In a recent decision, the Mumbai bench of the Income Tax Appellate Tribunal (ITAT) has made it clear that revisional power under Section 263 of the Income Tax Act, 1961 cannot be used to reopen the assessment proceedings. The case involved the State Bank of India, which had filed its return of income on 29.09.2008 and subsequently filed a revised return on 11.11.2009. The assessment was completed under Section 143(3) of the Income Tax Act on 28.12.2010. However, the Assessing Officer (AO) issued a notice proposing the reopening of the assessment for the Assessment Year 2008-09, which was challenged by the assessee before the CIT(A).

During the proceedings, the tribunal observed that the AO did not have any new tangible material to reopen the assessment, which had already undergone scrutiny assessment under Section 143(3) of the Income Tax Act. The tribunal held that the AO should have specified the relevant facts that were not disclosed by the assessee during the original assessment. The failure to do so vitiates the reasons recorded.

The tribunal further held that even if there was an error or mistake on the part of the earlier AO, it cannot give the present AO the power to review the action of the earlier AO. This power is vested only with the PCIT/CIT under Section 263 of the Income Tax Act and cannot be used to reopen the assessment.

This decision serves as a reminder to the revenue authorities that the power to reopen assessments cannot be exercised without proper justification and tangible material. It also affirms the importance of specifying relevant facts in the reasons recorded for reopening the assessment. The decision will provide relief to taxpayers and ensure that the assessment proceedings are conducted in a fair and transparent manner.