Income Tax Appellate Tribunal - Delhi
Shiv Punj,Delhi vs Commissioner Of Income Tax ... on 13 May, 2026
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH, 'D': NEW DELHI
BEFORE SHRI C.N. PRASAD, JUDICIAL MEMBER
AND
SHRI SANJAY AWASTHI, ACCOUNTANT MEMBER
ITA No.4556/Del/2025
[Assessment Year: 2019-20]
Shiv Punj Vs. Commissioner of Income Tax
10, Prithviraj Road, (International Taxation)-2
Delhi-110011 Delhi
PAN No.AVIPP2692J
Appellant Respondent
Appellant by Sh. Rajat Jian, CA
Sh. Akshat Jain, CA
Respondent by Sh. M. S. Nethrapal, CIT DR
Date of Hearing 29.04.2026
Date of Pronouncement 13.05.2026
ORDER
PER C.N. PRASAD, J.M.
This appeal is filed by the assessee against the order of Ld. CIT(IT), Delhi-2 dated 03.02.2025 for the A.Y. 2019-20.
2. The assessee has filed this appeal with the delay of 84 days with the condonation petition alongwith affidavit. Referring to the petition for condonation of delay the Ld. Counsel for the assessee submitted that the order of the ld. CIT u/s.263 of the Act was passed on 03.02.2025 and the due date for filing the appeal was 30.04.2025. However, the appeal was filed by the assessee on 23.07.2025 resulting in delay of 84 days. The Ld. Counsel for the assessee submits that the assessee was out of India during that period and therefore, the delay in filing of appeal before the Tribunal was not deliberate and beyond the control of assessee.
3. The Ld. Counsel for the assessee further stated that the assessee infact filed an affidavit deposing that he was out of India during that period and the delay occurred due to circumstances beyond his control and therefore, requested for condonation of delay in filing the appeal before the Tribunal.
4. On hearing both the parties and perusing the condonation petition alongwith affidavit furnished by the assessee, we find that there is a reasonable cause in filing the appeal by the assessee with delay of 84 days. Thus, the delay is condoned and the appeal is admitted for adjudication on merits.
5. Coming to the merits of the appeal the assessee has raised following grounds in its appeal :-
1. That on the facts and circumstances of the case, the order passed by the learned Commissioner of Income Tax (IT), Delhi-2 (hereinafter referred as the CIT (IT)) under Section 263 of the Income Tax Act, 1961 (hereinafter referred as "Act'] is bad, both in the eye of law and on facts.
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2. That on the facts and in the circumstances of the case the order passed by the learned CIT (IT) under section 263 of the Act is barred by limitation as per the provisions of section 263 of the Income Tax Act, 1961 as the period of limitation under sub-section (2) of section 263 of the Act would begin from the date of the order of assessment and not from the order of reassessment, wherein CIT has exercised revisional jurisdiction for reopening the reassessment proceedings u/s 147 for the issues which was not the subject matter of reassessment proceedings.
3. That on the facts and circumstances of the case, the order passed by the learned CIT (IT) assuming jurisdiction under section 263 of the Act is bad in law and is liable to be quashed in the absence of twin conditions of the order passed by the A.O. being erroneous as well as prejudicial to the interest of the Revenue, not satisfied.
4. That on the facts and circumstances of the case, the order passed by the learned CIT (IT) assuming jurisdiction under section 263 of the Act is bad in law and is liable to be quashed being AO has already made addition on the issue of reason recorded/information for re-opening assessment u/s 147 of the Act, thus order under revision is not erroneous in so far as it is prejudicial to the interest of revenue.
5. That on the facts and circumstances of the case, the learned CIT (IT) has erred both on facts and in law by passing order u/s 263 in arbitrary and mechanical manner without giving a finding as to how assessment order shall be deemed to be erroneous in so far as it is prejudicial to the interests of revenue as per Explanation 2 to Section 263(1) of the Income Tax Act, 1961.
6. That on the facts and circumstances of the case, the learned CIT (IT) has erred both on facts and in law in passing order u/s That on the facts and circumstances of the case, the learned documentary evidences furnished by the appellant to rebut the 263 by arbitrarily rejecting the explanation along with allegation of siphoning of funds from Puni Lloyd Limited and its foreign branches as: M/s Punj Lloyd Limited and its foreign branches has not made alleged transactions of Rs 5,82,02,643, Rs 10,11,61,160 & Page | 3 Rs 10,11,45,713 with M/s Unitech DI Pipes and Fittings, Powerline Solutions Trading and Contracting LLC. Qatar and Unitech Trading FZE respectively. PLL Malaysia Sdn Bhd is a separate legal entity registered in Malaysia and M/s Punj Lloyd Limited and its foreign branches has not made transaction of Rs 19,40,51,887/- with Synapse Middle East FZE Foreign branch of M/s Punj Lloyd Limited at Oman has carried transactions with various entities for its projects at Oman.
7. That on the facts and circumstances of the case, the learned CIT (IT) has erred both on facts and in law in passing order u/s 263 merely on the basis of un- substantiated WhatsApp chats, soft data retrieved/carved from the mobile phone, laptop etc. impounded during survey by arbitrarily rejecting the explanation along with documentary evidences furnished by the appellant that:
Relied upon WhatsApp chats, soft data retrieved/carved from the mobile phone, laptop etc, does not have any evidentiary value without having any corroborative evidence to substantiate the contents of said alleged WhatsApp chats, soft data etc as stated by CBDT in Para 2.8 of Chapter 2 of the Digital Evidence Investigation Manual issued in 2014. Relied upon WhatsApp chats do not have any evidentiary value as per the Supreme Court Ruling in the case of A2z Infraservices Ltd v Quippo Infrastructure Ltd. (Now Known as Viom Infra Ventures Ltd) SLP (C) No. -
008636/2021 (SC) Alleged WhatsApp chats are
8. That on the facts and circumstances of the case, the learned CIT (IT) has erred both on facts and in law in passing order u/s 263, merely on the basis of statement of Rahul Maheshwari and a person named Mr. Dutt recorded during survey action on 19.02.2019 and post survey proceedings in the case of Punj Lloyd Limited by arbitrarily rejecting the explanation along with documentary evidences furnished by the appellant that: Relied upon statement of Rahul Maheshwari and a person named Mr. 8 Dutt recorded during survey action on 19.02.2019 and post survey proceedings in the case of Punj Lloyd Limited and cross- examination of said deponents was not provided even though specifically requested by the appellant. Mr. Rahul Maheshwari has duly retracted his statements recorded Page | 4 during Survey action on 19.02.2019 and post survey proceedings on 24.12.2019 by filing an Affidavit before the Director of Income Tax (Investigation)-II, New Delhi on 06.03.2019 and 27.12.2019 i.e. within reasonable."
6. Ld. Counsel for the assessee at the outset referring to ground No.3 and 4 of grounds of appeal of the assessee submitted that assumption of jurisdiction u/s.263 of the Act by the Ld.CIT is bad in law and the order deserves to be quashed in the absence of satisfying the twin conditions of the order passed by the AO being erroneous as well as prejudicial to the interest of the revenue.
7. The Ld. Counsel for the assessee submitted that in the case of the assessee the assessment was reopened u/s.147 of the Act by issue of notice u/s.148A of the Act on 27.02.2023 for assessing interest income of Rs.3,67,082/- and accordingly an order u/s.148A(d) of the Act was passed on 29.03.2023 holding that interest income to the extent of Rs.3,49,881/- was escaped assessment and accordingly reassessment was completed bringing to tax the amount of interest income reflected in the order passed u/s. 148A(d) of the Act.
8. The Ld. Counsel for the assessee submitted that the Ld. CIT issued show cause notice u/s. 263 of the Act stating that there was a survey in the case of M/s. Punj Lloyd Limited (PLL) on 19.02.2019 and the assessee alongwith Atul Punj are promoters of PLL and it was found in the Page | 5 course of survey that the funds of PLL were siphoned off by the promoters and since the AO failed to examine the survey material and the transactions the reassessment completed u/s.143(3) r.w.s. 147 of the Act was erroneous and prejudicial to the interest of the revenue and accordingly the ld. CIT concluded that the AO failed to conduct proper enquiry or verification which should have been done and therefore, held that the reassessment order passed u/s.147 of the Act is erroneous and in so far as prejudicial to the interest of the revenue. The Ld. Counsel for the assessee submitted that the reassessment completed u/s.143 r.w.s. 147 of the Act on 15.04.2024 is not erroneous since the AO completed the reassessment making addition of Rs.3,49,881/- for which reason the assessment was reopened. The Ld. Counsel submitted that since the addition was made in the reassessment framed u/s.143(3) r.w.s. 147 of the Act based on the reasons recorded the reassessment order passed by the AO cannot be said to be an erroneous order.
9. The Ld. Counsel further submitted that when the addition was made while completing the reassessment based on the reasons recorded for reopening of assessment, such an assessment order cannot be held to be erroneous and prejudicial to the interests of revenue and assuming jurisdiction u/s.263 of the Act to make other additions which were not part of the reasons recorded for reopening of assessment. The Ld. Counsel for the assessee placed Page | 6 reliance on the following decisions in support of the above contentions :-
1. Hirenkumar Lavjibhai Kanani Vs. Principal Commissioner of Income Tax, Ahemdabad in ITA No.522/Ahd/2024 '
2. Gulab Badgujar (HUF) Vs. The Commissioner of Income Tax (Central), Nagpur ITA No.798 and 799/Pun/2015
3. KBR Capital Pvt. Ltd.Vs. Pr. CIT in ITA No.3400/Del/2024
4. Commissioner of Income-tax v. Industrial Development Bank of India Ltd. in 152 taxmann.com 591
5. Commissioner of Income tax, Chennai Vs. Alagendran Finance Ltd. 162 taxman 465
6. Ashoka Buildcon Ltd. Vs. Assistant Commissioner of Income tax, Circle-2, Nashik
7. Anusheree Maheshwari Vs. Principal Commissioner of Income Tax-1 Surat in ITA No.584/SRT/2024
10. Referring to the decisions which were cited above in Sr. No.1 to 3, the Ld. Counsel for the assessee submitted that these decisions are squarely applicable to the facts of the assessee's case. Ld. Counsel for the assessee referring to coordinate Bench decisions of Delhi in the case of BKR Capital Vs. PCIT in ITA No.3400/Del/2024 to which one of us is a party, submitted that the coordinate Bench of Delhi Page | 7 Tribunal following the decision of the Pune Tribunal in the case of Gulab Badgujar (HUF) Vs. CIT in ITA No.798 & 799/PUN/2015 dated 03.05.2019 accepted the submissions of the assessee that since additions were made in the reassessment based on the reasons recorded for reopening of assessment, no erroneous could be attributed in the said reassessment order framed by the AO and thus when there is no error the said order cannot be subjected to revision u/s.263 of the Act.
11. Referring to the coordinate Bench decision of Ahemdabad Tribunal in the case of Hirenkumar Lavjibhai Kanani Vs. Principal Commissioner of Income Tax, Ahemdabad in ITA No.522/Ahd/2024 dated 27.08.2024 which is placed at page -1 of the case law of the paper book, the Ld. Counsel for the assessee referring to page-11 of the judgment submitted that the Tribunal held that the jurisdiction u/s.263 of the Act can only be invoked if the order passed by the AO is erroneous and prejudicial to the interest of the revenue. For an order to be erroneous there must be clear demonstation of error in the assessment process relating to the issues for which the assessment was originally reopened. Ld. Counsel submitted that Ld.CIT attempted to revise the assessment order by bringing in new issue which were outside the purview of reasons for reassessment.
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12. Ld. Counsel submitted that similar view has been taken by the Pune Bench in the case of Gulab Badgujar (HUF) Vs. CIT in ITA No.798 and 799/Pun/2015 dated 03.05.2019. Referring to this decision of the coordinate Bench of Pune the Ld. Counsel for the assessee submitted that in para-10 the Tribunal observed that the Hon'ble Bombay High Court in the case of M/s. Ahoska Buildcom Ltd. Vs. ACIT (191 taxmann 29) held that when the reassessment proceedings were in relation of a particular grounds and subsequent there to of passing the reassessment and exercise of jurisdiction u/s.263 of the Act with reference to the issues which did not form subject of reopening of assessment cannot be exercised.
13. On the other hand the Ld. DR vehemently supported the orders of the Ld. CIT in exercising the jurisdiction u/s.263 of the Act and holding that reassessment order passed u/s.147 of the Act is erroneous and prejudicial to the interest of the revenue.
14. Head rival submissions and perused the orders of the authorities below and the case laws relied on. In this case the assessment for the A.Y. 2019-20 was reopened by issue of notice u/s.148A(b) of the Act dated 27.02.2023 and order under clause (d) of section 148A of the Act was passed on 29.03.2023 holding that the income amounting to Rs.3,49,881/- was chargeable to tax and has escaped assessment observing as under :-
Page | 9 "On perusal of the records, it is seen that you have not filed your ITR for A.Y.2019-20. However, as per the information available with this office, it is noticed that during the year under consideration, the assessee has entered into following transactions :-
2. The assessee, being an individual, was statutorily required to file the return of income for the year if its income exceeds maximum amount which is not chargeable to Income-tax without giving effect to the provisions of Chapter VI of the Income-tax Act 1961. The assessee has failed to file return of income for A.Y 2019-20, in absence of the return of income, the nature, source and genuineness of the transactions and income accrued from bank remained unexplained Page | 10 and as such it has escaped assessment. Apart from this, interest income/commission income/professional fee/rental income, if any, are also not offered for taxation as no return of income was filed and as such it has escaped assessment.
3. In view of the above available information, notice u/s 148A(b) of the Act vide DIN No.ITBA/AST/F/148A(SCN)/2022-3/1050144634(1) was issued to the assessee on 27.02.2023 wherein the assessee was requested to explain the source and taxability of the transaction undertaken during the year and show-caused as to why a notice u/s 148 of the Act should not be issued to it. The date for compliance was fixed for 07.03.2023. Such notice was duly served upon the assessee through ITBA on registered email. In response to the same, the assessee submitted that he has disclosed interest income of Rs.
2,328 and 14,873/- by filing of ITR for relevant AY. Further, he has submitted that he has not entered into a transaction of Rs. 3,49,881/- and requested for details of transactions of Rs. 3,49,881/-. The same was provided on 11.03.2023 requesting him to submit his reply by 18.03.2023.
4. Further, assessee vide letter dated 18.03.2023 submitted that information amount of Rs. 3,49,881/- represents only account balance and doesn't represents any transactions having impact on income of Rs. 3,49,881/-. As assessee failed to submit the details of transactions of Rs. 3,49,881/-despite providing adequate opportunity and copy of information requested, so the sources of Rs 3,49,881/- remained unexplained. Hence, the above transaction is unexplained.
5. In view of the above facts and circumstances, I am satisfied that the assessee's case is a fit case for issuing notice u/s 148 of the Act for AY 2019-20 as income amounting to Rs. 3,49,881/- was chargeable to tax and has escaped assessment.
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6. Thus, a notice u/s.148 of the Act is being issued separately in the case of the assessee along with this order u/s.148A(d) with the approval of the Commissioner of Income Tax, International Taxation-2, New Delhi."
15. Accordingly the reassessment was completed on 15.04.2024 determining the income of the assessee at Rs.4,45,221/- by making addition of Rs.3,49,881/- being opening balance in the HDFC bank Ltd. Subsequently the Ld.CIT passed order u/s.263 of the Act on 03.02.2025 holding that the reassessment order passed by the AO u/s.147 of the Act for the A.Y. 2019-20 is erroneous in so far as it is prejudicial to the interest of the revenue. While holding so the Ld. CIT held that the AO failed to conduct proper enquiries on verification which should have been done in respect of survey material in respect of the information relating to survey conducted in M/s.Punj Lloyd Limited as the assessee as well as Mr. Atul Punj were the promoters of PLL and there are allegation in the survey report that there was siphoning of funds by promoters from the company. According, to the Ld. CIT since the AO failed to make proper enquiries or verification the reassessment order passed u/s.147 of the Act was held to be erroneous and prejudicial to the interest of the revenue.
16. As could be seen from the above order under clause (d) of section 148A of the Act the only reason for reopening of Page | 12 assessment in the case of the assessee was to assess the outstanding balances in various bank accounts and after considering the explanation of the assessee the AO completed the reassessment by making an addition of Rs.3,49,881/- as income escaped assessment based on the reason for which the assessment was reopened. In such circumstances whether the reassessment order passed by the AO can be said to be erroneous order, has came up for consideration before the Hon'ble Bombay High Court as well as various Benches of the Tribunal including the coordinate Bench of Delhi as already referred to above.
17. We observed that on identical issue came up for consideration before the Ahemdabad Bench of the Tribunal in the case of Hirenkumar Lavjibhai Kanani vs. PCIT in ITA No.522/Ahd/2024 dated 27.08.2024 wherein the Tribunal held as under :-
11.The jurisdiction under section 263 can only be invoked if the order passed by the AO is erroneous and prejudicial to the interests of the revenue. However, for an order to be erroneous, there must be a clear demonstration of error in the assessment process related to the issues for which the assessment was originally reopened. In the present case, the Ld. PCIT has attempted to revise the assessment order by bringing in issues related to cash deposits and the purchase of immovable properties, which were outside the purview of the notice for reassessment. The revisionary jurisdiction under section 263 cannot be exercised to widen the scope of the original assessment beyond the specific reasons recorded for reopening the assessment. Moreover, the assessee had provided sufficient explanations and evidence during the reassessment proceedings regarding the Page | 13 unsecured loans received from M/s. Yash EPC Projects Pvt. Ltd., and the AO had duly considered these submissions before making the addition under section 2(22)(e). Thus, the assessment order cannot be termed as erroneous or prejudicial to the interests of the revenue merely because the Lal. PCIT holds a different view on unrelated issues.
12. We have noted the judicial precedents relied on by the assessee which primarily deals with the issue of Limited Scrutiny. However, the courts have ruled that invoking Section 263 based on documents that were not part of the original assessment record is legally impermissible. In the case of Reliance Jute and Industries Ltd.(reported in 150 ITR 643), Hon'ble Calcutta High Court clearly stated that revisional powers should be exercised only on the basis of the records that were available during the assessment proceedings. The Co-ordinate Bench in case of M/s.
Visu Casement Pvt. Ltd. (ITA No. 306/Ahd/2020) echoed this view, confirming that extraneous materials cannot justify revision under Section 263.
13. In view of the above findings and judicial precedents, we hold that the invocation of jurisdiction under section 263 by the Ld. PCIT was not justified, as the order of the AO was neither erroneous nor prejudicial to the interests of the revenue on the issues for which the reassessment was originally initiated.
18. Similarly in the case of Gulab Badgujar (HUF) Vs. CIT in ITA No.798 and 799/Pun/2015 dated 03.05.2019 the coordinate Bench of Pune following the decision of the Hon'ble Bombay High Court in the case of Ashoka Buildcom Vs. ACIT (191 taxman 29), held as under :-
"9. The question which arises is the exercise of revisionary jurisdiction by the Commissioner of Income Tax under section 263 of the Act against the order Page | 14 passed under section 143(3) r.w.s. 147 of the Act, wherein the assessment proceedings were re-opened on specific reasons recorded for re-opening. We have already referred to the additions made on the aforesaid reasons in the hands of assessee in the Para above. Once, the re-assessment proceedings are initiated on a specific issue and the addition is made in the hands of the assessee then the Commissioner of Income Tax is precluded from exercise of jurisdiction under section 263 of the Act on a ground which is not covered by the reasons during the re-opening of the assessment since the time for completing the assessment u/s 143(3) of the Act had expired. Hence, we find no merit in the exercise of revisionary power by the Commissioner of Income Tax under section 263 of the Act in the present facts and circumstances.
10. We find support from the ratio laid down by the Hon'ble Bombay High Court in the case of M/s. Ashoka Buildcon Limited Vs. ACIT reported in (2010) 191 Taxmann 29 wherein also the question was of revisionary proceedings initiated under section 263 of the Act against the assessment made which was re- opened under section 147 of the Act. The Hon'ble Bombay High Court noted that the re-assessment proceedings were in relation to a particular grounds and subsequent thereto of passing of the re- assessment and exercise of jurisdiction under section 263 of the Act with reference to the issues, which did not form subject of re-opening of assessment cannot be exercised.
11. The Hon'ble Bombay High Court in the case of M/s. Ashoka Buildcon Limited (supra) at Para 8 held as under:
"8. Where an assessment has been reopened under Section 147 in relation to a particular ground or in relation to certain specified grounds and, subsequent to the passing of the order of reassessment, the jurisdiction under Section 263 is sought to be exercised with reference to issues which do not form the subject of the reopening of the Page | 15 assessment or the order of reassessment, the period of limitation provided for in sub- section (2) of Section 263 would commence from the date of the order of assessment and not from the date on which the order reopening the reassessment has been passed.
The Hon'ble Bombay High Court at Para 10 further held that
10...........
Where a reassessment has been made pursuant to a notice under Section 148, the order of reassessment prevails in respect of those items which form part of reassessment. On items which do not form part of the reassessment, the original assessment continues to hold the field. When the Assessing Officer reopens an assessment on a particular issue, it is open to him to make a reassessment on that issue as well as in respect of other issues which subsequently come to his notice during the course of the proceedings under Section 147. The submission of the Revenue is that by not passing an order of reassessment in respect of other independent issues, the order of the Assessing Officer can be construed to be erroneous and to be prejudicial to the interest of the Revenue within the meaning of Section
263. The submission cannot be accepted in the facts of the present case. The substantive part of Section 147 as well as Explanation 3 enables the Assessing Officer to assess or reassess income chargeable to tax which he has reason to believe had escaped assessment and other income which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under the section. There is nothing on the record of the present case to indicate that there was any other income which had come to the notice of the Assessing Officer us having escaped Page | 16 assessment in the course of the proceedings under Section 147 and when he passed the order of reassessment. The Commissioner, when he exercised his jurisdiction under Section 263, in the facts of the present case, was under a har of limitation since limitation would begin to run from the date on which the original order of assessment was passed. We must however clarify that the bar of limitation in this case arises because the revisional jurisdiction under Section 263 is sought to be exercised in respect of issues which did not form the subject matter of the reassessment proceedings under Section 143(3) read with 147. In respect of those issues, limitation would commence with reference to the original order of assessment If the exercise of the revisional jurisdiction under Section 263 was to be in respect of issues which formed the subject matter of the reassessment, after the original assessment was reopened, the commencement of limitation would be with reference to the order of reassessment The present case does not fall in that category."
Taking strength from the order of Hon'ble Bombay High Court in Ashoka Buildcon Limited (supra), we hold that the order of revision passed in the present case, on issues which did not form subject of re-opening of the assessment or order of reassessment, cannot be upheld. Therefore the revisionary proceedings exercised by the Commissioner of Income Tax is not correct. Hence, the said order of Commissioner of Income Tax is set aside."
19. Further the coordinate Bench of Delhi Tribunal in the case of BKR Capital Pvt. Ltd. Vs. Pr. CIT in ITA No.3400/Del/2024 dated 30.06.2025 held as under :-
"7. The learned AR before us vehemently submitted that reasons recorded for reopening the Page | 17 assessment was for adding the sum of Rs 4,46,00,000/- being the amounts received from five companies controlled by Sri Joginder Pal Gupta. The reassessment was completed under section 147 of the Act on 27-03-2022 after duly adding the said sum of Rs 4,46,00,000/-. Hence, no error could be attributed in the said reassessment order framed by the learned AO. When there is no error, the said order cannot be subjected to revision under section 263 of the Act. The learned AR placed reliance in support of this argument on the decision of coordinate Bench of Pune Tribunal in the case of Gulab Badgujar (HUF) vs CIT in ITA Nos. 798 and 799/Pun/ 2015 dated 3-5-2019, wherein it was held as under:-
"9. The question which arises is the exercise of revisionary jurisdiction by the Commissioner of Income lax under section 263 of the Act against the order passed under section 143(3) r.w.s. 147 of the Act, wherein the assessment proceedings were re-opened on specific reasons recorded for re-opening. We have already referred to the additions made on the aforesaid reasons in the hands of assessee in the Para above. Once, the re-assessment proceedings are initiated on a specific issue and the addition is made in the hands of the assessee then the Commissioner of Income Tax is precluded from exercise of jurisdiction under section 263 of the Act on a ground which is not covered by the reasons during the re-opening of the assessment since the time for completing the assessment u/s 143(3) of the Act had expired. Hence, we find no merit in the exercise of revisionary power by the Commissioner of Income Tax under section 263 of the Act in the present facts and circumstances."
7.1. We find lot of force in the said argument advanced by the learned AR and respectively following the decision of Pune tribunal referred supra, we hold that there is no error that could be attributed in the reassessment order dated 27-03-2022 even though no Page | 18 verification was indeed made by the learned AO with regard to amount received from Saloni Build Tech Private Limited.
8. It is a fact that amount received from Saloni Build Tech Private Limited had already been reflected in the balance sheet and in the regular return of the assessee. Hence, if at all there is any error, the error could only be attributed in the original intimation framed under section 143(1) of the Act and not in the reassessment order. Hence in that scenario, the original intimation under section 143(1) of the Act should have been subjected to revision within the permissible time limit as per section 263 of the Act. Reliance in this regard has been rightly placed by the learned AR on the decision of Hon'ble Supreme Court in the case of CIT vs Alagendran Finance Limited reported in 293 ITR 1(SC). Respectfully following the same, we hold that there cannot be any error in the reassessment order framed by the learned AO with regard to non-enquiry of amounts received from Saloni Build Tech Private Limited. Hence, one of the twin conditions for initiating revision proceedings under section 263 stood non-satisfied. Accordingly, the revision proceedings are liable to be quashed and are hereby quashed. The grounds raised by the assessee are hereby allowed both on law as well as on merits."
20. The above decisions squarely apply to the facts of the assessee's case. Thus, respectfully following the above said decisions we hold that the reassessment order dated 15.04.2024 passed u/s.143(3) r.w.s. 147 of the Act for the A.Y. 2019-20 cannot be said to be erroneous as the same was passed based on the reasons for which the assessment was sought to be reopened.
21. In the circumstances we quash the order dated 03.02.2025 passed u/s.263 of the Act by the Ld. CIT as twin Page | 19 conditions of the assessment order being erroneous and prejudicial to the interest of the revenue is not satisfied the present facts of the assessee. Ground No.3 and 5 are allowed.
22. Since we have quashed order passed by the Ld. CIT u/s.263 of the Act allowing ground Nos. 3 to 5 of grounds of appeal the other technical grounds and grounds on merits are left open.
23. In the result, the appeal of the assessee is partly allowed as indicated above.
Order pronounced in the open court on 13.05.2026.
Sd/- Sd/-
[SANJAY AWASTHI] [C.N. PRASAD]
ACCOUNTANT MEMBER JUDICIAL MEMBER
Dated: 13.05.2026
NEHA , Sr.P.S.*
Copy forwarded to:
1. Appellant
2. Respondent
3. PCIT
4. CIT(A)
5. DR
Asst. Registrar,
ITAT, New Delhi
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