NJ India Invest Revisionary Limits Tested

The assessee-company, engaged in the business of broking and distribution of financial products, was subjected to revisionary proceedings under Section 263 after the Principal Commissioner relied upon discrepancies reflected in the Insight Portal relating to GST/TAS data. 

The Principal Commissioner alleged that the Assessing Officer failed to properly verify certain transactions and accordingly directed fresh assessment proceedings.

The Tribunal found that the Assessing Officer had in fact issued notices under Sections 142(1) and 133(6), obtained replies from multiple parties, and examined the material furnished during scrutiny proceedings.

It held that absence of elaborate discussion in the assessment order does not imply absence of inquiry. The Tribunal further observed that discrepancies in third-party data, without independent verification or reconciliation, cannot by themselves justify revision under Section 263.

Relying heavily on the Supreme Court decision in Malabar Industrial Co. Ltd. v. CIT, the Tribunal held that the twin conditions of “erroneous” and “prejudicial to the interests of Revenue” were not satisfied. Consequently, the revisionary order passed by the Principal Commissioner was quashed.