The assessee, a charitable educational trust registered u/s 12A, was subjected to limited scrutiny for AY 2020-21 on two specific issues: (i) high ratio of establishment/administrative expenditure, and (ii) large payments of salary and rent to specified persons reflected in Form 10B. The AO issued detailed notices u/s 142(1) raising specific queries on reasonableness of payments to persons covered by s.13(3) and on administrative expenses; the assessee furnished exhaustive details including qualifications, duties, comparative salary data, PANs, valuation report for rent, agreements, and municipal/fair rent particulars. After examining the material, the AO recorded that the submissions were reasonable and completed the assessment without any addition. The PCIT invoked s.263 alleging lack of proper enquiry and set aside the assessment directing the AO to re-verify reasonableness, genuineness and admissibility of payments. The Tribunal held that this was not a case of “no enquiry”; the AO had conducted pointed and repeated enquiries on the very issues forming the basis of revision and had taken a conscious view. Following ITO v. DG Housing Projects Ltd 2012] 20 taxmann.com 587 /343 ITR 329 , [2013] 212 Taxman 132 (Delhi) (Mag.) (Dehi)(HC)

 . and Narayan Tatu Rane v. ITO,(2016)70 taxmann.com 227(Mum)( Trib)  it was held that where enquiry is made, the PCIT cannot invoke s.263 merely because he considers it inadequate; he must himself conduct enquiry and record a clear finding as to how the order is erroneous and unsustainable in law. The PCIT had not carried out any independent verification and had only remanded the matter for fresh examination, which is impermissible. The Tribunal also noted that in assessee’s own earlier years, identical payments had been held not excessive. Accordingly, the revisionary order was quashed and the assessee’s appeal allowed. (  ITA No. 5030/Mum/2025, , dt. 29-12-2025( AY ,2020-21  )