ITAT, Delhi: Mukul Rohatgi v. ACIT, Circle-61(1), New Delhi [ITA No.3714/Del/2026]
Background: The assessee, a Senior Advocate and former Attorney General of India, was assessed under Section 143(3) r/w Section 144B for AY 2022-23 vide order dated 28.03.2024. The PCIT, Delhi-12 invoked revisional jurisdiction under Section 263, issuing a show cause notice dated 27.02.2026 and passing a revisional order dated 27.03.2026 alleging that the AO had failed to bring to tax the notional Annual Letting Value (ALV) of several immovable properties held by the assessee across London, Goa, Mukteshwar, Dubai, Jor Bagh, and Sahoopur. The assessee raised an additional legal ground that the PCIT who issued the show cause notice had, by that date, already been promoted to Chief Commissioner of Income Tax (CCIT) vide CBDT Office Order No.35 of 2026 dated 26.02.2026, and had signed the notice in the capacity of PCIT without any authorisation under Section 120(2) permitting him to continue exercising PCIT’s powers.
Held: The Tribunal held that once formal posting as CCIT was ordered, the officer ceased to hold the erstwhile PCIT charge, and absent an express CBDT order under Section 120(2), the notice and resultant revisional order were void ab initio. On merits, it held that the AO had made specific inquiries into each property’s usage, several already settled in the assessee’s favour by a coordinate Bench for AY 2020-21, and that Explanation 2 to Section 263 cannot be invoked without the PCIT specifying what further inquiry was warranted, making the revision a mere change of opinion.
Result: The Tribunal quashed the revisional order under Section 263 both on the jurisdictional ground and on merits, and allowed the assessee’s appeal.
Significance: This decision reiterates that a Section 263 notice issued by an officer no longer holding the relevant charge, absent express Section 120(2) authorisation, is void ab initio; and that Explanation 2 to Section 263 cannot be invoked where the AO has conducted due inquiry and formed a plausible view.
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