NISHICA IMPEX PRIVATE LIMITED,MUMBAI vs. DCIT CC 4(4), MUMBAI

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ITA 6635/MUM/2026Status: DisposedITAT Mumbai09 September 2026AY 2018-195 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the PCIT's revisionary power under Section 263 was exercised without jurisdiction. This was because the issue on which the PCIT invoked his powers had already been decided by the first appellate authority, violating Explanation 1(c) of Section 263(1).

What were the facts?

The assessee's assessment order was revised by the Principal Commissioner of Income Tax (PCIT) under Section 263 of the Income Tax Act. The PCIT believed the assessment order was erroneous and prejudicial to the revenue's interest. The assessee argued that the issue was already decided by the first appellate authority.

What were the issues?

Whether the PCIT can exercise revisionary powers under Section 263 when the issue has already been decided by the first appellate authority. Whether the revisionary order passed by the PCIT is valid if it violates the conditions prescribed under Section 263(1) read with Explanation 1(c).

Which sections of the Income-tax Act were involved?

Section 263,Section 69C,Section 143(3),Section 147,Section 133(6)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCHES, MUMBAI

Before: SHRI SAKTIJIT DEY & SHRI G.M. DOSS

For Respondent: Shri Vikas Suryavanshi, CIT DR
Pronounced: 09.09.2026

INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI BENCH: B BEFORE SHRI SAKTIJIT DEY, VICE PRESIDENT AND SHRI G.M. DOSS, ACCOUNTANT MEMBER

ITA 6635/MUM/2026 िनधा�रण वष�/Assessment Year: 2018-19) NISHICA IMPEX PRIVATE DCIT CC 4(4) LIMITED KAUTILYA BHAVAN 345, PLOT NO.236 MOHATTA BANDRA KURLA COMPLEX MARKET MUSAFIRKHANA BANDRA (EAST) Vs. ROAD NR. MANISH MARKET, MUMBAI-400051, MUMBAI-400001, MAHARASHTRA MAHARASHTRA अपीलाथ� Appellant ��थ� Respondent

Permanent Account Number of Assessee: AAECN9704H

अपीलाथ� �ारा/Appellant represented by: Shri Sohil Gobharani ��थ� �ारा/Respondent represented by: Shri Vikas Suryavanshi, CIT DR

सुनवाई की तारीख / Date of conclusion of hearing: 03-Sep-2026 घोषणा की तारीख / Date of pronouncement: 09.09.2026 आदेश / ORDER PER SHRI SAKTIJIT DEY, VICE PRESIDENT: The present appeal has been filed by the assesse, challenging the validity of the order dated 18.03.2026 passed by learned Principal Commissioner of Income Tax (Central), Mumbai-2 u/s. 263 of the Income Tax Act, 1961 (‘the Act’ for short), pertaining to the assessment year (AY for short) 2018-19.

2.

We have considered rival submissions and perused the materials available on record. It is the say of the assessee that the issue on which the Revisionary Authority has exercised jurisdiction u/s. 263 of the Act was considered and decided by learned first appellate authority while deciding assessee’s appeal arising out of the assessment

order subjected to proceedings u/s. 263 of the Act. Thus, he submitted, the impugned

order passed u/s. 263 of the Act, being wholly without jurisdiction should be set aside.

3.

Whereas, learned Departmental Representative (‘ld. DR’ for short) relied upon

the observations of ld. PCIT.

4.

We have considered rival submissions and perused the materials available on

record. The assessee is a resident corporate entity. The materials on record reveal that

for the impugned assessment year, the assessee had filed its return of income on

25.12.2018, declaring income of Rs.16,39,030/-. The return of income so filed by the

assessee was selected for scrutiny and assessment u/s. 143(3) of the Act was completed

vide order dated 19.04.2021, determining the total income at Rs.18,75,270/-.

5.

Subsequently, as per the information available on the INSIGHT portal of the

department, the Assessing Officer (A.O. for short) found that CGST authorities had

reported that M/s. Advance Computers and Mobiles Pvt. Ltd. is engaged in issuing/

generating/ providing fake/bogus invoices for passing on fraudulent input tax credit

without supplying goods. The AO observed, in the year under consideration, the

assessee had entered into transactions with M/s. Advance Computers and Mobiles Pvt.

Ltd. for an amount of Rs.88,58,844/-. Based on such information, the assessment was

reopened u/s. 147 of the Act. In course of assessment proceedings, the AO called upon

the assessee to prove the genuineness of the transactions with M/s. Advance Computers

and Mobiles Pvt. Ltd. Though, the assessee furnished documentary evidences in support

of the transaction, however, the AO was not convinced. He observed that notice issued u/s. 133(6) of the Act to M/s. Advance Computers and Mobiles Pvt. Ltd. did not evoke

any response. Thus, he ultimately concluded that the alleged purchases made from M/s.

Advance Computers and Mobiles Pvt. Ltd. is bogus and the payments made towards

such purchases is in the nature of unexplained expenditure u/s. 69C of the Act.

Accordingly, he added back the amount of Rs.99,21,904/- to the income of the assessee.

6.

Against the assessment order so passed, the assessee preferred an appeal before

learned first appellate authority. It was the specific case of the assessee before learned

first appellate authority that the AO has wholly misconceived the facts and treated the

sale transaction of the assessee with M/s. Advance Computers and Mobiles Pvt. Ltd. as

purchases. The assessee submitted, it had actually sold goods to M/s. Advance

Computers and Mobiles Pvt. Ltd., as against the allegation of purchases made from the

said party.

7.

The said appeal filed by the assessee was decided by learned first appellate

authority vide order dated 17.12.2025. While deciding the appeal, learned first appellate

authority recorded a categorical finding of fact that as against the allegation made by the

AO that the assessee had purchased goods from M/s. Advance Computers and Mobiles

Pvt. Ltd., in reality, the assessee had sold goods to the said party. However, learned first

appellate authority held that the genuineness of the transactions are not established.

Hence, quite possibly, the assessee must have earned commission by showing bogus

sales to the concerned party. Accordingly, he estimated the commission at 5% on the

sales turnover and added back an amount of Rs.4,96,100/-, while deleting the addition

made by the AO u/s.69C of the Act.

8.

After disposal of the appeal by learned first appellate authority, learned PCIT

called for and examined the assessment records and while doing so, he was of the

opinion that the assessment order is erroneous and prejudicial to the interest of the

revenue, as the AO has erroneously assumed that the assessee had indulged in bogus

purchase of goods from M/s. Advance Computers and Mobiles Pvt. Ltd. Accordingly,

he issued a show cause notice u/s. 263 of the Act to the assessee seeking reply as to why

the assessment order should not be revised. Alleging non-compliance by the assessee,

learned PCIT ultimately passed the impugned order on 18.3.2026, setting aside the

assessment order with a direction to make fresh assessment after making necessary

inquiry and providing adequate opportunity of being heard to the assessee.

9.

As could be seen from the aforesaid facts and the chronological of the events, the

very issue on which the assessee's appeal was decided by learned first appellate

authority, learned PCIT invoked his revisionary powers, that too much after the decision

of learned first appellate authority. Explanation 1(c) of section 263(1) of the Act

mandates that in case an order passed by the AO is subject matter of appeal, the

Revisionary Jurisdiction u/s. 263(1) of the Act shall extend to matters not decided in

such appeal. In the facts of the present appeal, not only the issue on which ld. PCIT

exercised jurisdiction u/s. 263 of the Act was subject matter of appeal, but the issue was

decided by learned first appellate authority much prior to even issuance of notice u/s.263

of the Act. Pertinently, though this fact was brought to the notice of ld. PCIT by the

assessee, however, it was completely ignored by him, probably for the reason that

compliance of the assessee was after the due date, but before the impugned order was

passed. Be that as it may, fact remains that the impugned order passed by learned PCIT is in complete violation of the condition prescribed under Explanation 1(c) under section

263 of the Act. Therefore, we have no hesitation in holding that the exercise of power

u/s.263 of the Act, in the facts of the present case, is invalid and without jurisdiction.

Accordingly, we quash the impugned order passed u/s.263 of the Act.

10.

In the result, the appeal is allowed.

Order pronounced in the open court on 09.09.2026.

Sd/- Sd/-

G.M. DOSS SAKTIJIT DEY ACCOUNTANT MEMBER VICE PRESIDENT

Mumbai Dated: 09.09.2026 Roshani, Sr. PS

Copy to: NISHICA IMPEX PRIVATE LIMITED, 345, PLOT NO.236 MOHATTA MARKET 1 MUSAFIRKHANA ROAD NR. MANISH MARKET, MUMBAI-400001 DCIT CC 4(4), KAUTILYA BHAVAN BANDRA KURLA 2 COMPLEX BANDRA (EAST), MUMBAI-400051 3 THE PCIT / CIT, 4 THE D.R., ITAT, MUMBAI BENCH 5 GUARD FILE

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