Income Tax Appellate Tribunal - Nagpur
The Nirmal Ujjwal Credit Co-Operative ... vs The Principal Commissioner Of Income ... on 16 March, 2026
IN THE INCOME TAX APPELLATE TRIBUNAL
"NAGPUR" BENCH, NAGPUR
BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER &
SHRI KHETTRA MOHAN ROY, ACCOUNTANT MEMBER
ITA No. 142/NAG/2025 (A.Y. 2015-16)
ITA No. 209/NAG/2025 (A.Y. 2016-17)
ITA No. 143/NAG/2025 (A.Y. 2017-18)
(Physical hearing)
The Nirmal Ujjwal Credit Co-op Principal Commissioner of Income
Society, 193, Main Road, Vs Tax-1/3, Nagpur, Aayakar Bhawan,
Nandanvan, Nagpur 440009. Civil Lines, Nagpur -440001
PAN : AAAAT 6554 H
Appellant / Assessee Respondent / Revenue
ITA No. 269/NAG/2025 (A.Y. 2015-16)
The Nirmal Ujjwal Credit Co-op Assistant/ Deputy Commissioner of
Society, 193, Main Road, Vs Income Tax- Circle-4(1),
Nandanvan, Nagpur 440009. BSNL RTTC Building, Seminary
Hills, Nagpur, Maharashtra,
PAN : AAAAT 6554 H PIN: 440006.
Appellant / Assessee Respondent / Revenue
Assessee by Shri Manoj G Moryani, Advocate
Revenue by Shri Pankaj Kumar, CIT-DR
Date of hearing 19.02.2026
Date of pronouncement 16.03.2026
Order under section 254(1) of Income Tax Act
PER PAWAN SINGH, JUDICIAL MEMBER:
1. This group of four appeals by assessee are directed against the separate orders of learned Principal Commissioner-1, Nagpur (PCIT) or learned Commissioner (Appeals) in short "ld CIT(A)" for assessment year 2015- 16, 2016-17 and 2017- 18. In ITA No. 142/Nag/2025, the assessee has challenged the validity of order of learned PCIT passed under section 263 dated 06.03.2020 for AY 2015-16. In ITA No. 143/Nag/2025 the assessee has ITA No(s) 142, 143, 209 & 269/Nag/2025 The Nirmal Ujjwal Credit Co-op Society, challenged the validity of order of learned PCIT passed under section 263 dated 28.03.2024 for AY 2017-18. In ITA No. 209 /Nag/2025, the assessee has challenged the validity of order of learned PCIT passed under section 263 dated 29.03.2024 for AY 2016-17. And in ITA No. 269/Nag/2025, the assessee has challenged the order of ld CIT(A) /National Faceless Appeal Centre, New Delhi (NFAC) dated 26.09.2024 in confirming the addition made in assessment order passed under section 143 rws 263 dated 28th September 2021, passed in pursuance of direction of PCIT dated 06.03. 2020 for AY 2015-16. Certain facts and all appeals are common and interconnected. Therefore, with the consent of parties all the appeals were clubbed, heard together and are decided by consolidated order to avoid the conflict in decisions.
2. In ITA No.142/Nag/2025 the assessee has raised following grounds of appeal;
(1) The order passed under section 263 by Principal Commissioner of income Tax,Nagpur-1 (PCIT) is illegal, invalid and bad in law. (2) The PCIT ought to have considered order passed under section 143(3) by assessing officer in which all the issues were discussed and considered at the time of assessment proceeding and the assessing officer considering the aspect and made addition, therefore, order passed by PCIT is unjustified unwarranted and excessive.
(3) The PCIT ought to have considered order passed in section 143(3) by assessing officer is not erroneous and in so far as prejudicial to the interest of revenue. Therefore, order passed under section 263 is unjustified unwarranted and excessive.
(4) The assessee has preferred the appeal against the order passed under section 143(3) and said appeal were also allowed and order under section 250 were also passed, therefore, order passed under section 263 is unjustified unwarranted and excessive.
2
ITA No(s) 142, 143, 209 & 269/Nag/2025 The Nirmal Ujjwal Credit Co-op Society, (5) The PCIT has not considered the entire written submission of the assessee and passed order under section 263 without going into merit of the case, therefore, the order passed is unjustified unwarranted and excessive. (6) The PCIT has not accepted the contention of assessee and disallowed the business loss and unabsorbed depreciation on the basis of order under section 154 dated 22 December 2025, which is not received by the assessee, therefore, passing order under section 263 is unjustified, unwarranted and excessive.
3. Brief facts of the case are that assessee co-operative society providing banking and credit facility to its member. The assessee is also engaged in business of real estate in the name of Nirmal Nagri Housing Project and also into the business of providing healthcare. The assessee filed its return of income for assessment year (AY )2015-16 on 27th October 2015 declaring Nil income. The assessee claimed exemption of entire income under section 80P. The case was selected for scrutiny. The assessing officer (AO), in para-2 of assessment order recorded that he issued various notice to the assessee on 5th August 2016 and again on 7th June 2017 and finally on 5 September 2017. Notices were duly served, the assessee furnished required details which were placed on record. The details furnished by assessee were verified as has been recorded in para 4 of the assessment order. The AO while passing the assessment order made addition under section 43CA of ₹17,28,560/- on account of difference in the value of sale consideration shown by the assessee and the value determined by Stamp Valuation Authority on registering sale of certain units. The assessment was completed on 28thDecember 2017 under section 143(3). Thereafter, AO also passed order 3 ITA No(s) 142, 143, 209 & 269/Nag/2025 The Nirmal Ujjwal Credit Co-op Society, under section 154 in disallowing business loss and carry forward losses from AY 2010-11.
4. The assessment was revised by ld PCIT by invoking his jurisdiction under section 263. Before revising the assessment order the learned PCIT noted that assessee has debited prior period expenses of ₹ 1.12 crore and donation of ₹ 5,63,051/-. The ld PCIT further recorded that similar expenses under these heads were disallowed by assessing officer in assessment order for AY 2014-15. However, during the year under consideration the assessing officer allowed the same. The AO allowed prior period expenses on the basis of decision of Jaipur Tribunal in case of Rajasthan State Cooperative Oil Versus Income Tax Department. The ratio of such decision is not applicable on the facts of the case of assessee, as the assessee does not fall under the category of Government Organisation. The learned PCIT was of the view that assessing officer has not verified admissibility of these expenses while passing the assessment order. The learned PCIT further recorded that assessee has claimed set off of business lossof ₹ 32,87,595/-and carry forward losses of ₹ 23,87,997/- of AY 2010-11 which has been allowed by assessing officer. However, the assessing officer disallowed such business loss and carry forward losses in the rectification order passed under section 154. On the basis of aforesaid view, the learned PCIT issued show cause notice under section 263 on 30th January 2020. The show cause notice was replied by assessee vide the reply dated 14thFebruary 2020. In the reply the assessee submitted that assessee is a Credit Co-operative Society carrying on credit facilities business. In the assessment prior period expenses and 4 ITA No(s) 142, 143, 209 & 269/Nag/2025 The Nirmal Ujjwal Credit Co-op Society, donation were allowed while passing the assessment order. The AO allowed such relief after examination of both the issues. However, similar expenses were disallowed in the assessment year 2014-15 and on appeal before CIT(A) the both the additions were deleted. On the issue of brought forward losses, the assessee stated even if, the brought forward losses are not set off, the income of assessee company would enjoy 100% deduction under section 80P and still income of assessee company would be at nil. The reply of the assessee was not accepted by learned PCIT. He held that the AO has not applied his mind on the facts of the case. The AO has not understood the various deductions and exemptions claimed by the assessee. It was the duty of the AO to discuss the allowability of the deduction mentioned in the computation and to accept or reject the same. The AO has been careless in drafting the order and not making additions, which he ought to have made. The ld PCIT held that assessment order passed by AO is erroneous and in so far as prejudicial to the interest of revenue within the meaning of Explanation 2 to section 263 of Income Tax Act. The assessment was set aside and AO was directed to make necessary enquiry and pass fresh assessment order after allowing opportunity of being heard to the assessee. Aggrieved by the order of learned PCIT, the assessee has filed present appeal before this Tribunal.
5. We have heard the submission of the learned authorised representative(AR) of the assessee and the learned Commissioner of Income Tax-departmental representative(CIT-DR) for the revenue. We have also gone through the orders of lower authorities carefully. The learned AR of the assessee fairly 5 ITA No(s) 142, 143, 209 & 269/Nag/2025 The Nirmal Ujjwal Credit Co-op Society, submits that there is delay of 1733 days in filing appeal before Tribunal. The assessee has already filed affidavit of Chief Executive Officer (CEO) of assessee society namely Nanda Dinesh Bante for explaining the delay.The ld AR of the assessee submits that delay in filing appeal is neither intentional nor deliberate. When impugned order was passed by ld PCIT on 06.03.2020, it was Covid -19 pandemic period. Nationwide lock down was declared by Central Government from 15th March 2020. Due to panic in the society, day to day normal working was adversely effected. Keeping in view such abnormal circumstances Hon'ble Apex Court in Suo Moto Writ Petition No. 03 of 2020 extended time period for taking recourse of law and / or filing appeals or for statutory compliances from time to time and finally it was extended up to 28th February 2022 and 90 days' grace was also allowed. Thus, substantial part of delay is covered by the decision of Hon'ble Supreme Court. The assessee filed appeal on 27.02.2025. The ld AR of the assessee further submits that exact date of service of impugned order is not available with the assessee at present. Although, such order was served during Covid Period. The copy of impugned order was received by staff namely Dilip S/o Ashruji Gayakwad, who had left the services of assessee-society, without informing its Director. When assessee realised about the order in February 2025, the Director of assessee immediately approached new counsel and filed appeal immediately. The delay in filing appeal is bonafide. The assessee is not going to get any benefit in filing appeal belatedly, rather there is always risk of non-condoning the delay. The ld AR of the assessee submits that he has a good case on merit and is likely to succeed if the delay in filing 6 ITA No(s) 142, 143, 209 & 269/Nag/2025 The Nirmal Ujjwal Credit Co-op Society, appeal is condoned and appeal is adjudicated on merit. To support his submissions, the ld AR of the assessee relied on the following case laws; Rafique and Another Vs Munshilal & Others 1981 AIR SCR (3) 509, N Balkrishnan Vs M. Krishnanamurty (1998) 7 SCC 123, Collector of Land Acquisition Vs Mst Katiji (1987) 167 ITR 0471 (SC), Mahaveer Prasad Jain Vs CIT (1998) 172 ITR 0331 (MP-HC), Avtar Krishan Dass Vs CIT 133 ITR 339 (Delhi) Mool Chand Vs UOI, in Civil Appeal No. 8435-8436 of 2024 (SC).
6. On merits of the case, the ld AR of the assessee submits that the assessment order dated 28.12.2017 was neither erroneous nor prejudicial to the interest of justice. The AO passed assessment after making necessary enquiry and issuing proper show cause notice. Copy of show cause notice dated 07.06.2017 & 05.09.2017 issued by AO is filed at page No. 140 &141 of the paper book along with detailed questionnaire. In response to such show cause notice, the assessee furnished detailed reply, copies of which are placed at page No. 144 to 153 of the paper book. The AO after considering the reply of assessee passed assessment order. In respect of prior period expenses, the assessee furnished complete explanation and relied on the decision of Jaipur Tribunal in Rajasthan State Co-operative Oil Vs DIT in ITA No. 615/JP/2013. The assessee also explained that genuineness of donation was also explained. Thus, the AO after considering the explanation in writing, passed assessment order by making other additions under section 43CA only. The order passed by AO is not erroneous and is legally sustainable. In the computation sheet the AO also considered the carry forward business loss and unabsorbed depreciation. The assessee in its reply dated 14.02.2020, 7 ITA No(s) 142, 143, 209 & 269/Nag/2025 The Nirmal Ujjwal Credit Co-op Society, filed response to notice under Section 263 of the Act explained the entire fact and submitted that the order passed by the AO is neither erroneous nor prejudicial to the interest of revenue and twin condition of Section 263 of the Act are not fulfilled. No specific finding was given by ld PCIT in his order.
7. The ld AR of the assessee submits that the ld PCIT passed his order by taking view that prior period expenses and donation were disallowed in AY 2014-15 and both expenses are allowed by the AO in the year under consideration. The ld AR of the assessee submits that against the similar addition in AY 2014-15, the assessee filed appeal before CIT(A), wherein both the additions i.e. addition of prior period expense and addition of donation was deleted by ld CIT(A) vide order dated 26.09.2019. On further appeal by revenue before Tribunal, the order of ld CIT(A) was upheld vide order dated 27.11.2024 in ITA No. 391/Nag/2024. Thus, even on merit, the issue identified by ld PCIT in now covered in favor of assessee. To support his various submission, though the ld AR of the assessee has filed long list of decisions, but mainly relied on the following decisions; CIT Vs Gabrial India Limited (1993) 2023 ITR 108 (Bom HC), CIT Vs Arvind Jewelers (2003 259 ITR 502 (Guj HC), CIT Vs Max Inia (2004) 268 ITR 128 ( P& H) CIT Vs Nirav Modi (2017) 407 ITR 681 (Bom HC).
8. On the other hand, the ld. CIT-DR for the revenue supported the order of ld. Pr.CIT. The ld. CIT-DR for the revenue submits that the AO has not passed speaking order on the issues identified by ld PCIT. The AO has not conducted further investigation about the nature of prior period expenses and on the 8 ITA No(s) 142, 143, 209 & 269/Nag/2025 The Nirmal Ujjwal Credit Co-op Society, issue of donation. On the plea of condonation of delay, the ld CIT-DR for the revenue submits that there is inordinate delay in filing appeal before Tribunal. The assessee has not given any plausible reason or explanation. The explanation of delay is self-serving story. The appeal of the assessee is liable to be dismissed on merit as well as on the issue of delay.
9. We have considered the rival submissions of the parties and have gone through the orders of the lower authorities. We have also deliberated on various case laws relied by the ld. AR of the assessee. We have also gone through the various documents filed by assessee. Firstly, we are considering the plea of the learned AR of the assessee for condonation of delay in filing appeal before Tribunal. Before us, the learned AR of the assessee vehemently argued that the delay in filing appeal is neither intentional not deliberate. It was explained that soon after passing the impugned order by learned PCIT, there was a nationwide severe Covid-19 pandemic and that time period up to end of May 2022 is already condoned by Hon'ble Apex Court. It is also the plea of assessee that due to severe covid pandemic, the assessee could not take proper step for filing appeal before Tribunal. It was also explained that impugned order was kept by the staff of assessee, who ultimately left the services without intimating the office bearer of assessee-society and on realization of impugned order, the present appeal was filed immediately. On overall consideration of facts, we find that delay in filing appeal is neither intentional and/or deliberate. Moreover, the assessee is not going to be benefited by filing appeal belatedly. Therefore, considering the principle of law on limitation that when cause of substantial justice and technical 9 ITA No(s) 142, 143, 209 & 269/Nag/2025 The Nirmal Ujjwal Credit Co-op Society, consideration are pitted against each other, the cause of substantial justice may be preferred. The Superior Courts in a series of decision have held that rule of limitation isnot meant to destroy the right of the parties, rather the approach must be to adjudicate the matter on merit. We are conscious of the facts limitation fixes a lifespan for seeking legal remedy for redress of legal injury so suffered. The length of delay is not a matter to consider, rather the explanation is the only criteria, if it is reasonably explained and there is no malafide on the part of the litigant. On considering overall facts of the case, we find that there is no malafide on the part of assessee. Thus, considering overall facts of the case, delay in filing present appeal is condone. Now admitting to merit of the case.
10. On perusal of assessment record, we find that case was selected for limited scrutiny by issuing notice under section 143(2) on 28.07.2016. One of the issue for selection for scrutiny was "other expenses claimed in the profit and loss account". The AO during assessment issued specific show cause notice dated 07.06.2017 and again on 05.09.2017 for seeking the various details of large expenses claimed in the P& L account. We find that the assessee vide its reply filed on 18.12.2017 furnished justification of prior period expenses, the copy of detail notes is available at page No. 150 of PB. We find that in the said reply the assessee specifically stated that certain invoices were having date of previous year,which were debited to the current year on the basis of payment in the current yearfinancial year because, the payment is approved in the board meeting, then it is eligible for payment. It was also explained that assesse is a cooperative society and public funds are deployed 10 ITA No(s) 142, 143, 209 & 269/Nag/2025 The Nirmal Ujjwal Credit Co-op Society, in the society. Every payment of funds is subject to sanctioning by Board of Directors of the management committee of the society. Without sanctioning of bills by the managing committee, payments cannot be released by the society. Considering the concept of public money involved in the inherent nature of practice of passing the payment to safeguard the assets of the society and preventing of fund. Therefore, the society has made payment in current financial for the bills pertaining to earlier year. The assessee also attached the copy of bills along with the payment voucher. We find that on considering such explanation the AO accepted the explanation filed by assessee. We find that there is no such reference about the explanation offered by the assessee, yet the issue of prior period expenses was duly considered. We also find that in the computation sheet the AO also considered the carry forward business and unabsorbed depreciation. Thus, in our view the AO passed assessment order on due application of mind. Hence, the assessment order passed by AO is not erroneous on all the issue. The AO took conscious decision which is legally sustainable view.
11. We further find that in AY 2014- 15 similar additionsi.e.disallowances on account of prior period expenses and donation was disallowed by AO. However, on further appeal before CIT(A), such additions were deleted. And on further appeal by revenue before the Tribunal the order of ldCIT(A) was confirmed. The copy of order passed by CIT(A) and the Tribunal in ITA No. 391/Nag/2024, is already been placed on record. Thus,even on merit, the view taken by AO is legally sustainable view. Therefore, considering overall facts of the case and material placed before us, we find that the assessment 11 ITA No(s) 142, 143, 209 & 269/Nag/2025 The Nirmal Ujjwal Credit Co-op Society, order passed by AO is not erroneous. Thus, the twin condition for exercising jurisdiction under section 263 is not fulfilled in the present case. Hence, the order passed by learned PCIT is set aside/quashed. In the result, the grounds of appeal raised by the assessee are allowed.
12. In the result, the appeal of assessee in ITA No. 142/Nag/2025 is allowed. ITA No. 269/Nag/2025 AY-2015-16 [143(3) rws 263]
13. We find that in the present appeal, the assessee has challenged various additions made in the assessment order dated 28thSeptember 2021, passed in pursuance of direction of ld. PCIT dated 6thMarch 2020. Considering the fact that we have already set aside /quashed the order of ld PCIT dated 6thMarch 2022, while considering various grounds of appeal in ITA No. 142/Nag/2025, therefore, addition made in the assessment order dated 28thSeptember 2021, passed under section 143(3) read with section 263, will not survive. In the result, various grounds of appeal raised by assessee is allowed.
14. In the result, the appeal of the assessee in ITA No. 269/Nag/2025 is allowed. ITA No. 209/Nag/2025 AY 2016-17 (against order under section 263)
15. In this appeal, the assessee has challenged the validity of order ofld Principal Commissioner of Income Tax-1, Nagpur, (PCIT) dated 29.03.2024 passed under section 263 for AY 2016-17. The assessee has raised following grounds of appeal;
(1) The order passed under section 263 by the PCIT is illegal and bad in law. (2) The PCIT ought to have considered order passed under section 143(3) by assessing officer in which all the issues were discussed and considered at the time of assessment proceeding and the assessing officer has 12 ITA No(s) 142, 143, 209 & 269/Nag/2025 The Nirmal Ujjwal Credit Co-op Society, considered all the aspect and made addition and again revising the same by PCIT is unjustified unwarranted and excessive.
(3) The PCIT ought to have considered order passed under section 143(3) by assessing officer is not erroneous and not prejudicial to the interest of everyone. Therefore, order passed under section 263 is unjustified unwarranted and excessive.
(4) The assessee had preferred appeal against the order passed under section 143 (3) and again revising the same under section 263 proceeding, therefore, order passed under section 263 is unjustified unwarranted and excessive.
(5) The PCIT has not considered the entire written submission of the assessee and passed the order under section 263 without going into merits of the case; therefore, the order passed is unjustified unwarranted and excessive. (6) The PCIT has erred in considering that issue of cash deposit was already discussed in the assessment order passed under section 143(3) and against the subsequent assessment framed under section 147 dated 25thMarch 2022 and on again the same issue, asking the same under section 263 therefore passed is illegal invalid and bad in law. (7) The PCIT has not accepted the contention of assessee and disallowed the business loss and unabsorbed depreciation, therefore, passing order under section 263 is unjustified unwarranted and excessive. (8) The appellant seek permission to add any other ground of appeal or amend or alter the aforesaid ground of appeal.
16. The ld AR of the assessee fairly submits that there is a delay in filing of appeal before the Tribunal. Though, the registry of this Tribunal has not issued any defect memo. The impugned order under section 263 was passed on 29th March 2024, however, the present appeal is filed only on 28th March 2025, thus there is delay of about 10 months. The delay in filing of appeal is not intentional or deliberate. The delay is due to the fact that the person who was taking care and managing various correspondence has left the services of assessee-society and it was not informed to the office bearer of the society. When the office bearer of the society realised about the order passed by learned PCIT, they immediately the approached the counsel and filed the 13 ITA No(s) 142, 143, 209 & 269/Nag/2025 The Nirmal Ujjwal Credit Co-op Society, present appeal. The learned AR submitted that a lenient view may be taken in condoning the delay. The assessee had good case on merit and is likely to succeed if his case is heard on merit.
17. On merit of the case, the learned AR of the assessee submits that assessment for AY 2016-17 was completed under section 143(3) on 25th December 2018. In the assessment order the AO has made certain additions. Against the additions made in the assessment order dated 25th December 2018, the assessee filed appeal before CIT(A). The learned CIT(A) confirmed the addition. Thereafter, the case of assessee was reopened under section 147 on 25th March 2022. The case of assessee was reopened on the basis of information about certain cash deposit in the accounts of various members of the society. The re-assessment was completed on 25th March 2022, without making any addition. The case of assessee was again reopened under section 147 by issuing notice under section 148 dated 24th November 2023. Second reassessment under section 143(3) rws 144B was completed on 16th February 2024. In the second reassessment order, the returned income of assessee was again accepted. The learned PCIT revised the second assessment order dated 16.02.2024 by exercising his jurisdiction under section 263 on 29th March 2024. He issued show cause notice under section 263 dated 24.03.2024,by taking view that AO has not examined on the issue of business loss and unabsorbed depreciation. The, copy of which is placed on record at page No. 68 to 70 of paper book. The learned AR of the assessee submits that show cause notice under section 263 is barred by limitation. The time limit for revising the assessment order has to be 14 ITA No(s) 142, 143, 209 & 269/Nag/2025 The Nirmal Ujjwal Credit Co-op Society, considered from the assessment completed on 25th December 2018. There was no such issue of business loss and unabsorbed depreciation in first reopening assessment order as well as in second reassessment order. In the computation of income of original assessment order, the AO considered such issue of business loss and depreciation. There are series of decision wherein it has been consistently held that time for revision would start from original assessment order and not from reassessment order, if there was no such issue / the subject matter of reopening. To support his view, the learned AR of the assessee relied on a series of decision and mainly relied on the decision of Hon'ble Apex Court in CIT Vs IDBI Ltd (2023) 454 ITR 811 (SC) and decision of Surat bench in Begani Dying Mills Pvt Limited Vs PCIT in ITA No. 404/Srt/2019 dated 22.03.2021. The learned AR of the assessee submits that he has already placed on record the original assessment order dated 25.12.2018, and two subsequent reassessment orders referred above. It was submitted that all the submissions were paraded before PCIT during revision proceedings. Despite recording such fact he has not considered. The learned AR submitted that revision order passed by learned PCIT on 29th March 2024 is barred by limitation and is liable to be quashed/ set aside.
18. On the other hand, the learned CIT-DR for the revenue supported the order of learned PCIT. On the plea of condonation of delay, the learned CIT -DR for the revenue submits that he adopts the same submissions as made in appeal for AY 2015-16.
19. We have considered the rival submission of both the parties and have gone through the orders of lower authorities carefully. Firstly, we are considering 15 ITA No(s) 142, 143, 209 & 269/Nag/2025 The Nirmal Ujjwal Credit Co-op Society, the plea of condition of delay in filing of appeal. Considering the fact that we have already condone the delay in appeal for AY 2015-16, in our detailed order therefore, considering the plea of learned AR of the assessee, we find that the delay in filing of appeal is also not intentional or deliberate. Hence delay in filing the present appeal is also allowed. Now adverting to merit of the case.
20. We find that original assessment was completed on 25th December 2018. In first and second reopening, the case was reopened on the basis of specific information about cash deposit by certain members of the society. Admittedly there was no issue of business loss or unabsorbed depreciation in the first and second reopening assessment. The AO while issuing computation sheet with the assessment order has considered such issues. Thus, for the purpose of exercising the power of revision under section 263, the time period is to be counted from the original assessment i.e. from 25.12.2018, as has been held by Hon'ble Apex Court in CIT versus IDBI Ltd (supra). We find that Hon'ble Apex Court in CIT versus IDBI Ltd (supra) has clearly held that when CIT having exercised power under section 263 with respect to issue which was not covered by the reassessment proceedings, the limitation would start from the original assessment order and not from the reassessment order. Similar view was taken by Surat bench in Begani Dying Mills Pvt Limited Vs PCIT (supra). One of us, is author of decision of Surat bench (supra).
21. Thus, we find revision order dated 29.0.3.2024 passed by learned PCIT is clearly beyond limitation period. Hence, revision order passed under section 263 dated 29thMarch 2024 set aside /quashed. Even on merit, we find that 16 ITA No(s) 142, 143, 209 & 269/Nag/2025 The Nirmal Ujjwal Credit Co-op Society, while issuing computation sheet at the time of passing original assessment order, the AO has taken consideration of all facts relating to brought forward business loss and depreciation of earlier years. Hence, the assessment cannot be treated as erroneous.
22. In the result, the grounds of appeal raised by the assessee are allowed.
23. In the result appeal of the assessee in ITA No. 209/Nag/2025 is also allowed. ITA No. 143/Nag/2025 AY 2016-17 ( against under section 263)
24. We find that assessee has raised similar ground of appeal, further there is similar delay in filing of appeal before Tribunal. The learned AR of the assessee submits that original assessment under section 143(3) was completed on 31st December 2019 and that time period for revising assessment expired on 31st March 2022. The learned PCIT issued show cause notice under section 263 only on 7th March 2024. The revision order under section 263 was passed on 28thMarch 2024. We find that assessment reopened under section 147 and assessment was completed on 30thMarch 2022. In the revision order, the learned PCIT identified issue of unabsorbed appreciation and business loss. Admittedly, in the reassessment order no such issue was subject matter nor it was considered or examined by assessing officer. The reassessment was completed on 30th March2022, on the basis of different informationi.e. "high value cash deposit". In the reassessment, the returned income was again accepted. The learned AR of the assessee submits that in this appeal the similar legal grounds of appeal is raised as raised in appeal for AY 2016-17. Even on merit, the learned AR of the assessee submits that while passing the origin assessment order, the AO 17 ITA No(s) 142, 143, 209 & 269/Nag/2025 The Nirmal Ujjwal Credit Co-op Society, considered such issue and while issuing computation of income and considered such issue of business loss and unabsorbed depreciation. Thus, view taken by AO has taken reasonable, plausible and legally sustainable view. Thus, the assessee has good case on merit as well.
25. On the other hand, the learned CIT-DR for the revenue submits that he had the same argument which he had made in other connected appeals.
26. We have considered the rival submission of parties and perused the order of lower authorities carefully. We find that initially assessment was completed on 31st December 2019. Thus, time period for revising assessment was only up to 31st March 2022. Although, assessment was reopened under section 147 and assessment was completed on 30th March 2022, it was initiated on the basis of different information i.e. "high value cash deposit". We find that in the revision proceedings, the learned PCIT identified issue of unabsorbed appreciation and business loss. Admittedly, in the reassessment order no such issue was subject matter nor it was considered or examined by AO. The issue on which the assessment was sought to revise was in fact subject matter of original assessment order, being part of computation of income. The learned PCIT issued show cause notice under section 263 only on 7th March 2024 and passed order under section 263 on 28th March 2024. Thus, the revision order is barred by limitation prescribed under section 263(2) of the Act.Similar view is taken by us in appeal for AY 2016-16 in ITA No. 209/Nag/2025. In the result, the grounds of appeal raised by the assessee is allowed.
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ITA No(s) 142, 143, 209 & 269/Nag/2025 The Nirmal Ujjwal Credit Co-op Society,
27. In the result, the appeal of the assessee in ITA No. 143/Nag/2025 is also allowed.
Order was pronounced on 16/03/2026 as per Rule 34 of Income Tax (Appellate Tribunal) Rules-1963.
SS- Sd/- S Sd/--
KHETTRA MOHAN ROY PAWAN SINGH
ACCOUNTANT MEMBER JUDICIAL MEMBER
Mumbai , Dated:16/03/2026
Self by author /Dragon
Copy of the order forwarded to:
(1) The Assessee;
(2) The Revenue;
(3) The PCIT / CIT (Judicial);
(4) The DR, ITAT, Nagpur; and
(5) Guard file.
By Order
Senior Private Secretary/ ITAT, Nagpur
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