Mere Difference Of Opinion With AO Is No Basis To Exercise Revisionary Power U/s 263: Chandigarh ITAT Confirms Sec 80P Deduction Granted By AO

The Chandigarh ITAT quashed the revision order u/s 263 holding that application of mind is discernible from examination of the record and that “the power under Section 263 of the Act was exercised on the basis of a mere difference in opinion with the AO, rendering such exercise of revisionary power to be invalid”. The Division Bench comprising A.D. Jain and Krinwant Sahay reiterated that “the satisfaction by the Commissioner must be one objectively justifiable and based on material either legal or factual, when available, it cannot be the mere ipse dixit of the Commissioner; that therefore, the Order of the Commissioner exercising jurisdiction under section 263 of the Act could not be held to be sustainable in law”. Subsequently, the CIT initiated proceedings under Section 263 and passed order holding that Assessee was not entitled to claim deduction under Section 80P as Cooperative bank was not entitled to claim deduction under Section 80P due to the bar contained in Section 80P the Assessee had invested with a cooperative bank and not with a cooperative society and hence, it was not eligible for deduction under section 80P. The Bench relied upon Delhi High Court ruling in CIT Versus Anil Kumar Sharma', 335 ITR 83 wherein it was held that if the record showed that AO applied his mind, though the assessment order did not patently indicate that the issue in question had been considered, Section 263 proceedings on ground of lack of enquiry would only mean a case of different opinion and that even if the enquiry was termed as inadequate, it would not warrant invocation of Section 263 merely because CIT had a different opinion in the matter.