VIBHAVATI DISTRIBUTORS PRIVATE LIMITED,RANCHI vs. ACIT/DCIT, CEN CIR-1, RANCHI

IN THE INCOME TAX APPELLATE TRIBUNAL, RANCHI BENCH, RANCHI BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI RATNESH NANDAN SAHAY, ACCOUNTANT MEMBER ITA No. 241/Ran/2026 (Assessment Year-2015-16) Vibhavati Distributors Private Limited, ACIT/DCIT, Unit No. 2, Ground Floor, Sri Radhe Central Circle-1, Vs. Krishna Garden, Bariatu, Ranchi. Ranchi-834009 (Jharkhand) PAN No. AADCV 5386 L Appellant/ Assessee Respondent/ Revenue

Assessee represented by Shri Devesh Poddar, A.R. with Shri Rajiv Ranjan Mittal, A.R. Department represented by Shri H. Robindro Singh, CIT-DR Date of hearing 30/07/2026 Date of pronouncement 30/07/2026 O R D E R PER: BENCH 1. This is an appeal filed by the assessee against the order passed under Section 263 of the Income Tax Act, 1961 (in short, the Act) by the ld. PCIT(Central), Patna at Ranchi dated 31/03/2026 for the A.Y. 2015-16. 2. Shri Devesh Poddar with Shri Rajiv Ranjan Mittal, ld ARs appeared for the assessee and Shri H. Robindro Singh, ld. CIT-DR appeared for the revenue. 3. The ld. Authorised Representative has filed additional legal grounds of appeal which reads as follows: "1) For that the initial assessment order passed U/s 147 dated 31/03/2024 is itself void and as such, the impugned order U/s 263 passed on such invalid order has no legs to stand. 2) For that the original assessment order passed U/s 147 dated 31/03/2024 is contended to be avoid to the extent that the 148 proceedings was initiated vide notice dated 31/03/2022 U/s 148A(b) compliance to which was sought for on or before 07/04/2022, whereas, as per the provisions of law, the clear period of not less than 7 days should be allowed in the show cause notice period. Reliance on this legal issue is placed upon the decision of Hon'ble Jurisdictional High Court in the case of Satish Kumar Vs PCIT in WP 2640/2023 dated 28/08/2023. As such, the notice issued U/s 148A(b) dated 31/03/2022 was bad in law and proceedings initiated thereby is fit to be quashed. We humbly pray that the above grounds may kindly be admitted as fresh legal ground since the same goes to the very root of assessment proceedings and no fresh document or evidence is required to be called for. We pray that the ground be kindly admitted for adjudication as a fresh legal ground being raised before your honour in the light of decision of Hon'ble Apex Court in case of NTPC VS CIT 229 ITR 383 (SC)." 4. It was submitted by ld AR that the notice issued under Section 148A(b) of the Act is dated 31/03/2022 and the time given is 07/04/2022 which is less than 7 days. The notice issued under Section 148A(b) of the Act reads as follows:

It was the prayer that in view of the decision of the Hon'ble Jurisdictional High Court in the case of Satish Kumar Vs Pr.CIT in WP(T) No. 2640 of 2023 dated 28/08/2023, notice issued under Section 148A(b) of the Act may be quashed and the consequential assessment order also may be quashed. The Hon'ble Jurisdictional High Court has held as follows: "5. The entire periphery and ambit of the legal ground is confined to the interpretation of expression "being not less than 7 days..." That as demonstrated by the assessee the notice dated 12th March, 2022 u/s.148A of the Act states that the assessee shall submit the response with supporting documents on or before 18th March, 2022. Therefore, as per section 148A(b) of the Act, excluding these two das ie. Date of issuance of the notice and the date on when response is sought from the assessee, a clear 7 days time 4 should have been provided to the assessee as has been held by the Hon'ble Jurisdictional High Court in the case of Satish Kumar vs Pr. CIT passed in W.P.(T) No.2640 of 2023 dated 28.8.2023. The relevant part of the judgment is extracted as follows: 7. To decide the lis involved in the instant application it is necessary to peruse the provisions of the Act which governs the issue in hand, which is quoted herein below:- Section 148A(b) of the I.T. Act. "148A (b) provide an opportunity of being heard to the assessee, by serving upon him a notice to show cause within such time, as may be specified in the notice, being not less than seven days and but not exceeding thirty days from the date on which such notice is issued, or such time, as may be extended by him on the basis of an application in this behalf, as to why a notice under section 148 should not be issued on the basis of information which suggests that income chargeable to tax has escaped assessment in his case for the relevant assessment year and results of enquiry conducted, if any, as per clause (a);" From bare perusal of Section 148A(b) it appears that minimum 7 days is required to be given to the Assessee for filing reply. This 7 day is to be calculated by ignoring the date of issue and the last date of submission. In other words, minimum 7 clear days has to be provided to the Assessee for filing reply. In this regard reference may be made to the case of Pioneer Motors (Private )Ltd. Vs Muncipal Council, Nagercoil reported in AIR 1967 sc 684, wherein at paragraph 8 & 9, the Hon'ble Apex Court has deliberated the issue with regard to counting of dates. "8. The words "not being less than one month" do imply that clear one months's notice was necessary to be given that is both the first day and the last day of the month had to be excluded. "When...... 'not less than' so many days are to intervene, both the terminal days are excluded from the computation". 9....................... In every case the words have to be construed in the context taking into consideration the language used and the object to be achieved. As we have said above, the use of the words "not being less than one month" implies the giving of a clear month excluding both the first and the last day of the month……………………………………………………………………………. Emphasis supplied. 6. Considering the aforestated judgment as per the notice issued to the assessee u/s.148A of the Act, the assessee gets only five clear days for response i.e. excluding the date of issuance of the notice and the date on which the response is sought for. This is, therefore, violative of the mandate as prescribed in the Act and also as per the principles laid down by the Hon'ble High Court (supra). Therefore, on this score alone, the notice u/s.148A(b) of the Act is hereby quashed and set aside and all the subsequent proceedings becomes a nullity and nonest in the eyes of law."

PCIT (Central) ignored the submissions made and passed the impugned order u/s 263 dated 31/03/2026 setting aside the assessment for fresh adjudication. Aggrieved, the appellant is in appeal before this Hon'ble Tribunal. In the reassessment proceeding AO issued notices u/s 142(1), received confirmations, bank statements, ITRs and financials transaction with Lagan Goods P Ltd, and after examination made the addition, the order is neither erroneous nor prejudicial. Complete disclosure of the sale of investment during the year in the return and during reassessment negates any suggestion that the AO was misled or that material was withheld. PCIT stated that the Assessing officer failed to carry out necessary inquiry/verification on the issue to reach to a logical, factual conclusion which he was duty bound to perform as an Assessing Officer. The inaction on part of the assessing officer clearly makes the order passed by the assessing officer on 31.03.2024 erroneous in so far as interest of revenue is concerned, as issues involving substantial ramification of revenue was erroneously concluded without inquiry/ verification. Mere audit objection and because a different approach should have been taken, is not enough to say that the order of the Assessing Officer was erroneous or prejudicial to the interests of the Revenue. The jurisdiction could be exercised if the Commissioner of Income-tax was satisfied that the basis for exercise of jurisdiction existed. No rigid rule could be laid down about the situation when the jurisdiction can be exercised. Moreover, where the PCTT alleges inadequate enquiry, he must himself conduct minimal enquiry and record a finding that the AO's view is unsustainable in law; a bare remand for "fresh examination" is impermissible. The impugned order contains no such finding and merely directs de novo assessment. Cases Relied ITO v. DG Housing Projects Ltd. (2012) 343 ITR 329 (Del AO cannot be faulted for not examining a matter never within the reassessment's scope. An order cannot be "erroneous" for failing to do what the AO had no occasion or jurisdiction to do. Assessment was reopened on the insight portal information regarding receipt from Lagan Good Pvt. Ltd The reasons recorded u/s 148 were confined to the Rs. 1,33,00,000 from Lagan Goods P Ltd. The other credits, never part of the reasons, remain governed by the 153A order. Revision of a reassessment order is permissible only qua issues forming the subject-matter of reassessment; for other issues The 153A order dated 22/04/2021 is the assessment on the field for everything except the Insight-based credit, limitation for revising any issue outside the reassessment's subject-matter runs from the end of the FY in which that 153A order was passed -i.e. from 22/04/2021, expiring 31/03/2024. A 263-order passed after that date on the "other credits" is time-barred, For Section 263 revisionary powers, the two-year limitation period for issues left untouched by a reassessment order must be counted from the date of the original assessment order under 153A, not the subsequent reassessment order. Supreme Court of India in landmark judgment in the case of CIT v. Alagendran Finance Ltd. (2007) 293 ITR 1 (SC) held that the limitation period for revision under Section 263 on an untouched issue runs from the original assessment date, not the reassessment order. Bombay High Court also in Ashoka Buildcon Ltd. v. ACIT (2010) 325 ITR 574 (Bom), ruled on the limits of revisional jurisdiction under Section 263 of the Income Tax Act, 1961, holding that the limitation period for revision applies to the original assessment on untouched issues. Principal Commissioner invokes revision under Section 263 on an original assessment item past two years from the original order, the action is void and barred by limitation. Section 263 is attracted only where the order is both erroneous and prejudicial to the interests of the revenue. The conditions are cumulative. The record discloses that the S. 263 proceedings were initiated only after, and solely because of, the audit objection. The impugned order reproduces the objection without independent examination of the submission made in reply to the show cause and already on the AO's record. Section 263 requires the PCIT's own satisfaction upon examination of the record. An order passed to placate the audit party suffers from borrowed satisfaction and non-application of mind. Cases Relied CIT v. Sohana Woollen Mills (2008) 296 ITR 238 (P&H)

Jeevan Investment & Finance (P) Ltd. v. CIT (2017) 88 taxmann.com 552 (Mum) Sunbeam Auto Ltd. v. CIT (2011) 332 ITR 167 (Del). Explanation 2(a) to S 263 is not a charter for the PCIT to substitute his view. It operates where no enquiry is made, and not where the PCIT considers the enquiry inadequate. The distinction between "lack of enquiry" and "inadequate enquiry" survives the Explanation Cases Relied PCIT v. Delhi Airport Metro Express (P) Ltd. (2017) 398 ITR 8 (Del) Narayan Tattoo Rane v. ITO (2016) 70 taxmann.com 227 (Mum-Trib) Amira Pure Foods (P) Ltd. v. PCIT (2017) 88 taxmann.com 100 (Del-Trib) It is most respectfully prayed that this Hon'ble Tribunal be pleased to: Quash the impugned order dated 31/03/2026 passed u/s 263 as being without jurisdiction and bad in law, Grant such further relief as the facts and circumstances warrant."

Sd/- Sd/- (RATNESH NANDAN SAHAY) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER Ranchi, Dated: 30/07/2026 *Ranjan Copy to: 1. Assessee 10