INCOME TAX OFFICER, WARD-6(1), DELHI vs. CUMULUS EXPORTS PRIVATE LIMITED, DELHI

PDF · subscribers
ITA 3425/DEL/2026Status: DisposedITAT Delhi03 August 2026AY 2018-194 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that once the PCIT's order under section 263, which directed the addition of the entire bogus purchase, was quashed by the ITAT, the subsequent assessment order giving effect to it had no basis. Therefore, the assessment order was quashed.

What were the facts?

The Revenue appealed against an order that allowed the assessee's appeal against an assessment order. The original assessment order had treated purchases as non-genuine but only added the profit element, not the entire expenditure.

What were the issues?

Whether the assessment order was erroneous and prejudicial to the revenue's interest, and if the entire bogus purchase should be disallowed. The validity of an assessment order passed pursuant to a quashed revisionary order was also considered.

Which sections of the Income-tax Act were involved?

Section 147,Section 263,Section 69C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘A’, NEW DELHI

For Respondent: Shri Zafarul Haque Tanweer, CIT-D.R
Hearing: 03.08.2026Pronounced: 03.08.2026

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘A’, NEW DELHI BEFORE SH. SATBEER SINGH GODARA, JUDICIAL MEMBER AND SH. NAVEEN CHANDRA, ACCOUNTANT MEMBER ITA No. 3425/Del/2026 (Assessment Year : 2018-19) ITO Vs. Cumulus Exports Pvt. Ltd. Ward – 6(1) E-10, Ram Dutt Enclave New Delhi Old Pankha Road, Uttam Nagar, Delhi – 110 059 PAN : AADCC 9140 R (APPELLANT) (RESPONDENT) Assessee by -None- Revenue by Shri Zafarul Haque Tanweer, CIT-D.R. Date of hearing: 03.08.2026 Date of Pronouncement: 03.08.2026

ORDER PER NAVEEN CHANDRA, ACCOUNTANT MEMBER : The instant appeal filed by the Revenue is directed against the order dated 29.01.2026 passed by the ld. Commissioner of Income-tax (Appeals)/NFAC, Delhi [hereinafter referred to as the ‘Ld. CIT(A)/NFAC’] arising from the Assessment Order u/s 147 r.w.s 263 of the I.T Act, 1961 dated 28.03.2025 passed by the Income Tax Officer, Ward 6(1), Delhi for the A.Y. 2018-19.

ITA No. 3425/DEL/2026 [A.Y 2018-19] ITO vs. Cumulus Exports Pvt. Ltd. 2. None appeared on behalf of the assessee. We heard the ld. DR at length who assisted us with the facts of the case. Case records carefully perused and considered.

3.

Revenue filed the following grounds of appeal as under: 1. “Whether the Ld. CIT(A) erred in relying on ITAT order where Ld. ITAT erred in holding the assessment order passed by the AO was not erroneous and prejudicial to the interest of the revenue within the meaning of section 263 of the Act, despite the fact that AO has treated the purchases as non-genuine but restricting the addition only to profit element instead of disallowing entire expenditure u/s 69C of the Act' 2. Whether the Ld.CIT(A) erred in law in entertaining an appeal against the order passed to give effect to the order of Ld. CIT. 3. The appellant craves leave to add, alter or amend any/all of the grounds of appeal before or during the course of the hearing of the appeal.” 4. Brief facts of the case are that the assessee is a company which filed its return of income for A.Y. 2018-19 on 31.10.2018 declaring total income at Rs.17,22,470/-. The AO received information that a fraud was detected by CBIC, in which the name of the assessee company M/s Cumulus Exports Private Limited was found as beneficiary. On the basis of such information, the case of the assessee was reopened and the assessment was completed u/s 147 r.w.s 144B on 24.03.2023 at assessed income of Rs.28,15,926/-.

5.

In the assessment proceeding, the AO found that the Assessee had declared gross profit @9.26% on total sale of 10,75,02,398/- in the audited profit & loss A/c for A.Y. 2018-19. The AO applied the same profit ratio on bogus purchase of Rs.1,18,08,380/-, and made a total addition of Rs.10,93,456/-. Thereafter, the Ld. PCIT-1, Delhi passed order u/s 263 of the Act on 19.03.2025 wherein it was held that the assessment order passed Page 2 of 5

ITA No. 3425/DEL/2026 [A.Y 2018-19] ITO vs. Cumulus Exports Pvt. Ltd. on 24.03.2023 was erroneous and prejudicial to the interest of the revenue and further directed the Ld. AO to pass an order u/s 263 r.w.s 147 directing for addition of entire bogus purchase amounting to Rs.1,18,08,380/- u/s 69C of the Act. Subsequently, assessment order u/s 147 r.w.s 263 was passed on 28.03.2025 by assessing the total income at Rs.1,35,30,845/- making addition of Rs.1,18,08,380/- u/s 69C of the Act on account of bogus purchase. 6. Aggrieved, assessee was in appeal before the ld. CIT(A) which was allowed. Aggrieved, Revenue is now in appeal before us. 7. Before us, ld. Counsel for the assessee stated that the ITAT has held that the assessment order u/s 147 r.w.s 144B on 24.03.2023 of the AO, was not erroneous and prejudicial to the interest of the Revenue and had quashed the PCIT’s order u/s 263 of the Act dated 19.03.2025. 8. We have heard the learned DR and perused the material available on record. We find that once the PCIT’s order under section 263 of the Act has been quashed by ITAT, the consequent AO’s order giving effect to the order under section 263 of the Act, has no legs to stand. The same is accordingly, quashed. Appeal decided in aforesaid terms. The appeal of the Revenue is dismissed.

9.

In the result, appeal filed by the Revenue in ITA No.3425/Del/2026 is dismissed.

Page 3 of 5

ITA No. 3425/DEL/2026 [A.Y 2018-19] ITO vs. Cumulus Exports Pvt. Ltd. Order pronounced in the open court on 03.08.2026 Sd/- Sd/- (SATBEER SINGH GODARA) (NAVEEN CHANDRA) JUDICIAL MEMBER ACCOUNTANT MEMBER Date:- 19.08.2026 Priti Yadav, Sr. Ps* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI

Page 4 of 5

More judgments on Section 147

All 49,210 judgments and leading authorities on Section 147 →

Recent GST High Court judgments

Search GST case law →