SHRI CHINTAN KANJIBHAI KATARIYA,ANJAR-KUTCH vs. THE PR. CIT-1, RAJKOT, RAJKOT

आयकर अपीलीय अिधकरण, राजकोट �यायपीठ, राजकोट। In The Income Tax Appellate Tribunal, Rajkot Bench, Rajkot Before Dr. BRR Kumar, Vice President And Shri Sonjoy Sarma, Judicial Member

आयकर अपील सं./ITA No. 53/RJT/2022 [ �नधा�रण वष�/Assessment Year: 2012-13 ] Chitan Kanji Katariya The Principal Commissioner Of Nr. Pinjora Peer, B/H. Referral Income Tax-1 Vs. Hospital, Anjar-Kutch-370110 Rajkot-360001, Gujarat Gujarat �थायीलेखासं./जीआइआरसं./PAN/GIR No.: ALNPK6008Q (अपीलाथ�/Appellant) (��यथ�/Respondent) Appellant by : Shri Mehul Ranpura, Ld. AR Respondent by : Shri Ram Tiwari, Ld. CIT(DR) Date of Hearing : 29/07/2026 Date of Pronouncement : 06/08/2026

:: ORDER :: Per, Shri Sonjoy Sarma, JM: The present appeal has been preferred by the assessee against the revisional order passed by the learned Principal Commissioner of Income-tax, Rajkot-1 [hereinafter referred to as “Ld.PCIT”] under section 263 of the Income-tax Act, 1961, [hereinafter referred to as “the Act”] dated 17.01.2022. By the impugned order, the learned PCIT set aside the assessment order dated 13.12.2019, passed under section 144 read with section 147 of the Act, holding that same to be erroneous insofar as it was prejudicial to the interests of the Revenue, and directed the Assessing Officer to re-examine the issue by conducting necessary enquiries and investigations and thereafter frame the assessment afresh in accordance with law.

ITA No. 53/RJT/2022 Chintan Kanjibhai Katariya 02. Brief facts of the case are that the assessee is an individual carrying on business as a proprietor of M/s Shreeji Engineering Works, filed the return of income for the Assessment Year 2012–13 on 30.09.2019, declaring a total income of Rs.23,99,580/-. The assessment was completed ex parte under section 144 read with section 147 of the Income-tax Act, 1961 vide order dated 13.12.2019, determining the total income at Rs.52,28,120/-. In the said assessment, the Assessing Officer made a lump-sum addition of Rs.16,63,303/-, being 5% of the cash deposits of Rs.3,32,66,074/- made in the assessee’s bank accounts during the relevant previous year. Subsequently, the Principal Commissioner of Income-tax, Rajkot-1, on examination of the assessment records, formed a prima facie view that the assessment order was erroneous and prejudicial to the interests of the Revenue. According to the PCIT, the assessee had deposited cash aggregating to Rs.3,32,66,074/- in the bank accounts during the relevant previous year and had failed to furnish any satisfactory explanation regarding the source thereof. Therefore, the entire amount was liable to be assessed as unexplained money under section 69A of the Act. However, the Assessing Officer had made only an estimated addition of Rs.16,63,303/-, equivalent to 5% of the cash deposits, without making any proper enquiry or assigning cogent reasons for adopting such an estimate. Accordingly, the PCIT invoked the revisional jurisdiction under section 263 of the Act and, vide order dated 17.01.2022, held that the assessment order dated 13.12.2019 passed under section 144 read with section 147 was erroneous in so far as it was prejudicial to the interests of the Revenue. The Ld. PCIT, therefore, set aside the assessment with a direction to the Assessing Officer to frame the assessment afresh in accordance with law after conducting necessary enquiries.

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ITA No. 53/RJT/2022 Chintan Kanjibhai Katariya amounting to Rs.3,32,66,074/- during the assessment proceedings and, after considering the facts and circumstances of the case, estimated the income at 5% of such cash deposits, resulting in an addition of Rs.16,63,303/-. Besides the said addition, the Assessing Officer also assessed the returned income, including undisclosed TDS gross receipts reflected in Form No. 26AS amounted to Rs.7,80,09,410/-, the receipts disclosed by the assessee in the return of income were Rs.5,47,04,734/-, resulting in a difference of Rs.2,33,04,676/-. Holding that the assessee had failed to satisfactorily explain the said difference. Accordingly estimated the profit on such alleged undisclosed receipts at 8% by invoking the provisions of section 44AD of the Income Tax Act,1961, and made an addition of Rs.11,65,233/- to the total income of the assessee. It was, therefore, argued that the Assessing Officer had applied his mind to the issue and the assessment order could neither be regarded as erroneous nor prejudicial to the interests of the Revenue. Accordingly, it was prayed that the revisional order passed under section 263 of the Act be set aside.

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ITA No. 53/RJT/2022 Chintan Kanjibhai Katariya order, it is evident that the Assessing Officer, while framing the ex parte assessment under section 144 read with section 147 of the Act, adopted the rate of 5% on the aggregate cash deposits without making any meaningful enquiry or verification regarding the source and nature of the deposits and without examining the relevant books of account or other supporting evidence. Such an ad hoc estimation, in the absence of any proper enquiry, renders the assessment order both erroneous and prejudicial to the interests of the Revenue. Therefore, the Ld. PCIT was justified in exercising the revisional jurisdiction under section 263 of the Act. We find no infirmity in the impugned revisional order and accordingly uphold the same. The grounds raised by the assessee are dismissed.

Order pronounced in the open court on this 6th day of August, 2026.

Sd/- Sd/- [ Dr. BRR Kumar] [ Shri Sonjoy Sarma ] Vice President Judicial Member राजकोट/Rajkot िदनांक/ Date: 06/08/2026 Copy of the order forwarded to : 1. The assessee 2. The Respondent 3. CIT 4. The CIT(A) 5. DR, ITAT, Rajkot 6. Guard File By order //True Copy// Sr. Private Secretary ITAT, Rajkot

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