumstances where the Ld. PCIT sought to revise reassessment order passed u/s.143(3) r.w.s. 147 of the Act which was accepted by the AO after examining the evidences placed on record and the submissions of the assessee, the Tribunal held that the order passed by the AO is not erroneous and so exercising jurisdiction by the Ld. PCIT u/s.263 of the Act is bad in law.

7. On the other hand the L