No annual letting value can be charged on residential properties as law chambers where the Assessing Officer has verified their professional use, the Income Tax Appellate Tribunal at Delhi has held for Senior Advocate Maninder Singh, setting aside a Principal Commissioner’s revision order.
New Delhi: A revision order dated March 31, 2026, by the Principal Commissioner of Income Tax (PCIT), which had reopened the scrutiny assessment of Senior Advocate and former Additional Solicitor General Maninder Singh for assessment year 2022-23 over three Delhi residential properties used as law chambers, has been set aside by the Income Tax Appellate Tribunal (ITAT), Delhi, which allowed his appeal [Maninder Singh v. Circle 61].
A coram of Vice President Mahavir Singh and Accountant Member Krinwant Sahay held in its October 12 ruling that the PCIT had exceeded his revisional jurisdiction under Section 263 of the Income Tax Act, 1961, since the Assessing Officer (AO) had made detailed enquiries and adopted a legally permissible view in the 2024 assessment.
Notional rent and the Master Plan
The Tribunal rejected the PCIT’s reasoning that residential properties cannot be used for professional purposes. It noted that Singh had filed complete details before the AO, who, after examining them, did not compute annual letting value (ALV) because the properties were being used for legal professional work.
“Clause 15.8 of the Delhi Master Plan 2021… permits the specified profession to carry on professional activities from the residential premises, and these are as per laws. The AO has done all the verifications and enquiries on this issue. Hence, in our view, no ALV can be computed while framing assessment, which AO has rightly done.”
Three properties, one revision order
For assessment year 2022-23, Singh declared professional receipts of about Rs 24.39 crore and total income of about Rs 27.53 crore. The AO completed the scrutiny assessment in 2024 without charging ALV, the notional yearly rent a residential property not used as the owner’s home could fetch, on three properties in Jangpura Extension, Defence Colony and Sunder Nagar, which Singh said were being used as law chambers.
The PCIT invoked Section 263, taking the view that the AO had not adequately verified whether the properties were used for professional purposes and that residential properties could not be used for a profession. The PCIT also questioned depreciation of about Rs 8.51 crore allowed on two properties in Defence Colony and Sunder Nagar, bought for about Rs 48.15 crore and Rs 73.83 crore, arguing that depreciation is available only on buildings and not on land.
Singh’s answer
Singh contended that, given the scale of his practice before the Supreme Court and various High Courts, the premises were used as offices for his juniors, staff and clients. He relied on Clause 15.8 of the Master Plan for Delhi 2021, which permits specified professionals, including advocates, to carry on professional activity from residential premises, subject to conditions.
On depreciation, he argued that both properties were bought for a composite price, with no separate allocation of the sale consideration between land and building.
A debatable issue and the limit of Section 263
The Tribunal accepted that the sub-registrar had valued land and building separately at the time of purchase, but said this was done under the Delhi government’s circle rates for stamp duty and did not split the actual sale consideration. It found that the PCIT’s order did not show how the value was to be segregated or on what basis depreciation was to be disallowed.
“This issue is highly debatable and once the issue is debatable, the revisional order under Section 263 of the Act is not possible.”
“The present case is not one of lack of enquiry but one where detailed enquiry was admittedly conducted during the scrutiny assessment and one of the legally permissible views was consciously adopted by the AO.”
Holding that revisional power cannot be used merely because another view is possible, the Tribunal allowed the appeal and reversed the PCIT’s order.
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Why the ruling matters
Many advocates, chartered accountants and doctors in Delhi run chambers from residential premises under the Master Plan’s mixed-use provisions. The ruling treats such permitted professional use as a ground for not charging notional rent on the property, provided the facts are placed before and verified by the AO.
It also restates the limits of Section 263: where an AO has made full enquiries and taken one of the legally possible views, a Principal Commissioner cannot reopen the assessment simply because he prefers another view, and must show how an alternative computation would work.
Case Title: Maninder Singh v. Circle 61
Forum: Income Tax Appellate Tribunal, Delhi
Coram: Mahavir Singh (Vice President) and Krinwant Sahay (Accountant Member)
Assessment Year: 2022-23
Date of Order: October 12, 2026
Appearances: Advocates Prabhas Bajaj and Rishabh Yadav for Maninder Singh
