M/S Maheshwari Coal Benefication And ... vs Acit Central Circle-1(1), Nagpur on 14 May, 2025

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Income Tax Appellate Tribunal - Nagpur

M/S Maheshwari Coal Benefication And ... vs Acit Central Circle-1(1), Nagpur on 14 May, 2025

                IN THE INCOME TAX APPELLATE TRIBUNAL
                        NAGPUR BENCH, NAGPUR


           BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER AND
                  SHRI K.M. ROY, ACCOUNTANT MEMBER


                          ITA no.247/Nag./2024
                        (Assessment Year : 2017-18)

                          ITA no.248/Nag./2024
                        (Assessment Year : 2019-20)


M/s. Maheshwari Coal Benefication &
Infrastructure Pvt. Ltd.
697, 1st Floor, Ward-33                                 ................ Appellant
Behind 16-Kholi, Tikrapara
Bilaspur 495 001 PAN - AAECM9298D

                                    v/s

Asstt. Commissioner of Income Tax
Central Circle-1(1), Nagpur
                                                      ................ Respondent

                      Assessee by : Shri Sunil Kumar Agrawal
                      Revenue by : Shri Sandipkumar Salunke

Date of Hearing - 05/03/2025                   Date of Order - 14/05/2025


                                ORDER


PER K.M. ROY, A.M.

These appeals by the assessee are emanating from the impugned orders of even date 20/03/2024, passed under section 263 of the Income Tax Act, 1961 ("the Act") by the learned Principal Commissioner of Income Tax, 2 M/s. Maheshwari Coal Benefication & Infrastructure Pvt. Ltd.

AY 2017-18 & 2019-20 (Central), Bhopal, ["learned PCIT"], for the assessment year 2017-18 and 2019-20.

2. Since both the appeals pertain to the same assessee, therefore, as a matter of convenience, these appeals were clubbed together and are being disposed off by way of this consolidated order.

ITA no.247/Nag./2017-18 Assessee's Appeal - A.Y. 2017-18

3. The assessee has raised additional ground No.1 under Rule 11 of the Income Tax Appellate Tribunal Rules, 1963, which is on the legal issue of the assumption of jurisdiction by the learned PCIT invoking action under section 263 of the Act, which goes to the root of the matter and it does not require any further verification of facts out of the facts available on record, by relying on the decision of the Hon‟ble Supreme Court in National Thermal Power Co. Ltd v/s CIT [1998] 229 ITR 383 (SC), we admit the additional ground of appeal raised by the assessee. However, since ground no.3 and additional ground no.1, are inter-connected on the legal issue, therefore, we first proceed to dispose off these grounds together. Ground no.3 and additional ground no.1, are extracted below:-

Gr.No.3 On the facts and circumstances of the case and in law, assessment order made u/s143(3) rws.153A dt.29-9-21 for AY17-18 is invalid; an invalid order cannot be revised u/s263 by PCIT; impugned order made u/s263 dt.20-3-24 would be invalid and is liable to be quashed.

Addl.Gr.No.1:

"On the facts and circumstances of the case and in law, revision order made u/s263 dt.20-3-24 for AY17-18 by ld PCIT(Central) would be is invalid as base 3 M/s. Maheshwari Coal Benefication & Infrastructure Pvt. Ltd.

AY 2017-18 & 2019-20 order i.e., assessment made u/s153A rws.143(3) dt.29-9-21 for AY17-18 has been held as invalid vide order dt.26-12-24; an invalid order cannot be revised u/s263 as it ceased to have existence; order made u/s263 for AY17- 18 dt.20-3-24 would be invalid and is liable to be quashed."

4. Facts in Brief:- In the instant case, the assessee is engaged in the business of wholesale business of coal trading, liasoning, coal handling in railway siding in the name of M/s.Maheshwari Coal Benefication and Infrastructure. The assessee, for the year under consideration, filed its return of income electronically on 30/10/2017, under section 139 of the Income Tax Act, 1961 (for short "the Act") disclosing income of ` 2,09,04,440. During the year, on 26/09/2016, a survey under section 133A of the Act was conducted upon the assessee. Thereafter, on 11/07/2019, a search and seizure action under section 132 of the Act was also conducted upon the assessee. During the survey, some documents were found/seized from the premises of the assessee. Hence, the Assessing Officer, on 16/09/2020, issued notice under section 153A of the Act, in response to which the assessee filed reply before the Assessing Officer. The Assessing Officer, after obtaining approval dated 29/09/2021, under section 153D of the Act from the Addl.CIT and has completed assessment under section 153A r/w section 143(3) of the Act by making addition of ` 7,59,397, on account of interest expenses.

5. Thereafter, the learned PCIT has issued show cause notice dated 09/02/2024, under section 263 of the Act in response to which the assessee furnished reply on 15/02/2024, explaining the facts of the case. The learned PCIT, not having been satisfied with the submission of the assessee, has 4 M/s. Maheshwari Coal Benefication & Infrastructure Pvt. Ltd.

AY 2017-18 & 2019-20 passed order dated 20/03/2024, under section 263 of the Act giving direction for making assessment de novo.

6. Consequent upon issuance of the impugned order passed by the learned PCIT, the assessee filed appeal before the Tribunal by raising the grounds of appeal cited supra.

7. Before us, it is the submission of the learned Counsel for the assessee that the learned PCIT has made revision order under section 263 for revising the assessment order passed under section 153A r/w section 143(3), which had already been quashed vide order dated 26/12/2024 by the Tribunal, Nagpur Bench, in assessee‟s own case for the assessment year 2014-15 to 2020-21, in M/s. Maheshwari Coal Benefication & Infrastructure Pvt. Ltd. v/s DCIT, ITA no.113/Nag./2024, etc., vide consolidated order dated 26/12/2024. It is the submission of the learned Counsel for the assessee that when the base order i.e., the assessment made under section 153A r/w section 143(3) of the Act vide order dated 29/09/2021, has been quashed on the count of invalid approval granted under section 153D of the Act by the Addl.CIT, Range-Central, Nagpur (i.e., the competent authority for giving approval under section 153D of the Act) and hence, an invalid order cannot be revised under section 263 of the Act. For this proposition, the learned Counsel for the assessee relied on the following case laws:-

i) PCIT v/s Badal Prakash Jindal HUF, (2023) 150 taxmann.com 483 (Ori);

ii) Krishan Kumar Saraf v/s CIT, (2016) 83 taxmann.com 331 (Del-Trib);

M/s. Maheshwari Coal Benefication & Infrastructure Pvt. Ltd.

AY 2017-18 & 2019-20

iii) Charbhuja Marmo (India) P. Ltd. v/s PCIT, (2019) (Del-Trib);

iv) Pradeep Dattatraya Banginwar v/s PCIT, (2022) (Nagpur-Trib) 217 TTJ 246/ 213 DTR (T) 89;

v) Shahi Exports P. Ltd. v/s PCIT, (2021) (Del-Trib), ITA No.2170 & 2171/ Del/2017, order dated 24/03/2021;

vi) SBS Realtors P. Ltd. v/s ITO, (2021) (Del-Trib), ITA No.2996/Del/2017, order dated 06/04/2021;

vii) Concord Infra Projects P. Ltd. v/s PCIT, (2021) 214 TTJ 892 (Kol-Trib);

viii) Classic Flour & Food Processing P. Ltd. v/s PCIT, (2017) (Kol-Trib) ITA No.764 to 766/Kol/2014, order dated 05/04/2017;

ix) Supersonic Technologies Pvt Ltd. v/s PCIT, (2019) 197 TTJ 889 (Del-

Trib);

x) Westlife Development Ltd. v/s PCIT, (2016) 49 ITR (Trib.) 406 (Mum-

Trib);

xi) Inder Kumar Bachani (HUF) v/s ITO, (2006) 99 ITD 621 (Luck-Trib).

8. On the other hand, the learned Departmental Representative submitted that the learned PCIT has passed order under section 263 of the Act in accordance with law on being found that the assessment order is erroneous inasmuch as it is prejudicial to the interests of the Revenue and hence, prayed to sustain it.

9. We have carefully considered the rival contentions, perused the orders of the authorities below and the material placed on record. We are of the considered opinion that for the year under consideration, since the assessment made under section 153A r/w section143(3) had already been quashed for want of valid assumption of jurisdiction by the Assessing Officer on account of invalid approval granted under section 153D of the Act by the Addl.CIT and therefore, we are of the considered view that an invalid order 6 M/s. Maheshwari Coal Benefication & Infrastructure Pvt. Ltd.

AY 2017-18 & 2019-20 cannot be revised under section 263 of the Act by the learned PCIT by giving direction for making assessment de novo. We are further of the view that when the very foundation of the revision proceedings i.e., the assessment made under section 153A r/w section 143(3) for the assessment year 2017- 18 is held to be invalid on account of a invalid approval granted under section 153D and thus, we hold that the said invalid order cannot be revised under section 263 by the learned PCIT. Accordingly, the learned PCIT could not have assumed jurisdiction under section 263 of the Act and validated the said assessment order by restoring the same to the file of the Assessing Officer with direction to re-assess the income of the assessee afresh. The revision order passed under section 263 based on such invalid order, would also became invalid while exercising power under section 263 by the learned PCIT who could have not revised the assessment order which is non-est in the eye of law because it would prejudice the right of assessee which has accrued in favour of assessee on account of its income being determined. If the learned PCIT revises such an assessment order, then it would imply extending/ granting fresh limitation for passing fresh assessment order. It is settled law that by the action of the authorities the limitation cannot be extended, because the limitations are provided in the statute. The assumption of jurisdiction under section 263 in respect of an assessment which is non-est is also bad in law as a non-est order cannot be erroneous and prejudicial to the interests of the Revenue. An order framed under section 263 for the assessment year 2017-18 is accordingly quashed on the principle of „Sublato Fundamento Cadit Opus‟, meaning thereby, that in case the foundation is 7 M/s. Maheshwari Coal Benefication & Infrastructure Pvt. Ltd.

AY 2017-18 & 2019-20 removed, the super structure falls. Since the foundation, i.e., the order under section 153A r/w section 143(3) has been removed, the super structure i.e., the order under section 263, must fall. For the above proposition, we rely on the following case laws which involve identical issue:-

i) PCIT v/s Badal Prakash Jindal HUF, (2023) 150 taxmann.com 483 (Ori.) wherein the Court held as under:-

"12. Indeed, if the original reassessment order itself was not validly passed, the subsequent revisional order by the PCIT was required to be held invalid."

ii) Gigabyte Technology (India) (P) Ltd v/s CIT, (2020) 317 CTR 585 (Bom.) wherein the Court held as under:-

"3. TA No.77 of 2015 was admitted on 11-2-16, on the following substantial questions of law:

"1. Whether, the Tribunal erred in holding that there was no infirmity in assuming revisionary jurisdiction by the CIT u/s263, without appreciating that the assessment order which was sought to be revised by such revisionary action was itself bad in law and void ab initio?

15. Mr. Vishal Kalra, the ld counsel for the assessee, at the outset, submitted that the AO was duty-bound to follow the sec144C and since, admittedly, these provisions were not followed, the assessment order dt.18- 12-09 was void ab initio and a nullity. He submits that as against the order which was void ab initio, or a nullity, the revisional jurisdiction u/s 263 could never have been invoked. He submits that sec263 presupposes the existence of an order which may be erroneous, but not an order which is void ab initio or a nullity. In support of this proposition, Mr. Kalra relies upon the following decisions:

Keshab Narayan Banerjee vs. CIT (1998) 101 Taxman 512 (Cal); P. Abdulkadar Hamza vs. CIT (2001) 116 Taxman 455 (Ker); Escorts Farms (P) Ltd (1990) 48 Taxman 297 (Del);

Westlife Development Ltd (2016) 49 ITR (Trib) 406 (Mumbai); Inder Kumar Bachani (HUF) (2006) 101 TTJ (Lucknow) 450; and Paul John, Delicious Cashew Co v. ITO (2005) 98 TTJ (Coch) 440.

45. According to us, the issue is whether the assessment order dt.18-12-09 in this case, is void ab initio or not. ......we have to hold that the assessment order dt.18-12-09, in the present case, was clearly without jurisdiction and, therefore, null and void or void ab initio. The fact that the assessee, in this case, may have not instituted a WP to challenge the same, but has instituted only an appeal challenging the same, can make no difference to the legal position which is otherwise quite clear. This was not a case where the assessee was merely throwing some collateral challenge to the assessment order dt.18.12.2009. The assessee had frontally challenged this order by instituting an appeal against the same. Therefore, all these decisions could 8 M/s. Maheshwari Coal Benefication & Infrastructure Pvt. Ltd.

AY 2017-18 & 2019-20 not have been ignored by the Tribunal by merely observing that these were the decisions in WPs instituted by the assessees.

46. For all the aforesaid reasons, the 2 substantial questions of law will have to be answered in favour of the assessee and against the Revenue. Further, the order dt.23-2-12 made by the CIT in the purported exercise of jurisdiction u/s 263, is liable to be set aside. Since this order has merged into the order of the Tribunal dt.31.10.2014, even this impugned order made by the Tribunal is required to be set aside."

iii) Jagjeet Singh v. ACIT (2024) 164 taxmann.com 324 (Asr-Trib) wherein the Tribunal held as under:-

"11.2. Thus, the original assessment framed u/s147 being without jurisdiction, as such, the revisions proceedings u/s 263 are void. In this regard the AR relied upon the principle of law enshrined in the legal maxim "sublato fundamento cadit opus" which means that when the cause (foundation) is removed, the effect (consequent action) ceases. The AR interpreted the maxim to imply that in view of the original order passed u/s 147 being non-jurisdictional, the order passed u/s 263 arising out of the non-jurisdictional order u/s 147 is a nullity. The legal maxim is supported by Kiran Singh v. Chaman Paswan (1954) (SC), an order passed by an authority without jurisdiction is a nullity, and its invalidity can be challenged whenever and wherever it is sought to be enforced or relied upon. The AR further relied upon the following case laws:-

Badal Prakash Jindal [2023] 150 taxmann.com 483 (Orissa HC).

13. ... we find that the whole case has been framed based on material found during the search. Meaning thereby, the course of action was required to be taken u/s153C and not u/s148. This view has been accepted by the Hon‟ble Apex Court in the case of Sri Dinakara Suvarna (supra). In our view, the AO has erred in invoking the reassessment proceedings u/s147 and as such, the subsequent cause of action based on invalid order is held to be without jurisdiction. Our view gets support from Badal Prakash Jindal (2023) (Orissa HC)."

iv) Krishan Kumar Saraf v. CIT (2016) 83 taxmann.com 331 (Del-Trib) the Tribunal held as under:-

"18. However, u/s263 the ld CIT cannot revise a non-est order in the eye of law. Since the assessment order was passed in pursuance to the notice u/s143(2), which was beyond time, therefore, the assessment order passed in pursuance to the barred notice had no legs to stand as the same was non- est in the eyes of law. All proceedings subsequent to the said notice are of no consequence. ....

19. While exercising powers u/s263 ld CIT cannot revise an assessment order which is non-est in the eye of law because it would prejudice the right of assessee which has accrued in favour of assessee on account of its income being determined. If ld CIT revises such an assessment order, then it would imply extending/ granting fresh limitation for passing fresh assessment order. It is settled law that by the action of the authorities the limitation cannot be extended, because the limitation are provided in the statute.

M/s. Maheshwari Coal Benefication & Infrastructure Pvt. Ltd.

AY 2017-18 & 2019-20

20. In view of above discussion, ground No.3 is allowed and the revisional order passed u/s263 is quashed."

v) Charbhuja Marmo (India) P Ltd v. PCIT (2019) (Del-Trib); ITA No. 4749/ Del/ 2019, order dated 31/12/2019, wherein the Tribunal held as under:-

"6.1. In this case the Addl.CIT and Pr.CIT-2, New Delhi have granted approval to the reopening of the assessment vide Order dt.15-3-16, copy of which is filed at page-2 of the PB. The same reads as under:

"Dated: 15-3-16 Sd K. Jayant) ITO-Ward 6(1), New Delhi.

12. Whether the Addl.CIT, Range-6, New Delhi is satisfied on the reasons recorded by the ITO that it is a fit case for issue of notice u/s148.

Yes; Sd Dev Saran Singh Addl.CIT, Range-6, New Delhi.

13. Whether the Pr. CIT, Delhi-2, New Delhi is satisfied on the reasons recorded by the ITO that it is a fit case for issue of notice u/s148.

Yes; Sd PK Gupta, Pr.CIT, Delhi-2, New Delhi."

6.7....... it is clear that the Addl.CIT and ld PCIT while granting approval for reopening of the assessment u/s147/148 merely stated "Yes", which would show that they have not applied their independent mind and merely accorded sanction without going through any material on record. The issue is thus, covered against the Revenue by the afore-cited decisions in which even on more facts the approval was not found valid. Therefore, the issue is covered by the above decisions of the Tribunal in which even on better footing the re-assessment order was quashed and ultimately it was held that such proceedings could not be reopened in collateral proceedings u/s263. The ld counsel for the assessee has pointed-out several inconsistencies in the reasons which also show that the reasons are recorded just by reproducing the report of the Inv.Wing without application of mind. The issue is, therefore, covered in favour of the assessee by the above Orders of the Trib. Following the same we hold that reopening of the assessment in this case is invalid, bad in law and therefore, such re-assessment proceedings could not be reopened u/s263. It may also be briefly noted that the AO in the reasons recorded in the assessment order has mentioned that assessee has received accommodation entries in AY under appeal from 5 parties in a sum of Rs.70 lakhs and after reopening of the assessment, AO called for the details and documents from the assessee and was satisfied with the explanation of assessee, therefore, the of proceedings u/s263 by the ld PCIT could not have substituted the view taken by the AO. In view of these facts and circumstances, we are of the view that initiation of proceedings u/s263 are not justified. The same are bad in law and invalid. We, accordingly, set aside the Order of the ld PCIT passed u/s263 and quash the same. Resultantly, the re-assessment order dt.5-12-16 u/s147/143(3) by the AO is restored. Appeal of assessee is accordingly allowed."

vi) Rajlaxmi Petrochem (P) Ltd v. ITO (2022) 36 NYPTTJ 1399 (Pune-Trib) ITA No.1693 & 1694/Pun/2019 & 210/Pun/2021; AY11-12 & 12-13, order dated 28/11/2022, the Tribunal held as under:-

"4. This leaves us with assessee‟s last appeal ITA No.210/Pune/2021 involving section 263 proceedings wherein the ld PCIT has held the foregoing sec143(3) r/ws.147 assessment as an erroneous one causing prejudice to interest of the revenue. We make it clear that the said re-assessment already has been quashed in preceding paragraph as not sustainable in law. That being the case, 10 M/s. Maheshwari Coal Benefication & Infrastructure Pvt. Ltd.

AY 2017-18 & 2019-20 we invoke sublato fundamento cadit opus i.e., when the foundation itself does not exist, the superstructure raised thereupon automatically falls. The PCIT‟s revision order therein is annulled for this precise reason alone. All other pleadings on merits stand rendered academic in above terms."

vii) Pradeep Dattatraya Banginwar v/s PCIT, (2022) 217 TTJ 246 (Nagpur-

Trib) ITA No.28/Nag/2021, order dated 06/04/2022; wherein the Tribunal held as under:-

"8. ... Our aforesaid view that an invalid reassessment order cannot be revised by the PCIT in exercise of his jurisdiction u/s263 is supported by the orders of the co-ordinate benches of the Tribunal in, viz., Charbhuja Marmo (India) (P) Ltd (Del-Trib) ITA No.4749/Del/ 2019, dt.31-12-19; and Supersonic Technologies (P) Ltd (2019) (Del-Trib). We, thus, in terms of our aforesaid observation that now when the very foundation of the impugned revisional proceedings i.e., the reassessment order passed by the AO u/s143(3) rws.147, dt.1-12-18 is in itself based on an invalid assumption of jurisdiction by the AO and thus, not sustainable in the eyes of law, therefore, the PCIT could not have assumed jurisdiction u/s263 and validated the said reassessment order by restoring the same to the file of the AO with a direction to reassess the income of the assessee afresh, therefore, set-aside the order passed by the PCIT u/s263, dt.24-2-21."

viii) Classic Flour & Food Processing P Ltd v. CIT (2017) (Kol-Trib) dt.5-4-17;

ITA No.764 to 766/Kol/2014, wherein the Tribunal held as under:

"11. ...If the validity of proceedings u/s147 has not been challenged by the assessee by filing appeal against the order u/s147, can it be challenged in the appeal against an order u/s263 revising the invalid order u/s147. This issue has been analysed by Westlife Development Ltd (Mumbai-Trib) and 147 proceedings has been equated to primary proceedings and the proceedings u/s263 passed equated to collateral proceedings. It has further been held based on various judicial pronouncements of the Hon‟ble SC that if the primary proceedings are non-est in law or void on the ground of lack of jurisdiction then the validity of such proceedings can be challenged even in an appeal arising out of collateral proceedings. We have already set out the ratio laid down in these decisions and we do not wish to repeat the same. Suffice it to say the law is well settled that invalidity of the primary proceedings for want of proper jurisdiction can be challenged even in appellate proceedings arising out of a collateral proceeding. In view of the aforesaid legal position we admit the additional grounds for adjudication.

16. In the present case also the re-assessment proceedings have been initiated only for the purpose of verification and examination which is not the scope of reassessment proceedings. It would be the case of reasons to suspect rather than reasons to belief that there was escapement of income. It is a case of the AO seeking to make fishing and roving inquiry without any basis. We have no hesitation in concluding that initiation of reassessment proceedings in the present case was not valid as the mandatory requirement of such 147 has not been satisfied. We therefore hold that reassessments orders for AY07-08 and 08- 09 dt. 30-12-11 were invalid. Consequently order passed u/s263 dt.21-3-14 for AY07-08 and 08-09 are also held to be invalid and quashed. Thus, the appeals being ITA No.765 and 766/Kol/ 2014 are allowed."

M/s. Maheshwari Coal Benefication & Infrastructure Pvt. Ltd.

AY 2017-18 & 2019-20

ix) Supersonic Technologies (P) Ltd v. PCIT (2019) 197 TTJ 889 (Del-Trib) dt.10-12-18; ITA No.2269/ Del/2017; AY07-08, wherein the Tribunal held as under:

"6.1. ....... It is well-settled law that assessee can challenge the validity of the reassessment proceedings in the collateral proceedings (relating to examination of validity of order passed) u/s263. We rely upon Westlife Development Ltd (2016) (Mum-Trib) in which it was held "allowing the appeal (i) that jurisdiction aspect of the order passed in the primary proceedings can be examined in collateral proceedings also. Thus, the assessee could be permitted to challenge the validity of the order passed u/s263 on the ground that the assessment order was non est". Since the reassessment order itself is bad in law, therefore, ld counsel for the assessee, rightly contended that the same cannot be revised u/s263. Only valid reassessment order can be revised u/s263. On this ground itself the proceedings u/s263 are bad in law and liable to be quashed. We accordingly, set aside the order of ld PCIT passed u/s263 and quash the same."

x) Westlife Development Ltd v/s PCIT, (2016) 49 ITR 406 (Mum-Trib) ITA No.688/ Mum/2016, order dated 24/06/2016; wherein the Tribunal held as under:-

"8.8. Similar view was taken in Dhiraj Suri (2006) (Del-Trib). In the said case, appeal was filed by the assessee before the Tribunal against the levy of penalty. In the appeal challenging the penalty order, the assessee challenged the validity of block assessment order which had determined the tax liability of the assessee on the basis of which penalty was levied subsequently. The revenue objected with respect to the ground of the assessee raising jurisdictional issues of assessment proceedings in the appeal against the penalty order. After analysing the legal position, as clarified by PV Doshi (Guj) and Jainaravan Babulal (1988) (Bom) the bench held as that if the block assessment itself is without jurisdiction then there is no question of levy of any penalty u/s158BFA(2) and therefore, it is open to the assessee to set up the question of validity of the assessment in the appeal against the levy of penalty.

8.9. We also derive support from Inventors Industrial Corporation Ltd (1991) (Bom) wherein it was held that assessee was entitled to challenge the jurisdiction of the AO to initiate re-assessment proceedings before the CIT(A) in the second round of proceedings, even though he had not raised it in earlier proceedings before the AO or in the earlier appeal.

8.10. Thus, on the basis of aforesaid discussion we can safely hold that as per law, the assessee should be permitted to challenge the validity of order passed u/s263 on the ground that the impugned assessment order was non est and we hold accordingly.

10. If the impugned assessment order passed u/s143(3) was illegal or nullity in the eyes of law, then, whether the CIT had a valid jurisdiction to pass the impugned order u/s263 to revise the non est assessment order:*** Having decided the aforesaid 2 issues, the next issue that is to be decided by us is about the validity of order passed u/s263 by the ld CIT seeking to revise the assessment order which was nullity in the eyes of law. 10.1. We have discussed in detail in earlier part of our order that an invalid order cannot give birth to legally valid proceedings. It is further noticed by us that some of the judgments relied upon by the ld counsel have already addressed this 12 M/s. Maheshwari Coal Benefication & Infrastructure Pvt. Ltd.

AY 2017-18 & 2019-20 issue. This issue has also been decided by Krishna Kumar Saraf (2016) (Del- Trib). The relevant part of the order is reproduced below:

11. Thus, after taking into account all the facts and circumstances of the case, we find that in this case, the original assessment order passed u/s143(3) dt.24- 10-13 was null & void in the eyes of law as the same was passed upon a non- existing entity and, therefore, the ld CIT could not have assumed jurisdiction under the law to make revision of a non-est order and, therefore, the impugned order passed u/s263 by the ld CIT is also nullity in the eyes of law and therefore, the same is hereby quashed."

10. Consequent upon the aforesaid observations, we hold that the jurisdiction assumed under section 263 by the learned PCIT and by directing the Assessing Officer to reframe the assessment for assessment year 2017- 18, is treated as bad-in-law and is hereby quashed. Thus, ground no.3 and additional ground no.1, raised by the assessee are allowed.

11. Insofar as ground no.1, the same is reproduced below:-

"Gr.No.1 "On the fact & circumstances of the case & in law, assessment made u/s143(3) rws.153A dt.29-9-21 for AY17-18 is neither erroneous nor prejudicial to the interest of revenue; issue of excess stock found during survey (dt.26-9-16) of Rs.2,18,17,729 has considered & accepted by the AO after examining the same through query dt.31-8-21 & reply dt.8-9-21 submitted before the AO; it is a complete enquiry & verification made by the AO; the AO has taken a possible view which is tenable as per law; in absence of both/ twin pre-requisite condition i.e., erroneousness & prejudicial to the interest of revenue, order made u/s263 by the Id PCIT would be invalid and is liable to be quashed.

12. During the course of hearing, it is submission of the learned Counsel for the assessee that the issue of excess stock of ` 2,18,17,729, found during course of survey conducted has been verified/considered and accepted by the Assessing Officer after examining the same through query dated 31/08/2021 and assessee‟s reply dated 08/09/2021 furnished before the Assessing Officer in assessment proceedings made under section 153A of the Act, it is a case of 13 M/s. Maheshwari Coal Benefication & Infrastructure Pvt. Ltd.

AY 2017-18 & 2019-20 complete enquiry and after thorough verification made by the Assessing Officer. The Assessing Officer has taken a considered view after examining the reply of the assessee that excess stock has been shown as additional income in the Profit & Loss Account and which was included in the closing stock shown as on 31/03/2017 in the assessee‟s books of account, which view is tenable in accordance with law. Thus, it is submitted that the assessment order cannot be said to be erroneous and consequently, it cannot be revised under section 263, for the reason that there should be twin pre-requisite/ condition i.e., erroneousness and prejudicial to the interests of Revenue must remain in the order passed under section 153A of the Act, which is absent in this instant case. It is the further submission of the learned Counsel for the assessee that the Assessing Officer issued notice dated 31/08/2021, a copy of which is placed on record at Page 65 to 67 of the Paper Book-1 requiring the assessee to explain the issue of excess stock of ` 2,18,17,729 found on account of coal during the course of survey conducted. Thereafter, the assessee furnished reply dated 15/09/2021, a copy of which is placed on record at Page 61 to 64 of the Paper Book-1, stating as under:-

"That on survey proceeding u/s133A on dated 26-9-16 at the business premises of the assessee, excess stock of coal of Rs.2,18,17,729 at the site premises was found and same being surrendered by the director of the company as additional income in addition to regular income for the AY17-18. The above excess stock amounting to Rs.2,18,17,729 found during the course of survey proceedings was duly considered as additional income and shown separately under the head "Extra Ordinary items" as over valued stock surrendered during survey under IT Act and income tax has been duly calculated and paid as per computation of total income in AY17-18. The assessee had income of Rs.60,53,948 as profit before extra-ordinary items and tax. The books of accounts are audited as per Companies Act, 2013 and as per section44AB. All the vouchers are duly vouched and account for in the books of accounts of the assessee during financial year 16-17."

M/s. Maheshwari Coal Benefication & Infrastructure Pvt. Ltd.

AY 2017-18 & 2019-20

13. It is the further submission of the learned Counsel for the assessee that the Assessing Officer, after considering the reply submitted by the assessee before him and after verifying the relevant details of books of account and other details/submissions, accepted the version of the assessee that the assessee has duly incorporated the „additional income‟ on account of excess stock found on „Coal‟ which has been surrendered during the course of survey and the Assessing Officer has not made any further addition on that account. The Assessing Officer has duly verified the accounts of the assessee and after being satisfied, by taking a possible view, the Assessing Officer has chosen not to make any further addition on that account. Thus, the learned Counsel for the assessee submitted that it is a case of complete enquiry and verification made by the Assessing Officer and has taken a possible view which is tenable as per law and in the absence of both/twin pre-requisite conditions i.e., erroneousness and prejudicial to the interests of Revenue, order made under section 263 by the learned PCIT would be invalid and is liable to be quashed. It is submitted that it is not a case of „lack of enquiry‟, query has been issued, reply has been submitted and thereafter due verification of the issue was made by the Assessing Officer, the AO has accepted the contention of the assessee. In support of the arguments put forth by the learned Counsel for the assessee, relied upon the following case laws:-

 PCIT v. Clix Finance India (P) Ltd. (2024) 160 taxmann.com 357 (Del HC);  CIT v. Rajesh Mahajan (2024) 168 taxmann.com 628 (P&H HC);

M/s. Maheshwari Coal Benefication & Infrastructure Pvt. Ltd.

AY 2017-18 & 2019-20  PCIT v. Klaxon Trading (P) Ltd. (2023) 7 NYPCTR 1705 (Del HC);  PCIT v. Mohak Real Estate (P) Ltd. (2024) 161 taxmann.com 388 (Del HC);  BNP Paribas v. CIT, (2024) 38 NYPTTJ 1002 (Mum-Trib).

14. On the other hand, the learned Departmental Representative submitted that there was absolute failure on the part of the Assessing Officer to conduct enquiry/ examination on the issue of excess stock found on survey which has been nullified by the assessee and further, the Assessing Officer has also not applied provisions of section 115BBE of the Act on such surrendered excess stock of ` 2,18,17,729 found during the survey, therefore, on both the counts, the learned PCIT has correctly revised the assessment order passed under section 153A r/w section 143(3) of the Act and the learned Depart- mental Representative has requested not to disturb the impugned revisionary order passed by the learned PCIT under section 263 of the Act.

15. We find that since, on the very issue of excess stock found of R ` 2,18,17,729 during survey conducted has been verified by issuing query and thereupon reply furnished by the assessee before the Assessing Officer, the Assessing Officer having issued notice by raising query under section 142(1) of the Act asking the assessee to explain the issue of excess stock found of ` 2,18,17,729 on account of coal during survey conducted upon assessee, thereafter, furnishing of reply by the assessee explaining that it had already included in the Profit & Loss Account and thus, it is a case of complete enquiry/verification made by the Assessing Officer. Thus, in our considered opinion, the Assessing Officer has taken a considered view after examining the reply of the assessee that excess stock has been shown as additional 16 M/s. Maheshwari Coal Benefication & Infrastructure Pvt. Ltd.

AY 2017-18 & 2019-20 income in the Profit & Loss Account and which was included in the closing stock in the books of account. Consequently, we hold that the assessment order passed by the Assessing Officer is not an erroneous order and hence the twin conditions do not fulfill by the learned PCIT while framing revisionary order passed under section 263 of the Act. We further noticed that the learned PCIT has not pointed out any definite and specific error in the original assessment order and observed that the inquiry made by the Assessing Officer was inadequate or improper without first pointing out the error in the original assessment order passed by the Assessing Officer. Hence, we hold that the impugned order passed under section 263 by the learned PCIT is beyond jurisdiction, bad in law which is treated as invalid and is hereby quashed.

i) PCIT v/s Clix Finance India (P) Ltd. (2024) 160 taxmann.com 357 (Del HC) wherein the Court held as under:-

"20. Cls.(a) of Explanation-2 to sec263 further stipulates that if an order is passed without making an enquiry or verification which should have been made, the same would bestow a revisional power upon the CIT. However, the said Clause or any other condition laid down in Explanation- 2 does not warrant recording of the said enquiry or verification in its entirety in the assessment order.

21. Admittedly, in the instant case, the questionnaire dt.2-11-04, which has been annexed and brought on record in the present appeal, would manifest that the AO had asked for the allowability of the claims with respect to the issues in question. Consequently, the assessee duly furnished explanations thereof vide replies dt.9-12-04, 20-12-04 and 6- 1-05. Thus, it is not a case where no enquiry whatsoever has been conducted by the AO with respect to the claims u/c. However, this leads us to an ancillary que- whether the mandate of law for invoking the powers u/s263 includes the cases where either an adequate enquiry has not been made and the same has not been recorded in the order of assessment or the said authority is circumscribed to only consider the cases where no enquiry has been conducted at all.

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22. Reliance can be placed on Sunbeam Auto Ltd (2009) (Del HC), wherein, it was held that if the AO has not provided detailed reasons with respect to each and every item of deduction etc. in the assessment order, that by itself would not reflect a non-application of mind by the AO. It was further held that merely inadequacy of enquiry would not confer the power of revision u/s263 on the CIT. The relevant para of the said decision reads as under:-

"17. ...The first issue that arises for our consideration is about the exercise of power by the CIT u/s263. As noted above, the submission of ld counsel for the Revenue was that while passing the assessment order, the AO did not consider this aspect specifically whether the expenditure in question was revenue or capital expenditure. This argument predicates on the assessment order, which apparently does not give any reasons while allowing the entire expenditure as revenue expenditure. However, that by itself would not be indicative of the fact that the AO had not applied his mind on the issue. There are judgments galore laying down the principle that the AO in the assessment order is not required to give detailed reason in respect of each and every item of deduction, etc. Therefore, one has to see from the record as to whether there was application of mind before allowing the expenditure in question as revenue expenditure. Ld counsel for the assessee is right in his submission that one has to keep in mind the distinction between "lack of inquiry" and "inadequate inquiry". If there was any inquiry, even inadequate that would not by itself give occasion to the CIT to pass orders u/s263, merely because he has a different opinion in the matter. It is only in cases of "lack of inquiry" that such a course of action would be open. In Gabriel India Ltd (1993) (Bom HC), law on this aspect was discussed in the following manner (page 113)..."

23. A similar view was taken by Anil Kumar Sharma (2010) (Del HC), wherein, it was held that once it is inferred from the record of assessment that AO has applied its mind, the proceedings u/s263 would fall in the category of CIT having a different opinion. Para 8 of the said decision reads as under:-

"8. In view of the above discussion, it is apparent that the Tribunal arrived at a conclusive finding that, though the assessment order does not patently indicate that the issue in question had been considered by the AO, the record showed that the AO had applied his mind. Once such application of mind is discernible from the record, the proceedings u/s263 would fall into the area of the CIT having a different opinion. We are of the view that the findings of facts arrived at by the Tribunal do not warrant interference of this court. That being the position, the present case would not be one of "lack of inquiry" and, even if the inquiry was termed inadequate, following Sunbeam Auto Ltd (2009) (Del HC): "that would not by itself give occasion to the CIT to pass orders u/s263, merely because he has a different opinion in the matter." No substantial question of law arises for our consideration."

24. In Ashish Rajpal as well, this Court was of the view that the fact that a query was raised during the course of scrutiny which was satisfactorily answered by the assessee but did not get reflected in the assessment order, would not by itself lead to a conclusion that there was no enquiry with respect to transactions carried out by the assessee. 18

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25. Further, Malabar Industrial Co Ltd (2000) (SC), enunciates the meaning and intent of the phrase "prejudicial to the interests of the Revenue", in the following words:-

"10. The phrase "prejudicial to the interests of the Revenue" has to be read in conjunction with an erroneous order passed by the AO. Every loss of revenue as a consequence of an order of the AO cannot be treated as prejudicial to the interests of the Revenue, for example, when an ITO adopted one of the courses permissible in law and it has resulted in loss of revenue; or where two views are possible and the ITO has taken one view with which the CIT does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the Revenue unless the view taken by the ITO is unsustainable in law. ......"

27. Considering the aforesaid judicial pronouncements, it can be safely concluded that inadequacy of enquiry by the AO with respect to certain claims would not in itself be a reason to invoke the powers enshrined in sec263. The Revenue in the instant case has not been able to make out a sufficient case that the CIT has exercised the power in accordance with law. Rather, in our considered opinion, the facts of the case do not indicate that the twin conditions contained in Sec 263 are fulfilled in its letter and spirit.

28. Notably, the Tribunal, while making a categorical finding that the CIT had failed to point out any definite or specific error in the assessment order, has satisfactorily explained both the claims in question in Para 8.2 of its order, which reads as under:-

"8.2 In the Impugned Order, the ld CIT-IV, Delhi held that the AO had not examined the aforesaid 2 issues properly and, therefore, set aside the issues for further inquiries to be conducted by the AO. As regards the first issue is concerned, we note that out of total provision of Rs.1114.68 lacs, a sum of Rs.7,60,76,105 was suo moto added back in the computation of income and a further sum of Rs. 73,46,160- was disallowed by the AO in the original assessment order dt.30-3-05. Therefore, out of Rs.1114.68 lacs, Rs.834.22 lacs already stood disallowed in the original assessment order. The balance amount represented actual write off which was palpably clear from page 2 of the impugned order itself. No deduction on account of any such provision was, therefore, allowed to the assessee. Hence, there is no error or prejudice to the interest of revenue. As regards second issue it was noted that interest rate swap was an actual loss and only the net loss of Rs.114.05 lacs after setting of gain of interest rate swap was claimed as deduction. However, we find that both these issues were duly examined by the AO vide Questionnaire dt.2-11-04 (Page 1-2 of the PB) to which replies dt.9-12-04, 20-12-04 and 6-1-05 (Page No.3-39 of PB-1) were furnished and, therefore, the finding of the ld CIT that the issues were not examined properly was not correct. Even the ld CIT has not pointed out the definite and specific error in the original assessment order and observed that the inquiry made by the AO was inadequate or improper without first pointing out the error in the original assessment order passed by the AO, particularly because both the aforesaid issues were duly examined at the stage of the original assessment proceedings, hence, the impugned order is beyond jurisdiction, bad in law and void-ab-initio."

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29. It is discernible from the afore-noted findings of the Tribunal that both the claims were duly examined during the original assessment proceedings itself and neither there was any error nor the same was prejudicial to the interests of the Revenue. Thus, the findings of fact arrived at by the Tribunal do not warrant any interference of this Court."

ii) PCIT v. Mohak Real Estate (P) Ltd (2024) 161 taxmann.com 388 (Del HC) wherein the Court held as under:-

"4.1. In Max India Ltd (2007) (SC), the SC referred to its earlier judgment in Malabar Industrial Co Ltd (2000) (SC) and reiterated that every loss of revenue as a consequence of an order of the AO cannot be treated as prejudicial to the interest of Revenue within the meaning of sec263; and that where the ITO adopts one of the courses permissible in law and the same results in loss of revenue or where 2 views are possible and the ITO has taken one view with which the CIT does not agree, it cannot be treated as an erroneous order prejudicial to the interest of the Revenue, unless the view taken by the ITO is not sustainable in law.

4.2. In Kwality Steel Suppliers Complex (2017) (SC), while dealing with sec263, the SC held thus:

"7. This provision has come for interpretation time and again before this Court. Such a power given to the CIT to revise the order of the AO is held to be constitutionally valid having regard to the fact that the Deptt has no right of appeal to the CIT(A) against any order passed by the AO. It is for this reason, sec263 is enacted to empower the CIT with the authority of revising the order of the AO, where the order is erroneous and the error has resulted in prejudice to the interests of the Revenue.

As is clear from the language of the provision, there has to be a proper application of mind by the CIT to come to a firm conclusion that the order of the AO is erroneous and prejudicial to the interests of the Revenue. Thus, 2 conditions need to be satisfied for invoking such a power by the CIT, which are: (i) the order of the AO sought to be revised is erroneous; and (ii) it is prejudicial to the interests of the Revenue. (see Malabar Industrial Co Ltd)

8. At the same time, this Court has also laid down that this provision cannot be invoked to correct each and every type of mistake or error committed by the AO. While interpreting the expression "prejudicial to the interests of the Revenue", it is also held that order of the AO cannot be termed as prejudicial simply because AO adopted one of the courses permissible in law and it has resulted in loss of revenue, or where 2 views are possible and the AO has taken one view with which the CIT did not agree. (see Arvind Jewellers.)

9. It is clear from the above that where 2 views are possible and the AO has taken one view and the CIT again revised the said order on the ground that he does not agree with the view taken by the AO, in such circumstances the assessment order cannot be treated as an order erroneous or prejudicial to the interest of the Revenue. Reason is simple.

M/s. Maheshwari Coal Benefication & Infrastructure Pvt. Ltd.

AY 2017-18 & 2019-20 While exercising the revisionary jurisdiction, the CIT is not sitting in appeal."

4.3. In Delhi Airport Metro Express (P) Ltd (2017) (Del HC), a Co- ordinate Bench of this Court examined the scope of sec263 and observed that the conclusion about the order of the AO being erroneous and prejudicial to the interest of Revenue has to be arrived at by the PCIT only after carrying out at least a minimal enquiry and if the same is not done, the conclusion of the PCIT gets vitiated; that the PCIT has to record reasons in order to justify exercise of jurisdiction u/s263; and that where the aforesaid was not carried out, the order passed u/s263 was not sustainable.

4.4. In Sunbeam Auto Ltd (2009) (Del HC), a Co-ordinate Bench of this Court held that one has to keep in mind the distinction between lack of enquiry and inadequate enquiry; and that merely because the enquiry carried out was inadequate, that by itself would not justify invoking sec263.

4.5. In New Delhi Television Ltd (2013) (Del HC), a Co-ordinate Bench of this Court examined the provision u/c herein and observed thus:

"In para 6 of the order dt.29-3-07, the CIT uses the expression "erroneous and prejudicial to the interest of Revenue" but does not cite any reason or ground for the said conclusion. Use of the words without elucidation indicates, that the said observations are presumptive or a suspicion and mere repetition of words, but this does not satisfy the requirements u/s263. Order u/s263 must be clear and must set out logical ground and reason as to why the assessment is erroneous and prejudicial to the interest of the Revenue."

5. Falling back to the present case, a perusal of the assessment order dt.7-12-18 would clearly show it not to be a case of complete absence of enquiry.

As reflected from para 2 of the said assessment order, in compliance with the statutory notices, the assessee had electronically submitted the details and replies and subsequently, at request of the assessee, manual scrutiny assessment on account of technical difficulties faced by the assessee was carried out with necessary approvals and hearings were held on various dates during which the documents and replies submitted by the assessee were duly considered. Further, as reflected from records produced before the Tribunal, the AO had sent notice u/s142(1) along with a detailed questionnaire comprising 38 ques to which replies were submitted by the assessee and the AO duly applied mind to the same before passing the assessment order. That having been done, it could not be labelled as a case of lack of enquiry and consequently, invocation of sec263 was not justified in the light of judicial precedents quoted above.

6. Further, according to records, prior to passing the order u/s263, the PCIT had issued SCN dt.15-2-21, which was duly served on the assessee. As mentioned in the order u/s263, on behalf of the assessee, not just written submissions in response to the SCN were filed but even a CA and 21 M/s. Maheshwari Coal Benefication & Infrastructure Pvt. Ltd.

AY 2017-18 & 2019-20 an advocate on behalf of the assessee attended hearings. But in the order u/s263, the PCIT did not even whisper about the contents of reply to SCN, what to say of holding any enquiry. In the name of dealing with the reply to SCN, the PCIT simply observed that on behalf of the assessee, legal issue of assumption of jurisdiction u/s263 was raised. But even on that aspect, the PCIT did not record any discussion in the order u/s263.

7. In the order u/s263, the PCIT also did not record the reasons for arriving at the conclusion that the assessment order was erroneous and prejudicial to the interest of Revenue, what to say of basing the said discussion on some minimal enquiry.

8. Therefore, we have no hesitation to hold that the order u/s263 was not sustainable in the eyes of law. Consequently, we find no infirmity in the impugned order of the Tribunal."

iii) CIT v/s Rajesh Mahajan (2024) 168 taxmann.com 628 (P&H HC) wherein the Court held as under:-

"6. ...Finding of the fact has been arrived at by the ITAT that the queries were raised by the AO and supporting evidence was produced by the Respondent(s) regarding the cash found at Panipat House and Delhi House which is on record at particular Pages as mentioned in the ITAT order (namely Pages 130 to 150 and Pages 151 to 154) of the PB.

7. We are of the considered view that in the final order passed by the AO, he need not mention about the detailed enquiry which he has conducted and merely because the AO‟s order may be one page order, imposing the required tax to be paid by the Respondent(s), if so required, or reaches to a conclusion that no payment is required to be made, the entire enquiry proceedings can be seen from the PB since, the ITAT has examined the PB and found that queries were raised by the AO and after due enquiry and after examining the necessary evidence, the assessment order has been passed. Its observations that the order is not erroneous, cannot be again re-examined by us in Appeal as it would be examining the factual aspects again."

iv) PCIT v. Klaxon Trading (P) Ltd (2023) 7 NYPCTR 1705 (Del HC) wherein the Court held as under:-

"26. The other argument advanced on behalf of the revenue is that because the original assessment order dt.30-12-16 does not refer to the queries raised, it is unsustainable in law. In our opinion, this submission is completely misconceived. In our view, as noticed above, while exercising powers u/s263, the concerned officer is entitled to examine the entire record, which includes not only the assessment order but also the notices issued, queries raised, responses received, and the material/ evidence placed on record by the assessee. In a nutshell, the record should disclose whether the AO had applied his mind to various facets that cropped up during the assessment proceedings. In other words, 22 M/s. Maheshwari Coal Benefication & Infrastructure Pvt. Ltd.

AY 2017-18 & 2019-20 furnishing reasons in the assessment order is not the sine qua non of a sustainable assessment order. Courts have repeatedly stated that the AO is not required to give detailed reasons for accepting or not accepting a particular transaction. As observed above, the record should reflect whether the AO applied his mind to the transaction in issue. (Ashish Rajpal (2009) (Del HC) and Sunbeam Auto Ltd (2009) (Del HC))"

v) BNP Paribas v. CIT (2024) 38 NYPTTJ 1002 (Mum-Trib), wherein the Tribunal held as under:-

"16. It is a settled position of law that powers u/s263 can be exercised by the CIT on satisfaction of twin conditions, i.e., the assessment order should be erroneous and prejudicial to the interest of the Revenue. By „erroneous‟ is meant contrary to law. Thus, this power cannot be exercised unless the CIT is able to establish that the order of the AO is erroneous and prejudicial to the interest of the Revenue. Thus, where there are 2 possible views and the AO has taken one of the possible views, no action to exercise powers of revision can arise, nor can revisional power be exercised for directing a fuller enquiry to find out if the view taken is erroneous. This power of revision can be exercised only where no enquiry, as required under the law, is done. It is not open to enquire in case of inadequate inquiry. Our view is fortified by Nirav Modi (2017) (Bom HC)".

17. Nirma Chemical Works (P) Ltd (2009) (Guj) has observed as under:

"if assessment order were to incorporate the reasons for upholding the claim made by an assessee, the result would be an epitome and not an assessment order. In this case, during the assessment proceedings for both the AYs, the AO AY09-10 Officer issued a query memo to the assessee, calling upon him to justify the genuineness of the gifts. The assessee responded to the same by giving evidence of the communications received from his father and his sister i.e. the donors of the gifts along with the statement of their Bank accounts. On perusal, the AO was satisfied about the crediworthiness/ capacity of the donors, the source from where these funds have come and also the crediworthiness/ capacity of the donor. Once the AO was satisfied with regard to the same, there was no further requirement on the part of the AO to disclose his satisfaction in the assessment order passed thereon. Thus, this objection on the part of the Revenue cannot be accepted."

18. We find that Sunbeam Auto Ltd (2009) (Del HC) has held as held as under:

"12. We have considered the rival submissions of the counsel on the other side and have gone through the records. The first issue that arises for our consideration is about the exercise of power by the CIT u/s263. As noted above, the submission of ld counsel for the Revenue was that while passing the assessment order, the AO did not consider this aspect specifically whether the expenditure in question was revenue or capital expenditure. This argument predicates on the assessment order, which 23 M/s. Maheshwari Coal Benefication & Infrastructure Pvt. Ltd.

AY 2017-18 & 2019-20 apparently does not give any reasons while allowing the entire expenditure as revenue expenditure. However, that by itself would not be indicative of the fact that the AO had not applied his mind on the issue. There are judgments galore laying down the principle that the AO in the assessing order is not required to give detailed reason in respect of each and every item of deduction, etc. Therefore, one has to see from the record as to whether there was application of mind before allowing the expenditure in question as revenue expenditure. Ld counsel for the assessee is right in his submission that one has to keep in mind the distinction between "lack of inquiry" and "inadequate inquiry". If there was any inquiry, even inadequate that would not by itself give occasion to the CIT to pass orders u/s263, merely because he has different opinion in the matter. It is only in cases of "lack of inquiry" that such a course of action would be open".

19. Considering the facts of the case in totality, in light of the judicial decisions discussed hereinabove, we do not find any error or infirmity in the assessment order which could make it erroneous and prejudicial to the interest of the revenue. Therefore, we set aside the order of the CIT dt.27-3-24, and restore that of the AO dt.8-4-21."

16. Consequently, keeping in view the overall facts and circumstances of the case and in accordance with law as cited supra, we hold that the impugned revisionary order passed under section 263 of the Act by the learned PCIT is invalid hence bad-in-law which is hereby quashed on this issue.

17. Now, the issue which is inter-connected with ground no.1, as disposed off above, which remains to be adjudicated here is that, the learned PCIT has invoked provisions of Explanation-2 inserted by the Finance Act, 2015, w.e.f. 01/06/2015, in this regard, it is submission of the learned Counsel for the assessee that the provisions of Explanation-2, is a deeming provision which is well settled position of law construing a deeming provision which is to be strictly interpreted and that the legal fictions should not be stretched beyond the purpose for which they were enacted and it should be kept in mind that 24 M/s. Maheshwari Coal Benefication & Infrastructure Pvt. Ltd.

AY 2017-18 & 2019-20 deeming provision should be in respect of facts from which legal consequences will follow. So, as per Explanation-2, deeming fiction of law that the order of the Assessing Officer is deemed to be erroneous insofar as it is prejudicial to the interests of the Revenue only if in the opinion of the learned PCIT, which necessarily has to be a finding of fact in the following four events. So, the learned PCIT has to make a finding of fact in the following manner:-

(a) the assessment order passed by the AO is without inquiry or verification,

(b) the AO allowed a claim without enquiry,

(c) the AO passed the order not in accordance with any order, directions or instructions issued by the CBDT u/s119,

(d) the AO passed the order not in accordance to the decision of the Hon‟ble jurisdictional HC or the Hon‟ble SC, which is prejudicial to the assessee, which is rendered either in the assessee‟s case or any other person.

18. In support of his arguments, the learned Counsel for the assessee relied upon the following judicial precedents:-

 Nalco Company v/s CIT, (2021) (Pune-Trib) 210 TTJ 369; and  Gestamp Automotive India P. Ltd. v/s PCIT (2021) (Pune-Trib) ITA No.216/ Pune/2021, order dated 20/10/2021.

19. We have carefully considered the rival contentions, perused the orders of the authorities below and the material placed on record. We find that the expression in Explanation-2 "in the opinion of the CIT", it cannot be said to be an arbitrary opinion bereft of facts or law by the CIT. It must be the considered opinion of the CIT which is based on the correct facts and in accordance to well established principles of law. The aforesaid clauses only provide for situation where inquiries or verifications should be made by 25 M/s. Maheshwari Coal Benefication & Infrastructure Pvt. Ltd.

AY 2017-18 & 2019-20 reasonable and prudent officer in the context of the case. Such clauses cannot be read to authorize or give unfettered powers to the CIT to revise each and every assessment order. The applicability of the clauses is thus essentially contextual. It has to be kept in mind that while the CIT is exercising his revisional jurisdiction over the assessment order, he has to exercise his power in an objective manner and not arbitrarily or subjectively since he is discharging quasi-judicial powers vested in him while doing so. Thus, according to us, Explanation-2 inserted by the Parliament under section 263 cannot override the main section i.e., section 263(1).

20. The next issue, which is also inter-connected with ground no.1, to be adjudicated is that of the applicability of provisions of section 115BBE on excess business stock of „Coal‟ found during survey, which is included in stock/ recorded in the books of account, the learned Counsel for the assessee submitted that it is part and partial of the „net profit‟ shown in the Profit & Loss Account/shown in the computation under the head „Income from business‟. It is submitted that the excess stock found during the survey under section 133A is not separately and clearly identifiable but is part of mixed lots of stock found at the premises which included declared stock as per books of account and also the excess stock as computed by the authorised officers during the survey operation at the premise. Since excess stock is a result of suppression of profit from business over the years and has not been kept identifiable separately but is the part of overall physical stock found, provisions of section 69/ 69B cannot be made applicable as primary condition 26 M/s. Maheshwari Coal Benefication & Infrastructure Pvt. Ltd.

AY 2017-18 & 2019-20 for invoking the provision is that the asset should be separately identifiable and it should have independent physical existence of its own. Since excess stock is a result of suppression of profit from business over the years and has not been kept identifiable separately but i.e., the part of overall physical stock found and therefore, the investment in the excess stock has to be treated as business income. For the argument, the learned Counsel for the assessee relied on the decision of the Hon‟ble Andhra Pradesh High Court in PCIT v/s Deccan Jewellers (P) Ltd. (2021) 132 taxmann.com 73 (AP). In this regard, it is the submission of the learned Counsel for the assessee that the income of ` 2,18,17,729 surrendered during the course of survey cannot be brought to tax under the deeming provisions of section 69 and 69B and the same has been rightly offered to tax under the head "business income". In absence of deeming provisions, the question of application of provisions of section 115BBE does not arise for consideration. it is the further contention of the learned Counsel for the assessee that there is no findings recorded by the learned PCIT as to how the deeming provisions are applicable in the instant case and the order so passed by the Assessing Officer is erroneous. In support of this contention, the learned Counsel for the assessee relied on the decision of the Co-ordinate Bench of the Tribunal, Chandigarh Bench, in Ravinder Kumar Bansal, (2023) (Chd-Trib) ITA No.319/Chd/2022; and PCIT v/s Mahavir Ashok Enterprises Pvt. Ltd (2024) 167 taxmann.com 396 (Chhattisgarh) and PCIT v. Deccan Jewellers (P) Ltd (2021) 132 taxmann.com 73 (AP).

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21. We have carefully considered the rival contentions, perused the orders of the authorities below and the material placed on record. Keeping in view the aforesaid contentions of the learned Counsel for the assessee and in accordance with the provisions of law, we are of the opinion that the excess business stock was found during survey proceedings in the business premises of the assessee, which duly recorded in the books of account. Provisions of section 69 do not attract as excess stock cannot be treated as undisclosed income within the meaning of section 69, which the Assessing Officer has accepted and taken it as one of the possible views. Thus, we are in agreement with the Assessing Officer that he has accepted holding it to be the correct view. The order passed by the Assessing Officer is tenable as per law and it cannot be held as erroneous order. Thus, one of the conditions has not been satisfied in this case and thus, order passed under section 263 is unsustainable in law on the issue of application of section 115BBE on excess stock found on survey which has been shown as additional business income in the return of income filed by the assessee. For this proposition, we find relevant to quote the following case laws:-

i) PCIT v. Mahavir Ashok Enterprises P Ltd (2024) 167 taxmann.com 396 (Chhattisgarh), the Court held as under:

"14. ...However, in appeal preferred by the assessee before the Tribunal, the Tribunal in para 7 of the order impugned, has proposed 2 issues which state as under:-

"7. In exercise of powers conferred u/s263, the PCIT has proposed revision of the assessment order on 2 counts: (i) The excess stock surrendered by the assessee during the survey, returned as business income, is liable to be considered as unexplained investment u/s69 and consequently tax was required to be enforced in terms of section 115BBE. (ii) The figures of purchase in the in the audited accounts drawn as on 31-3-17 were not 28 M/s. Maheshwari Coal Benefication & Infrastructure Pvt. Ltd.

AY 2017-18 & 2019-20 reconciled with the figures in the Trial Balance as on the date of survey i.e., 6-3-17;

15. The above stated 2 issues have been considered by the Tribunal against the Revenue. With regard to the first issue, the ld Tribunal relying upon the decisions of 2 HCs namely, Aacharan Enterprises (P) Ltd (2020) 117 taxmann.com 745 (Raj HC) and Subarna Rice Mill (2018) (Cal HC) has reached to the conclusion that surrender of undisclosed business income would not attract the penal provisions contained in section 115BBE, and proceeded to hold that such an undisclosed business income has been considered as business income of the assessee. Similarly, with regard to the second issue, the Tribunal in its order has held in favour of the assessee and against the Revenue. However, in this regard, it would be appropriate to notice that the AO has issued specific SCN dt.18-12-19 wherein identical question was raised and the assessee was required by the AO to show cause as to why the amount of Rs. 2,25,75,951 be not treated as unexplained investment u/s69 and the tax rate prescribed u/s115BBE be not imposed against which the assessee on 19-12-19 filed reply stating that excess business stock of Rs.2,25,75,951 found during the course of survey proceedings in the business premises of the assessee in the year u/c is duly entered and disclosed in the books of accounts as business income which is included in the net profit. The assessee has further stated in the reply that the assessee is engaged in retail trading of Gold and Silver Ornaments since so many years and the object for which the Company is incorporated is also trading of Gold and Silver Ornaments. It has also been stated in the reply that the business activity of the assessee is also accepted and assessed as such in earlier year assessments and as the excess business stock found during survey proceedings under the IT Act during the year u/c in the business premises of the assessee and duly recorded in the books of accounts of the concerned year, section 69 would not be attracted to the assessee.

The assessee has also stated in the reply that as far as nature and source of investments is concerned, the investments are in the form business stock of Gold and Silver Ornaments found in the business premises and explanation of the business source of investments given on the basis of documents available in the business premises during the course of survey proceedings by the Director of the assessee was very well verified by the survey team and accepted, and hence, the excess stock of Rs.2,25,75,951 declared during the course of survey proceedings in the business premises cannot be treated as unexplained investment u/s69 and as section 69 does not attract in this situation, question of applicability of tax rate of 60% u/s115BBE does not arise. The AO considered the reply and found substance in the submission raised on behalf of the assessee and only added Rs.1,42,715 to the business income of the assessee for the year u/c.

16. In this regard, Max India Ltd (2007) (SC) may be noticed herein profitably in which their Lordships have held that every loss of revenue as a consequence of an order of the AO cannot be treated as prejudicial to the interest of the Revenue. When the ITO adopted one of the courses permissible in law and it has resulted in loos of revenue; or where 2 29 M/s. Maheshwari Coal Benefication & Infrastructure Pvt. Ltd.

AY 2017-18 & 2019-20 views are possible and the ITO has taken one view with which the CIT does not agree, it cannot be treated as an erroneous order prejudicial to the interest of the Revenue, unless the view taken by the ITO is unsustainable in law.

17. In this case also, the AO has issued specific SCN to the assessee as to why the excess stock of Rs.2,25,75,951 be treated as unexplained investment u/s 69 which the assessee replied stating that the said excess business stock was found during survey proceedings under the IT Act during the year u/c in the business premises of the assessee and duly recorded in the books of accounts of the concerned year and thus, section 69 would not be attracted to the assessee, as excess stock would not be treated as undisclosed income within the meaning of section 69, which the AO has accepted and taken it as one of the possible views and which the Tribunal has accepted holding to be the correct view.

18. In that view of the matter, we are of the considered opinion that both the twin conditions, namely, the order of the AO sought to be revised is erroneous and it is prejudicial to the interests of the Revenue, are not satisfied at all to invoke the jurisdiction u/s263, as the AO has passed the order of assessment after conducting inquiry. As such, the ld PCIT is absolutely unjustified in invoking the jurisdiction u/s263 which has rightly been set-aside by the Tribunal."

ii) PCIT v. Deccan Jewellers (P) Ltd (2021) 132 taxmann.com 73 (AP HC) dt.2-8-21, the Court held as under:

"11. Challenging the said orders, Ms. M. Kiranmayee, ld Sr.standing counsel for IT, argues that the additional excess stock found in the course of search in these cases ought to have been treated as „undisclosed investment‟ u/s69. The AO did not consider such fact and assessed the additional income as business income @30% instead of 60% by applying section 115BBE. Thus, the assessment orders being erroneous were rightly revised by the PCIT. Hence, the appeals ought to be admitted on the aforesaid substantial questions of law.

12. When there are 2 possible views on the matter and one view has been accepted by the AO after inviting explanation from the assessee and upon being satisfied on such explanation such view cannot be said to be erroneous.

13. As discussed above, explanations had been given by the assessees with regard to the additional income, which were considered and duly accepted by the AO. Assessees relied upon various authorities in support of their explanations which had been duly accepted by the AO. Views of the AO appear to have been approved by the Jt.CIT, Cen-Range, u/s153D. In this factual matrix, it cannot but be accepted that a possible view on the matter had been followed by the AO. In doing so, the AO, in fact, followed the consistent view of various judicial authorities binding on him, namely, where excess stock found in the course of search is neither 30 M/s. Maheshwari Coal Benefication & Infrastructure Pvt. Ltd.

AY 2017-18 & 2019-20 separately identifiable nor had independent physical existence, it cannot be treated as „undisclosed investment‟ u/s69.

14. In the present cases, explanations have been offered by the assessees that excess stock was a result of suppression of profits from business over the years and is a part of the overall stock found. In ITTA No.9 & 14 of 2021, the assessees concerned gave further clarification that the excess stock had been admitted in Sch. „L‟ under the heading, „other operating income‟ under the head "PGB" in Part A of the return filed for the relevant AY. Hence, the excess stock could not have been treated as undisclosed investment u/s69.

15. Section 69 reads as follows:

"Section 69. Unexplained investments.-

Where in the FY immediately preceding the AY the assessee has made investments which are not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of the investments or the explanation offered by him is not, in the opinion of the AO, satisfactory, the value of the investments may be deemed to be the income of the assessee of such FY."

The above sec provides investments would fall within the definition of „undisclosed investment‟ in the event the following conditions are satisfied: Such investment is made in the course of the FY and not reflected in the books of account, if any, maintained by the assessee for any source of income, no explanation is offered by the assessee about the nature and source of investments, and such explanation is not found to be satisfactory in the opinion of the AO. As explanations pursuant to the SCNs issued by the AO had been submitted claiming that the nature and source of the excess stock fell under the heading „PGB‟ and such stock was not specifically identifiable from the profits which had accumulated from earlier years and such explanations being considered and accepted by the AO, which came to be approved by the Jt.CIT, it cannot be said that the condition precedents for holding that the excess stock as „undisclosed investment‟ u/s69 are satisfied.

16. Relying on Spectra Shares & Scrips (P) Ltd (2013) (AP HC), the Tribunal held non-recording of reasons cannot be a ground to come to a conclusion that the opinion of the AO was erroneous for the purposes of sec263. Explanation-2 of sec263 elucidates cases where the opinion of the AO can be treated to be erroneous and prejudicial to the interest of the Revenue. Explanation-2 reads as follows:

"Explanation 2.- For the purposes of this sec, it is hereby declared that an order passed by the AO shall be deemed to be erroneous in so far as it is prejudicial to the interests of the Revenue, if, in the opinion of the PCIT or CIT,- the order is passed without making inquiries or verification which should have been made; the order is passed allowing any relief without inquiring into the claim; the order has not been made in accordance with any order, direction or instruction issued by the Board u/s119; or the order 31 M/s. Maheshwari Coal Benefication & Infrastructure Pvt. Ltd.

AY 2017-18 & 2019-20 has not been passed in accordance with any decision which is prejudicial to the assessee, rendered by the jurisdictional HC or SC in the case of the assessee or any other person."

17. In the present cases, the AO had issued SCNs calling for explanations from the assessees whether excess stock be not treated as „undisclosed investment‟ u/s69. In response to the notices, elaborate explanations were offered by the assessees, which were fortifiable by consistent views by various Benches of the Tribunal as well as the HCs. The AO, upon consideration, accepted the explanation and taxed the additional income as „business income‟ @30% instead of 60% as per section 115BBE.

18. No contrary view either of any HC or the apex Court has been placed before us to demonstrate that the explanations offered by the assessees in the course of assessment were either perverse or contrary to law. In view of such matter, we are constrained to hold no case of perversity or lack of enquiry on the part of the AO is made out so as to render his decision erroneous under Explanation-2 of s. 263. Thus, the revisional powers under the said provision were illegally invoked by the PCIT and his order was rightly set aside by the Tribunal."

iii) Montu Shallu Knitwears v. DCIT (2023) 37 NYPTTJ 1592 (Chd-Trib), ITA No.21/Chd/ 2023; AY19-20, order dated 01/12/2023 the Tribunal held as under:-

"22. In the instant case as well, there is no physical distinction between the accounted stock and unaccounted stock. No such physical distinction was found by the Revenue either. We therefore, find that the difference in stock so found out by the authorities has no independent identity and is in terms of value terms only and thus, part and parcel of entire stock, therefore, it cannot be said that there is an undisclosed asset which existed independently and thus, what is not declared to the Deptt is receipt from business and not any investment as it cannot be co-related with any specific asset and the difference should thus, be treated as business income."

iv) PCIT v. Parshottambhai Maganlal Ramotia (2024) 169 taxmann.com 372 (Guj HC), the Court held as under:-

12. .... the facts on record clearly reveals that the AO had conducted due inquiry on the issue of disclosure made by the assessee and considering the statement of the assessee during the survey making voluntary surrender of professional unaccounted receipts, the same was taxed as such as business income, is in accordance with law. The Tribunal has therefore, rightly held that only because no inquiry was conducted by the AO on record of the survey before him, cannot be the basis for assumption of jurisdiction u/s263, more particularly, when it is not pointed out as to how and what basis such finding was arrived at by the AO and non examination of the records cannot be the basis for coming to the conclusion that the assessment order is erroneous and pre-judicial to the interest of revenue.

M/s. Maheshwari Coal Benefication & Infrastructure Pvt. Ltd.

AY 2017-18 & 2019-20

13. It is a trite law that the PCIT could not have assumed the jurisdiction on mere change of opinion on his part, when the AO while during the course of regular assessment has made inquiry regarding the issue which is the subject matter of the revision.

14. In the facts of the case, though the PCIT would have arrived at a valid finding of error on the basis of his own examination of record including the documents and statement recorded of the assessee during the survey action undertaken u/s133A, but there is nothing on record to point out that how the documents pertaining to survey could not have lead to a reasonable belief as entertained by the AO that the income surrender pertained to the professional receipt which is one of the plausible view on the matter."

22. Keeping in view the overall facts and circumstances of the case and in view of the aforesaid findings, we treat ground no.1, as discussed above, raised by the assessee is allowed.

23. The assessee has further raised additional ground no.2 under Rule 11 of the ITAT Rules, 1963, which is on the legal issue of assumption of jurisdiction by the learned PCIT invoking action under section 263 which goes to the root of the matter and it does not require any further verification of facts out of the facts available on record by relying on National Thermal Power Co. Ltd v/s CIT [1998] 229 ITR 383 (SC), we admit the additional ground of appeal, which reads as under:-

"Addl.Gr.No.2:

On the facts and circumstances of the case and in law, revision order u/s263 dt.20.3.24 by PCIT, Bhopal is invalid; it is without examination of record by PCIT, Bhopal which is sine qua/ pre-requisite for invoking sec263(1) as it is merely based on Proposal sent by Range Head & AO at Nagpur dt.8.5.23 & 2.5.23 to the PCIT, Bhopal for making/dictating to initiate revision u/s263 by recording satisfaction by AO himself that order passed u/s153A rws.143(3) dt.29-9-21 by the then AO is erroneous & prejudicial as the AO exceeded his jurisdiction; contents of the Proposal sent by the AO dt.2-5-23 & SCN u/s263 dt.9.2.24 are same; order u/s263 dt.20.3.24 based on the dictate of AO & 33 M/s. Maheshwari Coal Benefication & Infrastructure Pvt. Ltd.

AY 2017-18 & 2019-20 without examination of the 'record' by PCIT, Bhopal, would be invalid and is liable to be quashed."

24. It is submission of the learned Counsel for the assessee that the Assessing Officer i.e., DCIT, Central Circle-1(1), Nagpur, wrote a letter dated 14/02/2023 to the Senior Audit Officer, Mumbai, a copy of which is placed on record at Page-103 of the Paper Book, raising audit objection by the Revenue Audit Party. Subsequently, the Assessing Officer, Nagpur, sent a proposal vide letter dated 02/05/2023 to the learned PCIT (Central), Nagpur, i.e., through proper channel, a copy of which is placed on record at Page-100 of the Paper Book-2. for framing revisional order under section 263. Thereafter, show cause notice under section 263 dated 09/02/2024, was issued by the learned PCIT, Bhopal, to the assessee, a copy of which is placed on record at Page-105 of the Paper Book-2, initiating the proceedings under section 263 of the Act.

25. It is the contention of the learned Counsel for the assessee that the proposal dated 02/05/2023, sent by the Assessing Officer, Nagpur, to the learned PCIT (Central), Nagpur, through proper channel and subsequently the case was transferred to the Assessing Officer, Raipur, vide order under section 127 of the Act, for framing revision proceedings under section 263 by recording satisfaction by the Assessing Officer, Nagpur himself that the issue had not been verified by the then Assessing Officer (i.e., his predecessor-in- office of the Assessing Officer). Therefore, the initial/ base assessment order made under section 143(3) by the then Assessing Officer is erroneous and 34 M/s. Maheshwari Coal Benefication & Infrastructure Pvt. Ltd.

AY 2017-18 & 2019-20 prejudicial to the interests of Revenue. it is submitted that this act of recording satisfaction by the present Assessing Officer about erroneousness and prejudicial nature of the initial/ base order of his predecessor-in-office of the Assessing Officer is contrary to law under section 263(1). The learned Counsel for the assessee further contended that this proposal of the Assessing Officer, Nagpur, is based on audit objection of the Revenue Audit Party vide letter dated 04/11/2022, stating that the contents of the objection of the Revenue Audit Party and the proposal dated 02/05/2023, sent by the Assessing Officer, Nagpur to the learned PCIT, Nagpur and thereafter, the show cause notice dated 09/02/2024, under section 263 by the learned PCIT, Bhopal are exactly similar as-

(a) the then Assessing Officer has not considered the additional income declared of ` 2,18,17,720 on survey under section 133A;

(b) the said additional income was required to be taxed under section 115BBE as the additional income declared during the survey conducted under section 133A; and

26. It is the further submission of the learned Counsel for the assessee that the act of the learned PCIT, Bhopal, by issuing the show cause notice under section 263 is merely based on proposal made by the Assessing Officer on the satisfaction, dictates of the Assessing Officer which is contrary to law under section 263(1). The contents of the proposal and the words used in the show cause notice are exactly similar. The Revenue failed to bring on record any material evidence to show that the learned PCIT, Bhopal has called for the 35 M/s. Maheshwari Coal Benefication & Infrastructure Pvt. Ltd.

AY 2017-18 & 2019-20 record of the assessee from the Assessing Officer, Raipur and examined the same before issuing the said show cause notice which is also based on the proposal made before him without examination of the record by the learned PCIT himself. Hence, there was no independent satisfaction recorded by him in the said show cause notice which is a pre-condition for making revision under section 263(1), and the same is absent in the instant case. It is the prayer of the learned Counsel for the assessee to quash the impugned order passed under section 263 by the learned PCIT. For these arguments, the learned Counsel for the assessee relied on the following case laws:-

 Ahlcon Parenterals (India) Ltd v. PCIT (2024) 162 taxmann.com 759 (Del-Trib);

 KLG Orchards & Resorts P Ltd v. ITO (2023) (Kol-Trib) ITA No.296/Kol/ 2021 dated 04/01/2023;;

 PCIT v. Reeta Lakhmani (2022) 145 taxmann.com 590 (Cal HC); and  PCIT v/s Sinhotia Metals & Minerals P. Ltd (2023) 455 ITR 736 (Cal. HC).

27. The learned Departmental Representative has submitted that the learned PCIT, Bhopal, has issued notice under section 263 only after examining the record of the assessee as it is clearly mentioned in the show cause notice dated 09/02/2024 that "On examination of assessment record...." or "On examination of P&L account or computation of total income sheet of the assessment records...." and contended that the learned PCIT has initiated revisionary proceedings under section 263 as per law. However, he has not disputed the fact that the Assessing Officer, Nagpur, has made a proposal for framing assessment under section 263 by recording satisfaction 36 M/s. Maheshwari Coal Benefication & Infrastructure Pvt. Ltd.

AY 2017-18 & 2019-20 that the assessment order passed under section 143(3) r/w section 153A was erroneous inasmuch as it was prejudicial to the interests of the Revenue and the Assessing Officer has requested to take remedial measure under section 263 of the Act.

28. We have carefully considered the rival contentions, perused the orders of the authorities below and the material placed on record. We find that the proposal dated 02/05/2023, sent by the Assessing Officer, Nagpur, is based on audit objection of the Revenue Audit Party vide letter date 04/11/2022 and the contents of the objection of the Revenue Audit Party and the proposal dated 02/05/2023, sent by the Assessing Officer, Nagpur, to the learned PCIT, Nagpur and thereafter, show cause notice dated 09/02/2024, issued under section 263 by the learned PCIT, Bhopal, are exactly similar that the then Assessing Officer has not considered the additional income disclosed of ` 2,18,17,720 during the survey conducted under section 133A, the said additional income was required to be taxed under section 115BBE, as the additional income was declared during the survey conducted which resulted under assessment of income of ` 2,18,17,720. We further find that the Revenue has not brought on record any material/ evidence to show that the learned PCIT, Bhopal, has called for the record of the assessee from the Assessing Officer, Raipur and examined the same before issuing the show cause notice. We further note that there was no independent application of mind on the facts of the case and/or no independent satisfaction was recorded in the said show cause notice for the alleged erroneousness and 37 M/s. Maheshwari Coal Benefication & Infrastructure Pvt. Ltd.

AY 2017-18 & 2019-20 nature of prejudicial to the interests of the Revenue, and is a pre-condition for making revisionary order under section 263(1) of the Act, which is absent in this case. Therefore, the revisionary order so framed under section 263 of the Act would not in any way sustainable in the eyes of law and has no legs to stand. We are thus in agreement with the learned Counsel for the assessee who placed reliance on the following judicial pronouncement in support of his arguments which are as under:-

i) Ahlcon Parenterals (India) Ltd v. PCIT (2024) 162 taxmann.com 759 (Del-Trib) the Tribunal held as under:-

"9. The ld DR, on the contrary, relies Stewarts & Lloyds of India Ltd (2016) 67 taxmann.com 41 (Kol-Trib) to contend that there is no prohibition u/s263 for Revisional Authority to act on the basis of the proposal by the AO if other conditions specified under the said sec are satisfied. The ld DR has, thus, defended the action of the PCIT u/s263 submitting that there may have been audit objection and proposal, otherwise, it was on the basis of records the PCIT has exercised its powers.

10. ......... we find that the Hon‟ble Cal HC in Sinhotia Metals and Minerals P Ltd (2022) (Cal HC) has, by order dt.7-1-22, categorically upheld the conclusion of the Tribunal that PCIT has not exercised his jurisdiction u/s263 himself but only on proposal of AO. This is a question of fact which was appreciated by the Hon‟ble HC to hold that there was irregular exercise of jurisdiction u/s263. The Tribunal in the case of Stewarts & Lloyds of India Ltd (2016) (Kol-Trib) had thoroughly gone on the facts of the case and in that case, independently the AO had made a proposal. In the case in hand before us even the AO made a proposal on the basis of audit report objections. Further, as we examine the notice u/s263 available at page 84 of the PB, it appears that the contents of the notice in a tabular form are similar to the proposal dt.27-9-18 of the AO. The audit report is provided by Revenue at page no.1 to 9 of PB and same only seems to be the foundation of all the reasons quoted by the PCIT, for giving a finding that assessment order is erroneous. Thus, though not mentioned specifically in the order of the PCIT, that the jurisdiction is being invoked on the basis of the audit objections and the proposal thereof, the manner in which the PCIT has approached the issues by issuing SCN and the discussion made upon the issue establish non-application of independent mind. It appears that based upon the audit objections and proposal only the jurisdiction u/s263 38 M/s. Maheshwari Coal Benefication & Infrastructure Pvt. Ltd.

AY 2017-18 & 2019-20 was invoked and exercised to hold assessment order to be erroneous so far as prejudicial to Revenue.

11. Thus, the grounds raised are sustained. The impugned order u/s263 is set aside and the appeal of the assessee is allowed."

ii) KLG Orchards & Resorts P Ltd v. ITO (2023) (Kol-Trib) ITA No.296/ Kol/2021, order dated 04/01/2023, the Tribunal held as under:

"6. ......... we find that certainly the jurisdiction u/s263 was invoked by PCIT after a proposal was received from AO. According to the ld PCIT, the Order passed u/s 143(3) is wrong as the AO has failed to examine certain issues and to that extent it is prejudicial to the interest of the revenue. We have perused the facts on record and also Reeta Lakhmani (2022) 145 taxmann.com 590 (Cal HC) wherein the Hon‟ble HC has held that the exercise of revisionary jurisdiction cannot be at the proposal given by the AO but at the behest of the ld PCIT. The relevant part is reproduced as under:

"8. This aspect was considered by the ld Tribunal and after going through the facts of the case it was found that the initiation of the proceedings u/s263 was based on a proposal given by the AO and not at the behest of the PCIT. It may be true that the PCIT may have information from the assessment file or through other sources. Nevertheless while exercising powers u/s263 the PCIT has to bear in mind the twin conditions are to be conjointly fulfilled. Therefore, before exercise of power u/s263 it is the PCIT who has to apply its mind to the issue and thereafter record reasons as to how the twin conditions are satisfied and then issue a SCN to the assessee. In the cases on hand there is nothing on record to show that such an exercise was done by the PCIT. Therefore, ld Tribunal after noting several decisions on the subject rendered by the Co-ordinate Benches of the Tribunal had allowed the assessee‟s appeal and set aside the order passed by the PCIT u/s263. ***

9. In more or less identical circumstances in Sinforte (P) Ltd (ITAT No. 104 of 2019, dt.7-1-22) the Court had dismissed the appeal filed by the revenue on the ground that the PCIT in order to exercise jurisdiction u/s263 exercised jurisdiction at the instance of the AO which is against the the law. This decision supports the case of the assessee. Hence, for the above reasons, we are of the view that the order passed by the ld Tribunal on the first ground, namely with regard to the correctness of the exercise of power u/s263 has to be affirmed and, accordingly, the appeal filed by the revenue is dismissed and the substantial questions of law suggested by the revenue are not required to be decided in the instant case."

Considering the facts of the case in the light of the decision passed by the jurisdictional HC, we are inclined to quash the order passed by the ld PCIT u/s263."

iii) PCIT v. Reeta Lakhmani (2022) 145 taxmann.com 590 (Cal HC) the Court held as under:-

M/s. Maheshwari Coal Benefication & Infrastructure Pvt. Ltd.

AY 2017-18 & 2019-20 "8. ......... it was found that the initiation of the proceedings u/s263 was based on a proposal given by the AO and not at the behest of the PCIT. It may be true that the PCIT may have information from the assessment file or through other sources. Nevertheless while exercising powers u/s263 the PCIT has to bear in mind the twin conditions are to be conjointly fulfilled. Therefore, before exercise of power u/s263 it is the PCIT who has to apply its mind to the issue and thereafter record reasons as to how the twin conditions are satisfied and then issue a SCN to the assessee. In the cases on hand there is nothing on record to show that such an exercise was done by the PCIT. Therefore, ld Tribunal after noting several decisions on the subject rendered by the Co-ordinate Benches of the Tribunal had allowed the assessee‟s appeal and set aside the order passed by the PCIT u/s263. ***

9. In more or less identical circumstances in Sinforte (P) Ltd (ITAT No. 104 of 2019, dt.7-1-22) the Court had dismissed the appeal filed by the revenue on the ground that the PCIT in order to exercise jurisdiction u/s263 exercised jurisdiction at the instance of the AO which is against the the law. This decision supports the case of the assessee. Hence, for the above reasons, we are of the view that the order passed by the ld Tribunal on the first ground, namely with regard to the correctness of the exercise of power u/s263 has to be affirmed and, accordingly, the appeal filed by the revenue is dismissed and the substantial questions of law suggested by the revenue are not required to be decided in the instant case."

iv) PCIT v. Sinhotia Metals & Minerals (P) Ltd (2023) 455 ITR 736 (Cal HC) the Court held as under:

"4. .......... we find that the Tribunal has noted the decision of the Co- ordinate Bench of the Tribunal in Rupayan Udyog in ITA No.1073/ Kol/2012, dt.28-11-18. After noting the said decision the Tribunal points out that the appellant- Department has not controverted the contents of the letter of the Jt. CIT dt.18-8-16 and has recorded that the said letter clearly brings out that the PCIT has called for proposal from the Jt.CIT/ AO to exercise jurisdiction u/s263. Therefore, the Tribunal concluded that the Pr.CIT has not exercised jurisdiction u/s263 himself, but he exercised the jurisdiction at the instance of the AO/ Jt.CIT, which is against the law.

5. The argument made by the ld standing counsel is that it is the PCIT who has exercised jurisdiction u/s263. From the order passed by the Tribunal we find that the Department could not controvert the contents of the letter dt.18-8-16. If, according to the Department, the contents of the letter were otherwise, then it is for the Department to approach the Tribunal for necessary rectification or clarification and the correctness of the order of the Tribunal cannot be decided by us in an appeal u/s260A by bringing certain submissions which were never made before the Trib. Therefore, we are not inclined to interfere with the order passed by the Tribunal and accordingly, the appeal is dismissed. However, we leave it open to the appellant- Department to approach the Tribunal for clarification or rectification of the order, if they are so advised."

M/s. Maheshwari Coal Benefication & Infrastructure Pvt. Ltd.

AY 2017-18 & 2019-20

29. Consequently, keeping in view the overall facts and circumstances of the case and in accordance with law as cited supra, we hold that the impugned revisionary order passed under section 263 of the Act by the learned PCIT is invalid, hence, bad-in-law which is hereby quashed on this issue. Accordingly, additional ground no.2, raised by the assessee is hereby allowed.

30. In ground no.2, raised by the assessee reads as under:-

"Gr.No.2 On the fact & circumstances of the case & in law, the AO has made assessment u/s143(3) rws.153A dt.29-9-21 after getting prior approval from Addl.CIT u/s153D dt.29-9-21; the PCIT has revised the impugned order dt.29- 9-21 made u/s143(3) rws.153A, without revising the approval of the Addl.CIT u/s153D dt.29-9-21; impugned order made u/s263 dt.20-3-24 is invalid & is liable to be quashed."

31. The learned Counsel for the assessee argued that the Assessing Officer i.e., ACIT, Central Circle-1(1), Nagpur, has made a search assessment order dated 29/09/2021, under section 153A r/w section 143(3) after obtaining prior approval dated 29/09/2021 under section 153D from Addl.CIT, Range Central, Nagpur. The learned PCIT (Central), Bhopal, has revised the impugned order under section 153A r/w section 143(3) made by the ACIT, Nagpur (the Assessing Officer herein), which is without revising the approval order under section 153D of the Addl.CIT. Therefore, it is prayed that the impugned revisionary order framed under section 263 by the learned PCIT, Bhopal, is unsustainable in the eyes of law and ought to have been treated to 41 M/s. Maheshwari Coal Benefication & Infrastructure Pvt. Ltd.

AY 2017-18 & 2019-20 be invalid liable to be quashed. For such arguments, the learned Counsel for the assessee placed reliance on the following case laws:-

 Devender Kumar Gupta v. PCIT (2024) 166 taxmann.com 95 (Del-Trib);

 Gyan Infrabuild (P) Ltd v. PCIT (2024) 162 taxmann.com 664 (Patna-Trib);

 Smt Abha Bansal v. PCIT (2021) 132 taxmann.com 231 (Del-Trib);

 Sufalam Infra Project Ltd v. PCIT (2024) (Nagpur-Trib) ITA No.97/Nag/2019, order dated 29/07/2024;

 PCIT v. Prakhar Developers (P) Ltd (2024) 162 taxmann.com 48 (MP HC);

 Hindusthan Engineering & Industries Ltd v. ACIT (2022) (Kol-Trib), ITSSA no.19 to 25/Kol./2019, order dated 20/12/2022;

 Dhariwal Industries Ltd v. CIT (2016) (Pune-Trib), ITA No.1108 to 1113/Pune/ 2014; order dated 23/12/2016; and  Trinity Infra Ventures Ltd v. DCIT (2015) (Hyd-Trib) dt.4-12-15, ITA No.584 to 589/Hyd/2015, order dated 04/12/2015.

32. However, on this point, submission made by the learned Departmental Representative that the Co-ordinate Bench of the Tribunal, Nagpur Bench, in Sufalam Infra Project Ltd. (2024) ITA No.97/ Nag./2019, order dated 29/07/2024 (Nag. Trib), has already dealt with the issue holding that without revising the approval under section 153D, the assessment order passed under section 153A cannot be revised under section 263 by the PCIT, and that the decision is based on the judgment of the Hon‟ble Madhya Pradesh High Court in Prakhar Developers (P) Ltd. (2024) 162 taxmann.com 48 (MP HC) and the learned Departmental Representative has fairly submitted that there is no judgment of Hon‟ble jurisdictional High Court on this issue. Further, the learned Departmental Representative relied on the decision of the Hon‟ble 42 M/s. Maheshwari Coal Benefication & Infrastructure Pvt. Ltd.

AY 2017-18 & 2019-20 P&H High Court in Osho Forging Ltd. (2018) 93 taxmann.com 369 (P&H); the decision of the Hon‟le Delhi High Court in NIIT Ltd. (2009) (Del HC) judgment dated 11/12/2009 and the Co-ordinate Bench of the Tribunal, Delhi Bench, in Kapil Mehta (Del-Trib), ITA no.533/Del./2021, order dated 11/10/2021, for the contention that without even revising the approval order under section 153D, revisionary action under section 263 of the Act can be taken by the learned PCIT and there is no restriction for revising the order under section 263 by the learned PCIT.

33. Further, the learned Counsel for the assessee expressed his rebuttal on this point that the Revenue has not filed any appeal against the decision of the Tribunal in Sufalam Infra Project Ltd. (Nag-Trib) (supra) before the Hon‟ble Jurisdictional High Court and thus, it had attained finality on this issue till date which is also supported by the judgment of the Hon‟ble Madhya Pradesh High Court in Prakhar Developers (P) Ltd (supra). The learned Counsel for the assessee further distinguished the facts of the case in Osho Forge Ltd. (P&H) (supra), which is on the issue that after framing the order by learned PCIT under section 263, in consequential assessment to be made under section 143(3) r/w section 263, there would be no further requirement of obtaining approval under section 153D, which is completely on different set of facts and is not on the issue involved in the present case.

34. However, in rebuttal, the learned Counsel for the assessee has argued that in PCIT v/s Sunrise Finlease (P) Ltd., (2018) 89 taxmann.com 001 (Guj. HC), it is held that the requirement of obtaining prior approval of the Jt.CIT 43 M/s. Maheshwari Coal Benefication & Infrastructure Pvt. Ltd.

AY 2017-18 & 2019-20 under section 153D was absolute while making search assessment under section 153A r/w section 143(3) even after the order passed under section 263 of the Act by the learned PCIT and, hence, the learned Counsel for the assessee has distinguished the case of Osho Forge Ltd. (P&H) which is even not on the issue in the present case. Further, he has relied on Prakhar Developers (P) Ltd. (2024) 162 taxmann.com 48 (MP HC) and CIT v/s Dr. Ashok Kumar, (2012), ITA no.192/2000 (All. HC) for the proposition and contention that without revising the approval order under section 153D, order made under section 153A could not be revised under section 263 by learned PCIT.

35. We have carefully considered the rival contentions, perused the orders of the authorities below and the material placed on record. We find that the learned PCIT, Bhopal, has passed revision order under section 263 and has revised the assessment made by the Assessing Officer, Nagpur, under section 153A r/w section 143(3) which has been passed after taking approval under section 153D from the Addl.CIT, Nagpur, and the learned PCIT has not revised the impugned approval order of the Addl.CIT under section 153D as there is no whisper in the impugned order of the learned PCIT under section 263 to this effect and thus, in absence of this finding in the order passed under section 263, the impugned order under section 263 would not be sustainable in the eyes of law and hence treated as bad-in-law. We further find that the Revenue has not challenged the findings of Sufalam Infra Project Ltd (Nagpur-Trib) (supra) before the Hon‟ble Jurisdictional High Court and 44 M/s. Maheshwari Coal Benefication & Infrastructure Pvt. Ltd.

AY 2017-18 & 2019-20 thus, it had attained finality on this issue till date and it is also supported by the judgment of the Hon‟ble Madhya Pradesh High Court in Prakhar Developers (P) Ltd (supra). Thus, it is binding on us. However, we find that the learned Departmental Representative relied upon the judgment in Osho Forge Ltd (2018) (P&H) (supra) which is clearly on distinguishable set of facts as it is a case where, after passing order under section 263, in consequential assessment made under section 143(3)/153A, there would be no further necessity of obtaining approval under section 153D and hence, it is not applicable in the facts of the present case. More so, on those set of facts, the case of Sunrise Finlease (P) Ltd (2018) 89 taxmann.com 1 (Guj HC) (supra), as relied on by the learned Counsel for the assessee, would be squarely applicable, as it is held that even after passing the order under section 263, while passing the consequential assessment order, approval under section 153D would be mandatory and without obtaining approval order under section 153D, the consequential assessment framed under section 153A r/w section 143(3) r/w section 263 would be invalid, non-est and unsustainable in the eyes of law. It means, even after the order passed by learned PCIT under section 263 for reopening the concluded case, while framing consequential assessment, there would be requirement of approval order under section 153D, that means, search assessment under section 153A cannot be passed without obtaining approval under section 153D from Jt.CIT, which support the proposition that the learned PCIT cannot pass revision order under section 263 on the search assessment made under section 153A without revising the approval order under section 153D, since the approval order under section 45 M/s. Maheshwari Coal Benefication & Infrastructure Pvt. Ltd.

AY 2017-18 & 2019-20 153D is an in-built in the assessment made under section 153A. We further find that the learned Departmental Representative has relied upon the decision of the Co-ordinate Bench of the Tribunal in Kapil Mehta (supra), which is based on Osho Forge Ltd (supra) which has already been distinguished in Sunrise Finlease (P) Ltd (2018) 89 taxmann.com 1 (Guj HC) (supra) wherein, it is held that even after passing the order under section 263, in a consequential assessment made under section 153A r/w section 143(3) r/w section 263, there would be absolute requirement of obtaining approval under section 153D which cannot be dispensed with. It means, before making a consequential assessment order under section 153A r/w section 143(3) r/w section 263, further approval under section 153D from Jt.CIT would be mandatory and in absence of this, the consequential assessment order made under section 153A r/w section 143(3) r/w section 263 would be invalid and without jurisdiction. Thus, the case in Kapil Mehta (supra) will not proceed to rescue the case of the Revenue. We further find that the learned Departmental Representative has relied upon the judgment of the Hon‟ble Supreme Court in T.N. Civil Supplies Corporation Ltd v/s CIT [2003] 129 Taxman 69 (SC) which held that the order passed by the ITO would include any order passed by the ITO on the directions of a superior authority either under section 144A or under section 144B, while, in our opinion, it does not cover the cases wherein search assessment has been made under section 153A after obtaining approval under section 153D from Jt.CIT and in such cases, after granting approval under section 153D by the Jt.CIT, the Assessing Officer becomes functus-officio and the Assessing Officer 46 M/s. Maheshwari Coal Benefication & Infrastructure Pvt. Ltd.

AY 2017-18 & 2019-20 cannot alter modify the draft assessment order after obtaining the approval from the Jt.CIT. Thus, it, in fact, becomes an order of the Jt.CIT and if the learned PCIT has satisfied that the impugned assessment order is erroneous inasmuch as it is prejudicial to the interests of Revenue, in such a situation, it is obligatory on the part of the learned PCIT to revise the approval order granted under section 153D by the Jt.CIT and without revising the approval order under section 153D, revision order passed under section 263 would not stand as mandated by law. It is so, because the assessment order made under section 153A is only after obtaining approval under section 153D by the Jt.CIT. For the arguments put-forth by the learned Counsel for the assessee, he placed reliance on following case laws:-

i) Devender Kumar Gupta v. PCIT (2024) 166 taxmann.com 95 (Del-Trib) the Tribunal held as under:-

"6. This is countered by the ld DR by relying Shrigopal Rameshkumar Sales (P) Ltd v. ACIT (2022) 140 taxmann.com 628 (Nagpur-Trib) dt.1-4-

22.

7. We have given thoughtful consideration to this aspect of the controversy and we find that a specific Gr.No.2 is raised by the assessee as follows:-

"2. That the asstt. Order passed u/s153A rws.143(3) after getting an approval of Addl.CIT u/s153D could not be revised u/s263, hence, ld PCIT exceeded his jurisdiction in invoking sec263 in respect of impugned asstt. Order framed u/s153A rws.153D."

8. The assessment orders make it categorical that the same are passed with statutory approval of Addl.CIT, Central-Range, Gurgaon communicated vide his office letter F.No. Addl.CIT (CR)/GGM/ 2021-22/ 664 dt.24-9-21 in accordance with sec153D.

9. We find that in the impugned order the ld PCIT has not taken account of the fact that the assessments were completed after prior approval of the competent authority. Thus, we are of the considered view that at the time of examining the issue as to if the assessment order is erroneous so far as prejudicial to the interest of the Revenue, the ld revisional 47 M/s. Maheshwari Coal Benefication & Infrastructure Pvt. Ltd.

AY 2017-18 & 2019-20 authority is not only supposed to see the assessment record of AO, but also the record of the approval which as far as the revisional authority is concerned becomes "record" of the quasi judicial authority whose order is being examined by invoking the revisional jurisdiction. Therefore, without giving a finding that the prior approval u/s153D was vitiated and was also erroneous so far as prejudicial to the interest of the Revenue, the assessment order independently cannot be held to be erroneous so far as prejudicial to the interest of the Revenue."

9.1. The catena of judicial pronouncements relied by the ld AR have also laid down the same proposition of law and we will like to refer specifically to Prakhar Developers (P) Ltd (2024) (MP HC) where the Hon‟ble MP HC has taken into consideration the fact that Ramamoorthy Vasudevan (Pune-Trib) wherein it was held that the order passed by the PCIT is unsustainable due to lack of jurisdiction in invoking sec 263 for the reason that the same was passed upon taking prior approval u/s153A, by the Department before the Hon‟ble HC or the Hon‟ble SC and, thus, the Hon‟ble MP HC in its judgment dt.1-4-24 has held as follows:-

"8. Even otherwise, as per sec263, the PCCIT or PCIT or CIT may call for and examine the record of any proceeding under this Act and if he considers that any order passed therein by the AO, is erroneous in so far as it is prejudicial to the interests of the Revenue, he may make enquiry as he deems necessary, pass such order thereon as the circumstances of the case justify. For passing any order u/s143(3) & 153A, prior approval of Jt.CIT is required u/s153A, or PCIT or CIT as the case may be. Therefore, once prior approval had already been taken by the AO and accepted the return submitted by the assessee, then the same authority cannot exercise the power u/s 263 to reverse the order of AO."

10. The judgment which the ld DR has relied is not applicable as in that judgment, this aspect was not actually examined at all and only for the reason that there also the impugned assessment order was passed u/s153A, does not lay down a view contrary to the one we are relying above.

11. In the light of the aforesaid discussion, we are inclined to allow Gr.No.2 and 3 for AY15-16 and 16-17; and gr.No.3 in AY17-18 and 18-

19. Consequently, the appeals are allowed and the impugned orders in respective years are quashed."

ii) Smt Abha Bansal v. PCIT (2021) 132 taxmann.com 231 (Del-Trib) dt.31- 5-21; ITA No.383/ Del/2021, the Tribunal held as under:

"9. ...search was conducted in the case of assessee on 21-7-16. The AO proceeded to pass the assessment order u/s153B(1)(b) r.w. section 143(3). It is also not in dispute that the AO at the assessment stage as well as after completion of the assessment discussed the matter in issue with the Jt.CIT u/s153D and after getting approval of 48 M/s. Maheshwari Coal Benefication & Infrastructure Pvt. Ltd.

AY 2017-18 & 2019-20 the Jt.CIT u/s153D passed the impugned assessment order dt.18-12-

18. We may note that the order u/s143(3) rws.153B cannot be revised without revising the approval of the Jt.CIT. It is also an admitted fact that the ld PCIT did not revise the approval of Jt.CIT given u/s153D. Dr Ashok Kumar (All HC) considered the identical issue and has reproduced the findings of the Tribunal in the judgment as under:

"5.2. In the last it is also relevant fact that the AO was fully alive about the facts of the case and that is why he got necessary approval of Addl.CIT before completing the assessment orders for all the AYs and once that is not disputed by the Revenue than the CIT would not be justified in interfering in the approval accorded by the Addl.CIT for framing the assessment order and thus, there was no case for setting aside the assessment orders for the AYs in question. On the basis of facts and circumstances of the case I am of the opinion that the impugned order is liable to be quashed accordingly."

9.1 The findings of the Hon‟ble Allahabad HC in para 9 of its order are reproduced as under:

"9. We find that the Tribunal has not committed any error of law in setting aside the order of CIT passed u/s263 for the AY91-92 to 95-96."

9.3. Since in the present case, AO passed the impugned assessment order after getting approval from the Jt.CIT u/s153D, therefore, following the above decisions, we are of the view that the ld PCIT has no power to revise the order u/s263, without revising the approval of the Jt.CIT u/s153D.

Explanation-1(a)(i) and (ii) of sec263(1) is reproduced as under:

"(a) an order passed on or before or after the 1-6-88 by the AO shall include-

(i) an order of assessment made by the Asstt.CIT or Dy.CIT or the ITO on the basis of the directions issued by the Jt.CIT u/s144A;

(ii) an order made by the Jt.CIT in exercise of the powers or in the performance of the functions of an AO conferred on, or assigned to, him under the orders or directions issued by the Board or by the Pr.CCIT or CCIT or Pr.DG or DG or Pr.CIT or CIT authorised by the board in this behalf u/s120;"

9.4. It is evident from the plain reading of the aforesaid Explanation that an order passed on or before or after 1-6-88 by the AO shall include (i) an order of assessment made by the Asstt.CIT or Dy.CIT or the ITO on the basis of the directions issued by the Jt.CIT u/s144A; (ii) an order made by the Jt.CIT in exercise of the powers or in the performance of the functions of an AO conferred on, or assigned to, him under the orders or directions issued by the Board or by the Pr.CCIT or CCIT or Pr.DG or DG or PCIT or CIT authorised by the board in this behalf u/s120. It may be noted that order of 49 M/s. Maheshwari Coal Benefication & Infrastructure Pvt. Ltd.

AY 2017-18 & 2019-20 assessment passed with the approval of Jt.CIT u/s153D could not be revised u/s263. The ld DR has, however, relied upon the order of Tribunal, Panaji Bench, but, has not explained whether Dr Ashok Kumar (All HC) or different Benches of the Tribunal have been considered in this case by the Panaji Bench. It is not decided in this case that assessment order cannot be revised without revising the approval u/s153D and Explanation-1 to sec263 has also not been considered. Therefore, this decision relied upon by the ld DR would not apply to this case. Further Param Transport (P) Ltd (CG HC) is not with regard to approval obtained u/s153D because in this case it was held that revisional power u/s263 is applicable to assessments under search and seizure. However, it is not explained by the ld DR whether in this case the approval u/s153D has been revised by the ld PCIT. It may also be noted that it is well settled law that if 2 views are possible, then the view which is in favour of the assessee should be made applicable. We rely upon Vegetable Products Ltd (1973) (SC). It may also be noted here that the Hon‟ble All HC is one of the jurisdictional HCs of Delhi Bench, therefore, preference shall have to be given to the judgment of the Hon‟ble All HC as reproduced above. In the totality of the facts and circumstances of the case and following the decisions referred to above, we are of the view that the ld PCIT was not having jurisdiction to proceed u/s263 in the matter in issue and as such the order passed by the ld PCIT is nullity and void ab initio. We therefore, decide this issue in favour of the assessee."

iii) Gyan Infrabuild (P) Ltd v. PCIT (2024) 162 taxmann.com 664 (Patna-

Trib) dt.13-5-24, ITA No.175 to 178/Pat/2023; AY15-16 to 18-19, the Tribunal held as under:-

"19. Before us, the ld counsel for the assessee, has referred to plethora of decisions whether the revisionary order u/s263 has been quashed, where only the order u/s153A is revised without revising order u/s153D.

20. Reliance is placed on the following judicial pronouncements:

Smt Abha Bansal (2021) (Del-Trib)-

"9.4. It is evident from the plain reading of the aforesaid Explanation that an order passed on or before or after 1-6-88 by the AO shall include (i) an order of assessment made by the Asstt.CIT or Dy.CIT or the ITO on the basis of the directions issued by the Jt.CIT u/s144A; (ii) an order made by the Jt.CIT in exercise of the powers or in the performance of the functions of an AO conferred on, or assigned to, him under the orders or directions issued by the Board or by the Pr.CCIT or CCIT or Pr.DG or DG or PCIT or CIT authorised by the board in this behalf u/s120. It may be noted that order of assessment passed with the approval of Jt.CIT u/s153D could not be revised u/s263.

The ld DR has, however, relied upon the order of Trib, Panaji Bench, but, has not explained whether Dr Ashok Kumar (2012) (All HC) or different Benches of the Tribunal have been considered in this case 50 M/s. Maheshwari Coal Benefication & Infrastructure Pvt. Ltd.

AY 2017-18 & 2019-20 by the Panaji Bench. It is not decided in this case that assessment order cannot be revised without revising the approval u/s153D and Expl.1 to sec263 has also not been considered. Therefore, this decision relied upon by the ld DR would not apply to this case. Further Param Transport (P) Ltd (CG HC) is not with regard to approval obtained u/s153D because in this case it was held that revisional power u/s263 is applicable to assessments under search and seizure. However, it is not explained by the ld DR whether in this case the approval u/s153D has been revised by the ld PCIT. It may also be noted that it is well settled law that if 2 views are possible, then the view which is in favour of the assessee should be made applicable. We rely upon Vegetable Products Ltd (1973) (SC). It may also be noted here that the Hon‟ble All HC is one of the jurisdictional HCs of Delhi Bench, therefore, preference shall have to be given to the judgment of the Hon‟ble All HC as reproduced above. In the totality of the facts and circumstances of the case and following the decisions referred to above, we are of the view that the ld PCIT was not having jurisdiction to proceed u/s263 in the matter in issue and as such the order passed by the ld PCIT is nullity and void ab initio. We therefore, decide this issue in favour of the assessee."

Surendra L Heera Nandani (Mum-Trib) dt.14-2-18:

"28. Since in the instant case also, the AO has passed the order after obtaining necessary approval from Addl.CIT u/s153D, therefore, respectfully following the above mentioned decisions of the Co-ordinate Benches of the Trib, we are of the considered opinion that the CIT has no power to revise the order u/s263 in the instant case since the same has been passed with the approval of the Addl.CIT u/s153D. We respectfully following Dr.Ashok Kumar (All HC) ITA No.192 of 2000. We find that in the instant case the original approval was granted by Addl.CIT and this assessment order cannot be revised without approval of Addl.CIT.‟"

Dhariwal Industries Ltd (Pune-Trib) dt.23-12-16:

„9. Referring to Trinity Infra Ventures Ltd ITA No.584 to 589/Hyd/ 2015, dt.4-12-15 for AY05-06 to 10-11 he submitted that the Tribunal in the said decision, following various decisions including Dr.Ashok Kumar (2012) (All HC) ITA No.192 of 2000, dt.6-8-12, has held that assessment order approved by the Addl.CIT u/s153D cannot be subjected to revise u/s263.

14.1. We find Ch Krishna Murthy (Hyd-Trib) dt.13-2-15, Mehtab Alam (Luck-Trib) ITA No.288 to 294/Lkw/ 2014, dt.18-11-14 held that CIT is not justified in assuming jurisdiction u/s263 when the order has been passed in terms of sec153D.

14.2. We find Trinity Infra Ventures Ltd (Hyd-Trib) dt.4-12-15 had an occasion to decide an identical issue and it held that the 51 M/s. Maheshwari Coal Benefication & Infrastructure Pvt. Ltd.

AY 2017-18 & 2019-20 assessment order approved by the Addl.CIT u/s153D cannot be subject to revision u/s263."

Trinity Infra Ventures Ltd (Hyd-Trib) dt. 4-12-15 "5.4. The ld counsel for the assessee has further submitted that the assessment u/s143(3) r/w sec153C was passed after getting approval of Addl.CIT u/s153D and therefore, such an assessment cannot be revised without revising the directions of the Addl.CIT u/s153D. The ld counsel for the assessee, has relied upon Ch Krishna Murthy (Hyd-Trib) dt.13-2-15 and also Mehtab Alam (Luck- Trib) dt.18-11-14 in support of this contention. He has also placed reliance upon Dr Ashok Kumar (2012) (All HC) wherein it has been held that the assessment order approved by the Addl.CIT u/s153D, cannot be subjected to revision u/s263. In view of the above decision also, we hold that the revision order u/s263 is not sustainable."

21. From going through the above decisions, wherein it has been consistently held that without revising the approval u/s153D, the ld PCIT cannot revise the assessment order u/s153A. Even in case of Surendra L Heera Nandani (Mum-Trib) it was held that ld PCIT has no power to revise the order u/s263 since the same has been passed with the approval of the Addl.CIT u/s153D.

22. Therefore, in the light of the above decisions, so far as the first limb of legal argument of the ld Sr. counsel for the assessee is concerned, we find merit that ld PCIT erred in assuming jurisdiction u/s263 by revising order u/s153A rws.143(3) without considering that prior approval already accorded to ld AO u/s153D and secondly when orders u/s153A has been passed after receiving approval u/s153D, ld PCIT erred in revising order u/s153A without first revising the order u/s153D as which means that no defect has been observed by ld PCIT in approval u/s153D. Thus, the action of the ld PCIT assuming jurisdiction u/s263 cannot be held to be tenable, the impugned proceedings deserves to be quashed on this grounds itself.

iv) Sufalam Infra Project Ltd v. PCIT (2024) (Nagpur-Trib) dt.29-7-24, ITA No.97/Nag/ 2019, the Tribunal held as under:

"6. We find that the issue raised by Shri Hirani is appropriately covered by the judgment of the Hon‟ble MP HC. The ld CIT(DR) has failed to controvert the legal issue and fairly submitted that there is no order of the jurisdictional HC for this issue. We find, the various coordinate benches of the Tribunal have held that once the order u/s143(3) r/w 153A has been passed after taking prior approval of Additional CIT u/s153D, then the jurisdiction u/s263 cannot be invoked. In the instant case, it is clearly evident from the assessment order that the order was passed with prior approval u/s153D, dt.20-12-16, issued by JCIT, Central Range-1, Nagpur. Respectfully following the judgment of the Hon‟ble HC, we held that CIT Central, Nagpur, fell into an error in revising the order 52 M/s. Maheshwari Coal Benefication & Infrastructure Pvt. Ltd.

AY 2017-18 & 2019-20 passed by the AO. The assessee succeeds on the sole solitary issue of the usurpation. We accordingly held that the revision order u/s 263 is not sustainable."

v) Dhariwal Industries Ltd v. CIT (2016) (Pune-Trib) dt.23-12-16; ITA No.1108 to 1113/Pune/ 2014, the Tribunal held as under:

"9. Referring to Trinity Infra Ventures Ltd (Hyd-Trib) dt.4-12-15 for AY05-06 to 10-11 he submitted that the Tribunal in the said decision, following various decisions including Dr.Ashok Kumar (2012) (All HC) dt.6-8-12, has held that assessment order approved by the Addl.CIT u/s153D cannot be subjected to revise u/s263.

14.1. We find Ch Krishna Murthy (Hyd-Trib) dt.13-2-15, Mehtab Alam (Luck-Trib) dt.18-11-14 held that CIT is not justified in assuming jurisdiction u/s263 when the order has been passed in terms of sec153D.

14.2. We find Trinity Infra Ventures Ltd (Hyd-Trib) dt.4-12-15 had an occasion to decide an identical issue and it held that the assessment order approved by the Addl. CIT u/s153D cannot be subject to revision u/s 263."

vi) Trinity Infra Ventures Ltd v. DCIT (2015) (Hyd-Trib) dt.4-12-15; ITA No.584 to 589/Hyd/ 2015, the Tribunal held as under:

"5.4. The ld counsel for the assessee has further submitted that the assessment u/s143(3) r/w sec153C was passed after getting approval of Addl.CIT u/s153D and therefore, such an assessment cannot be revised without revising the directions of the Addl.CIT u/s153D. The ld counsel for the assessee, has relied upon Ch Krishna Murthy (Hyd-Trib) dt.13-2- 15 and also Mehtab Alam (Luck-Trib) dt.18-11-14 in support of this contention. He has also placed reliance upon Dr Ashok Kumar (2012) (All HC) wherein it has been held that the assessment order approved by the Addl.CIT u/s153D, cannot be subjected to revision u/s263. In view of the above decision also, we hold that the revision order u/s263 is not sustainable."

36. Consequently, keeping in view the overall facts and circumstances of the case and in accordance with law as cited supra, we hold that the impugned revisionary order passed under section 263 of the Act by the learned PCIT is invalid hence bad-in-law which is hereby quashed on this issue. Accordingly, ground no.2, is allowed.

M/s. Maheshwari Coal Benefication & Infrastructure Pvt. Ltd.

AY 2017-18 & 2019-20

37. Ground no.4, being general in nature, hence, no separate adjudication is required.

38. In the result, appeal in ITA no.247/Nag./2024, by the assessee for A.Y. 2017-18 stands allowed.

ITA no.248/Nag./2024 Assessee's Appeal - A.Y. 2019-20

39. The following grounds and additional grounds have been raised by the assessee in this appeal:-

"1. On the fact & circumstances of the case & in law, assessment made u/s143(3) rws.153A dt.29-9-21 for AY19-20 is neither erroneous nor prejudicial to the interest of revenue; after submitting explanation dt. 16-2-24 before the PCIT against the SCN u/s263 dt.9-2-24; the PCIT has not given any finding on merits on the issue of 'bad debts' of Rs.1,53,80,308 that it is how incorrectly claimed by the assessee; in absence of this factual finding on merits by PCIT & simply passed order for making fresh assessment de novo to the file of the AO, is not permissible in the eyes of law; order made u/s263 by ld PCIT would be invalid and is liable to be quashed.

2. On the fact & circumstances of the of the case & in law, the AO has made assessment u/s143(3) rws. 153.A dt.29-9-21 after getting prior approval from Addl.CIT u/s153D dt.29-9-21; the PCIT has revised the impugned order dt.29- 9-21 made u/s143(3) rws. 153A, without revising the approval of the Addl.CIT u/s153D dt.29-9-21; impugned order made u/s263 dt.20-3-24 is invalid & is liable to be quashed.

3. On the fact & circumstances of the case & in law, assessment order made u/s143(3) rws.153A dt.29-9-21 for AY19-20 is invalid; an invalid order cannot be revised u/s263 by PCIT; impugned order made u/s263 dt.20-3-24 would be invalid & is liable to be quashed.

4. The appellant craves leave, to add, urge, alter, modify or withdraw any grounds before or at the time of hearing.

Addl.Gr.No.1:

"On the facts and circumstances of the case and in law, revision order made u/s263 dt.20-3-24 for AY19-20 by ld PCIT(Central) would be is invalid as base order i.e., assessment made u/s153A rws.143(3) dt.29-9-21 for AY19-20 has been held as invalid vide order dt.26-12-24; an invalid order cannot be 54 M/s. Maheshwari Coal Benefication & Infrastructure Pvt. Ltd.

AY 2017-18 & 2019-20 revised u/s263 as it ceased to have existence; order made u/s263 for AY19- 20 dt.20-3-24 would be invalid and is liable to be quashed."

Addl.Gr.No.2:

"On the facts and circumstances of the case and in law, revision order u/s263 dt.20-3-24 by PCIT, Bhopal is invalid; it is without examination of record by PCIT. Bhopal which is sine qua/ pre-requisite for invoking sec263(1) as it is merely based on Proposal sent by Range Head & AO at Nagpur dt.8-5-23 & 2- 5-23 to the PCIT, Bhopal for making/dictating to initiate revision u/s263 by recording satisfaction by AO himself that order passed u/s153A rws. 143(3) dt.29-9-21 by the then AO is erroneous & prejudicial as the AO exceeded his jurisdiction; contents of the Proposal sent by the AO dt.2-5-23 & SCN u/s263 dt.9-2-24 are same; order u/s263 dt. 20-3-24 based on the dictate of AO & without examination of the 'record' by PCIT, Bhopal, would be invalid and is liable to be quashed."

40. We have carefully considered the rival contentions, perused the orders of the authorities below and the material placed on record.

41. Insofar as ground no.1, as quoted above is concerned, before us, the learned Counsel for the assessee argued that the assessment made under section 153A r/w section 143(3) is neither erroneous nor prejudicial to the interests of Revenue. The assessee after furnishing its explanation dated 16/02/2024, a copy of which is placed on record at Page-21 to 23 of the Paper Book-1 before the learned PCIT against the show cause notice dated 09/02/2024, the learned PCIT has not given any finding on merits on the issue of „bad debts‟ of ` 1,53,80,308, stating that as to how the assessee has claimed it incorrectly and in the absence of such factual finding by the learned PCIT on the merits of the case, the learned PCIT has simply passed revisionary order under section 263, for framing assessment de novo which was restored to the file of the Assessing Officer, is not permissible in the eyes of law.

M/s. Maheshwari Coal Benefication & Infrastructure Pvt. Ltd.

AY 2017-18 & 2019-20

42. It is further submission of the learned Counsel for the assessee that the assessee, in response to show cause notice dated 09/02/2024, issued by the learned PCIT alleging that the Assessing Officer has not inquired and verified the claim of Bad Debts of ` 1,53,80,308. It is the argument of the learned Counsel for the assessee before the learned PCIT that in the computation of income, the assessee has deducted ` 1,53,80,308 as bad debts but, in fact, on a perusal of the audited Profit & Loss Account and Schedule thereof which are placed on record at Page-6 to 18 of the Paper Book-1, under the head „Other Income‟ the assessee has shown ` 64,07,867 on account of Bad debts recovered and in fact, the net resultant figure of ` 89,72,441 (i.e., ` 1,53,80,308 (-) ` 64,07,867) has actually claimed as bad debts written off.

43. It is submission of the learned Counsel for the assessee that in the Balance Sheet, „Provision of bad debts‟ of ` 1,53,80,308 has been reflecting as opening balance as on 01/04/2018 and during the year, out of opening balance of ` 1,53,80,308 as on 01/04/2018, ` 64,07,867 has been received from the party M/s.Emco Energy Ltd. on 07/06/2018, which has been shown as other income in the Profit & Loss Account at ` 64,07,867 and thereafter, in fact, ` 89,72,441 was claimed only as bad debts directly in the computation of income. In other words, ` 64,07,867 was included in the indirect income (other income) shown in the Profit & Loss Account and thus, ` 64,07,867 was included as Profit as per Profit & Loss Account at ` 9,88,24,642 which was duly shown in the computation of income for the year under consideration, a 56 M/s. Maheshwari Coal Benefication & Infrastructure Pvt. Ltd.

AY 2017-18 & 2019-20 copy of which is placed on record at Page-2 of the Paper Book-1. Thereafter, the assessee deducted whole of the amount of ` 1,53,80,308 from the profit shown in the computation. The net effect thereof comes to ` 89,72,441 only.

44. Thus, it is submitted that as alleged by the learned PCIT about the claim of Bad debts that this has not been taken into books of account, is factually incorrect, as the assessee has duly taken effect of bad debts in the books of account in the ledger account of party M/s.Emco Energy Ltd. a copy of ledger account is exhibited at Page-20 of the Paper Book-1, and amount recovered (i.e., received) from the party during the year under consideration has also been shown as income by the assessee and only the resultant amount of ` 89,72,441 has been claimed as bad debts written-off. The said vital facts have been ignored by the learned PCIT and avoided giving any findings on the merits of the case while passing the impugned revisionary order under section 263 in mechanical manner without any independent application of mind on the issue. Further, the assessment order passed by the Assessing Officer is not an erroneous order, as the claim of the assessee is allowable under section 36(1)(vii) of the Act as has been held by the Co- ordinate Bench of the Tribunal, Mumbai Bench, in Goldiam Jewellery Ltd v. ACIT [2024] 169 taxmann.com 509 (Mum-Trib), held as under:-

"8. Apart from the above, we have also gone through Vidras India Ceramics (P) Ltd [2021] 129 taxmann.com 320 (Ahd-Trib) wherein it was held as under:

Income Tax: Where assessee-Co has debited provision made in respect of doubtful debts to P&L account and also reduced same amount in balance sheet from sundry debtors/ trade receivable, such simultaneous reduction from sundry debtors amounted to actual write off of debt and hence, same was to be allowed as deduction u/s36(1)(vii).

M/s. Maheshwari Coal Benefication & Infrastructure Pvt. Ltd.

AY 2017-18 & 2019-20 II. Sec36(1)(vii) Bad debts (Write off) - AY 14-15 Assessee-Co engaged in manufacturing and trading of ceramics tiles, claimed provision made for doubtful debts AO disallowed same under explanation to sec36(1)(vii)- Whether, since assessee-Co has debited provision made in respect of doubtful debts to P&L account and also reduced same amount in balance sheet from sundry debtors/ trade receivable, such simultaneous reduction from sundry debtors amounted to actual write off of debt and hence same was to be allowed as deduction u/s 36(1)(vii) Held, yes [Para 15.6] [In favour of assessee]

9. Apart similar question was also decided by the jurisdictional HC of Mum in Tainwala Chemicals & Plastics India Ltd [2013] 34 taxmann.com 159 (Bom HC) wherein it was held as under:

IT: Where assessee-Co made provision for doubtful debt given to its group concern and had debited same to P&L account and correspondingly reduced assets by reducing amount of unsecured loans, doubtful debt qualified for deduction u/s36(1)(vii).

Sec36(1) (vii) Bad debts (Provision for doubtful debt] - AY04-05- Assessee-Co made provision for doubtful debt given to its group concern and claimed same to be allowed as deduction u/s 36(1)(vii)- It had debited provision of doubtful debt to P&L account and correspondingly reduced assets by reducing amount of unsecured loans It had lent surplus money and offered interest income to tax as business income Whether doubtful debt in question qualified for deduction u/s 36(1)(vii) rws.36(2) Held, yes [Para 3] [In favour of assessee]

10. From the above, we noticed that Coordinate Bench of ITAT, Hon'ble jurisdictional HC of Mumbai have granted relief by following Vijaya Bank (SC), wherein it was held that "once the provision of doubtful debt has been debited to the P&L account and corresponding provision has been credited or reduced from the debtors account in the balance sheet, then, this would amount to written off". In the present case it is an undisputed fact that the assessee has debited the provision of doubtful debt from the P&L account, balance sheet and written off income, which amount to written off of the debt. Therefore, respectfully following the decisions mentioned above and also considering the facts of the case, we hold that the assessee is eligible for deduction on account of provision for doubtful debt in the given facts and circumstances. Therefore, while concurring with the stand of ld AR, we direct the ld AO to delete the impugned additions."

45. We also rely on the judgment of the Hon‟ble Karnataka High Court in CIT v/s Millennia Developers Pvt. Ltd. [2019] 100 taxmann.com 369 (Kar.), wherein on similar facts and circumstances, the Hon‟ble Court has held as under:-

M/s. Maheshwari Coal Benefication & Infrastructure Pvt. Ltd.

AY 2017-18 & 2019-20 "8. The same is disputed by the ld sr counsel Sri A Shankar appearing for the counsel for the assessee. It is contended that the finding of the AO that the entire scheme is a device to avoid tax cannot be accepted. That the finding of the AO is, therefore, not justified. He placed reliance on sec36(1)(vii), to contend that as long as the bad debts are shown in the books of account, no other que would arise for consideration. The bad debts having been reflected in the books of account, the same requires to be allowed. That there is no law prohibiting writing off the bad debts even in the very same year it became due. His further submission is that the CBDT have issued Circular No.12 of 2016, dt.30-5-16 with regard to "admissibility of claim of deduction of bad debt u/s36(1)(vii) r/ws.36(2). While referring to TRF Ltd (2010) (SC), wherein it was held that the bad debt could be written off as irrecoverable, as long as it finds a place in the books of account of the assessee. In those circumstances, the circular enunciated that the claim for any debt or part thereof in any PY, shall be admissible u/s36(1)(vii), if it is written off as irrecoverable in the books of accounts of the assessee for that PY and it fulfils the conditions stipulated in sec36(2). Consequently, it was directed that no appeals shall be filed on the said gr. and all the pending appeals are required to be withdrawn. Hence, he pleads, on this gr also, that the appeal be dismissed"

46. The learned Departmental Representative has simply relied on the impugned order passed by the learned PCIT and prayed that the order of the learned PCIT may not be disturbed.

47. We find that since the claim of bad debts written-off by the assessee is explained by its accounts and reflected in the computation sheet, we further find from the record that from the provisions of ` 1,53,80,308 on account of bad debts, ` 64,07,867 has been received from the party during the year and the balance of ` 89,72,441 has been reduced from the party account. Thus, the Assessing Officer has accepted the claim of bad debts under section 36(1)(vii) after verifying from the computation sheet and balance sheet including books of account and taken a possible view which is tenable as per law. In response to the show cause notice issued under section 263, the assessee furnished detailed submission and reply before the learned PCIT for allowing the bad debts claimed under section 36(1)(vii) that it is only net effect of ` 89,72,441 and since, it is reduced from the party account and 59 M/s. Maheshwari Coal Benefication & Infrastructure Pvt. Ltd.

AY 2017-18 & 2019-20 hence, it is an allowable expenditure under section 36(1)(vii). We further observe that the learned PCIT has simply set aside the assessment order for making fresh assessment de novo without pointing out any defect in the assessment order and without giving any factual finding on merits of the case that it is an erroneous order which is sine qua non/ pre-condition for invoking revisionary action under section 263 of the Act, which is absent in the present case and hence, the impugned revisionary order passed under section 263 is without application of mind by the learned PCIT hence it is treated as invalid and is hereby quashed. Thus, ground no.1, raised by the assessee is allowed.

48. Ground no.2, relates to the issue of without revising the approval order under section 153D of the Act, search assessment made under section 153A r/w section 143(3) which cannot be revised under section 263 of the Act.

49. During the course of hearing before us, both the learned Counsel appearing for the parties agreed that related facts and circumstances of the issue raised by the assessee is mutatis mutandis to the issue decided by us vide ground no.2, in its appeal bearing ITA no.247/Nag./2024, for the assessment year 2017-18, vide Para-35 and 36 of this order, wherein we have quashed the impugned order passed by the learned PCIT. Consequent upon the decision taken by us on this issue as aforesaid, while maintaining the consistency with the view taken therein, we quash the impugned order passed under section 263 of the Act by the learned PCIT, on this issue by allowing ground no.2, raised by the assessee.

M/s. Maheshwari Coal Benefication & Infrastructure Pvt. Ltd.

AY 2017-18 & 2019-20

50. Ground no.3, and additional ground no.1, relate to the issue that an invalid order cannot be revised u/s 263 of the Act by the learned PCIT.

51. During the course of hearing before us, both the learned Counsel appearing for the parties agreed that related facts and circumstances of the issue raised by the assessee is mutatis mutandis to the issue decided by us vide ground no.3 and additional ground no.1, raised by the assessee in its appeal being ITA no.247/Nag./2024, for the assessment year 2017-18, vide Para-9 and 10, of this order, wherein we have quashed the impugned order passed by the learned PCIT. Consequent upon the decision taken by us on this issue as aforesaid, while maintaining the consistency with the view taken therein, we quash the impugned order passed under section 263 of the Act by the learned PCIT, on this issue by allowing ground no.3 and additional ground no.1, raised by the assessee.

52. Additional ground no.2, relates to the issue of impugned order passed under section 263 of the Act by the learned PCIT is only based on proposal made by the Assessing Officer without examining the record by the learned PCIT and without application of mind of his own, is bad-in-law.

53. During the course of hearing before us, both the learned Counsel appearing for the parties agreed that related facts and circumstances of the issue raised by the assessee is mutatis mutandis to the issue decided by us vide additional ground no.2, raised by the assessee in its appeal being ITA no.247/ Nag./2024, for the assessment year 2017-18, vide Para-28 and 29, 61 M/s. Maheshwari Coal Benefication & Infrastructure Pvt. Ltd.

AY 2017-18 & 2019-20 of this order, wherein we have quashed the impugned order passed by the learned PCIT. Consequent upon the decision taken by us on this issue as aforesaid, while maintaining the consistency with the view taken therein, we quash the impugned order passed under section 263 of the Act by the learned PCIT, on this issue by allowing additional ground no.2, raised by the assessee.

54. Ground no.4, being general in nature hence no separate adjudication is required.

55. In the result, appeal in ITA no.248/Nag./2024, by the assessee for A.Y. 2019-20 stands allowed.


      Order pronounced in the open Court on 14/05/2025



                 Sd/-                                        Sd/-
              V. DURGA RAO                             K.M. ROY
            JUDICIAL MEMBER                       ACCOUNTANT MEMBER

MUMBAI,     DATED: 14/05/2025

Copy of the order forwarded to:

(1)   The Assessee;
(2)   The Revenue;
(3)   The PCIT / CIT (Judicial);
(4)   The DR, ITAT, Mumbai; and
(5)   Guard file.
                                                    True Copy
                                                     By Order
Pradeep J. Chowdhury
Sr. Private Secretary

                                                       Assistant Registrar
                                                   ITAT, Mumbai

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Income Tax Appellate Tribunal - Nagpur

M/S Maheshwari Coal Benefication And ... vs Acit Central Circle-1(1), Nagpur on 14 May, 2025