ITAT Sets Aside PCIT Order On Alleged Lack Of Inquiry u/s 263

The Income Tax Appellate Tribunal (ITAT) set aside a Principal Commissioner of Income Tax (PCIT) order passed under Section 263, which alleged lack of inquiry by the Assessing Officer during scrutiny. The Tribunal noted that the assessment in question had been conducted under the comprehensive scrutiny framework, where multiple aspects were examined thoroughly. It held that the PCIT cannot invoke revisionary powers merely on assumptions of inadequate inquiry when records clearly demonstrate due diligence. The ruling reaffirmed that Section 263 is not a tool for fishing expeditions but must be based on demonstrable error or prejudice to revenue. By invalidating the PCIT’s order, the ITAT protected the taxpayer from unnecessary litigation and underscored the importance of respecting completed assessments. The judgment is significant in clarifying the limits of supervisory jurisdiction under income tax law.