PACIFIC INDUSTRIES LIMITED ,UDAIPUR, RAJASTHAN vs. ACIT, CENTRAL CIRCLE-1, UDAIPUR, UDAIPUR, RAJASTHAN

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE DR. MITHA LAL MEENA, HON’BLE ACCOUNTANT MEMBER AND SHRI SUDHIR PAREEK, HON’BLE JUDICIAL MEMBER ITA No. 933 to 938/Jodh/2025 (Assessment Years 2015-16 to 2016-17 and 2019-20 to 2022-23) [ Pacific Industries Limited ACIT, Central Circle-1, Brahmano Ka Guda, Village, Udaipur. Bedla, Udaipur-313001 PAN No. AAACP7645R Assessee by Shri Sapan Jain, Advocate (Virtually) Revenue by Smt. Seema Meena CIT-DR (Virtually) Date of Hearing 19 / 05 / 2026 Date of Pronouncement 03 / 06 / 2026 ORDER PER BENCH: These appeals are filed by assessee against the separate order of Commissioner of Income Tax, Appeal, Udaipur-2 [hereinafter referred to as the CIT(A)] even dated 27.08.2025 with respect to the assessment year 2015-16 to 2016-17 and 2019-20 to 2022-23.

2 ITA No. 933 to 938/Jodh/2025 (Assessment Years 2015-16 to 2016-17 and 2019-20 to 2022-23) (Appeal), [hereinafter referred to as "Ld. CIT (A)"] u/s 250 of the Income Tax Act, 1961 ["the Act"] is perverse, arbitrary and bad in law. 2. Under the facts and circumstances of the case and in law, the Ld. CIT(A) erred in (a) upholding the legal validity of the impugned assessment and impugned notice dated 27.03.2024 issued u/s 148 of the Act. (b) upholding that the notice dated 27.03.2024 issued u/s 148 of the Act and consequential assessment u/s 147 of the Act, is not barred by limitation. (c) upholding the impugned notice dated 27.03.2024 issued u/s 148 of the Act, by the ACIT Central Circle 1, Udaipur in gross violation of provision of Section 148 r.w.s. 151A and relevant notification. (d) upholding that the approval granted u/s 151 and u/s 148B of the Act is valid. (e) upholding that the Ld. AO disposed off the objection raised by the Appellant. 3. Under the facts and circumstances of the case and in law, the Ld. CIT(A) has erred: (a) in confirming the estimated addition of Rs. 5,98,931/- in respect of alleged estimated profits on alleged undisclosed cash sales. (b) in confirming the impugned addition of Rs. 5,98,931/- made on the basis of incorrect, vague, incomplete, data / information. (c) giving factually incorrect and inconsistent observations/findings or inferences against the Appellant. 4. Under the facts and circumstances of the case and in law, the Ld. CIT(A) erred in: (a) rejecting the books of accounts u/s 145(3) of the Act. (b) upholding the action ofthe Ld. AO in applying and making estimated addition by applying higher NP rate. 5. Under the facts and circumstances of the case and in law, the Ld. CIT(A) erred in upholding the action of Ld. AO in making adjustments to book profits u/s 115JB of the Act in respect of impugned addition of alleged estimated additional income. 6. Under the facts and circumstances of the case and in law, the Ld. CIT(A) erred in confirming the levying of interest u/s 234A, 234B, 234C, and 234D of the Act. 7. Under the facts and circumstances of the case and in law, the Ld. CIT(A) erred in confirming the action of the Ld. AO in adjusting the MAT credit of taxes paid against the impugned tax payable on impugned assessed total income. 8. The appellant craves leave to add, alter, amend, or withdraw any ground of appeal at the time of hearing.

3 ITA No. 933 to 938/Jodh/2025 (Assessment Years 2015-16 to 2016-17 and 2019-20 to 2022-23) ITA NO. 934/JODH/2025 (A.Y. 2016-17) 1. Under the facts and the circumstances of the case and in law, Impugned order dated 27.08.2025 passed by the Learned Commissioner of Income Tax (Appeal), [hereinafter referred to as "Ld. CIT (A)"] u/s 250 of the Income Tax Act, 1961 ["the Act"] is perverse, arbitrary and bad in law. 2. Under the facts and circumstances of the case and in law, the Ld. CIT(A) erred in (a) upholding the legal validity of the impugned assessment and impugned notice dated 24.03.2024 issued u/s 148 of the Act. (b) upholding that the notice dated 24.03.2024 issued u/s 148 of the Act and consequential assessment u/s 147 the Act, is not barred by limitation. (c) upholding the impugned notice dated 24.03.2024 issued u/s 148 of the Act, by the ACIT Central Circle 1, Udaipur. in gross violation of provision of Section 148 r.w.s. 151A and relevant notification. (d) upholding that the approval granted u/s 151 and u/s 148B of the Act is valid. (e) upholding that the Ld. AO disposed off the objection raised by the Appellant. 3. Under the facts and circumstances of the case and in law, the Ld. CIT(A) has erred: (a) in confirming the estimated addition of Rs. 2,64,237/- in respect of alleged estimated profits on alleged undisclosed cash sales. (b) in confirming the impugned addition of Rs. 2,64,237/- made on the basis of incorrect, vague, incomplete, data /information. (c) giving factually incorrect and inconsistent observations/ findings or inferences against the Appellant. 4. Under the facts and circumstances of the case and in law, the Ld. CIT(A) erred in: (a) rejecting the books of accounts u/s 145(3) of the Act. (b) applying and making estimated addition by applying average NP rate. 5. Under the facts and circumstances of the case and in law, the Ld. CIT(A) erred in upholding the action of Ld. AO in making adjustments to book profits u/s 115JB of the Act in respect of impugned addition of alleged estimated additional income. 6. Under the facts and circumstances of the case and in law, the Ld. CIT(A) erred in confirming the action of the Ld. AO in adjusting the MAT credit of taxes paid against the impugned tax payable on impugned assessed total income. 7. Under the facts and circumstances of the case and in law, the Ld. CIT(A) erred in confirming the levying of interest u/s 234A, 234B and 234C of the Act.

4 ITA No. 933 to 938/Jodh/2025 (Assessment Years 2015-16 to 2016-17 and 2019-20 to 2022-23) 8. The appellant craves leave to add, alter, amend, or withdraw any ground of appeal at the time of hearing. ITA NO. 935/JODH/2025 (A.Y. 2019-20) 1. Under the facts and the circumstances of the case and in law, Impugned order dated 27.08.2025 passed by the Learned Commissioner of Income Tax (Appeal), [hereinafter referred to as "Ld. CIT (A)"] u/s 250 of the Income Tax Act, 1961 ["the Act"] is perverse, arbitrary and bad in law. 2. Under the facts and circumstances of the case and in law, the Ld. CIT(A) erred in (a) upholding the legal validity of the impugned assessment and impugned notice dated 19.03.2024 issued u/s 148 of the Act. (b) upholding the notice dated 19.03.2024 issued u/s 148 of the Act and consequential assessment u/s 147 of the Act, is not barred by limitation. (c) upholding the impugned notice dated 19.03.2024 issued u/s 148 of the Act, by the ACIT Central Circle 1, Udaipur in gross violation of provision of Section 148 r.w.s. 151A and relevant notification. (d) upholding that the approval granted u/s 151 r.w.s. 148B of the Act is valid. (e) upholding that the Ld. AO disposed off the objection raised by the Appellant. 3. Under the facts and circumstances of the case and in law, the Ld. CIT(A) has erred: (a) in giving factually incorrect and inconsistent observations/findings or inferences against the Appellant. (b) in rejecting the books of accounts u/s 145(3) of the Act. (c) in estimating the amount of alleged suppressed profits by taking altogether different yardsticks and confirming the same purely on assumption, presumption and guess work (d) in upholding addition based on loose papers/digital records not supported by certificate u/s 65B of the Indian Evidence Act (Section 63 of Bhartiya Sakshya Adhiniyam, 2023). (e) in making the impugned addition on the basis of incomplete, vague, incorrect data/information which is subject to multiple interpretation or inference and rather depicting loss in alleged transaction. 4. Under the facts and circumstances of the case and in law, the Ld. CIT(A) erred in confirming the estimated addition to the extent of Rs. 15,05,056/- in respect of alleged profits. 5. Under the facts and circumstances of the case and in law, the Ld. CIT(A) erred in upholding the action of Ld. AO in making adjustments to book

5 ITA No. 933 to 938/Jodh/2025 (Assessment Years 2015-16 to 2016-17 and 2019-20 to 2022-23) profits u/s 115JB of the Act in respect of impugned addition of alleged estimated additional income. 6. Under the facts and circumstances of the case and in law, the Ld. CIT(A) erred in confirming the action of the Ld. AO in adjusting the MAT credit of taxes paid against the impugned tax payable on impugned assessed total income. 7. Under the facts and circumstances of the case and in law, the Ld. CIT(A) erred in confirming the levying of interest u/s 234A, 234B, 234C, and 234D of the Act. 8. The appellant craves leave to add, alter, amend, or withdraw any ground of appeal at the time of hearing. ITA NO. 936/JODH/2025 (A.Y. 2020-21) 1. Under the facts and the circumstances of the case and in law, Impugned order dated 27.08.2025 passed by the Learned Commissioner of Income Tax (Appeal), [hereinafter referred to as "Ld. CIT (A)"] u/s 250 of the Income Tax Act, 1961 ["the Act"] is perverse, arbitrary and bad in law. 2. Under the facts and circumstances of the case and in law, the Ld. CIT(A) erred in (a) upholding the legal validity of the impugned assessment and impugned notice dated 11.03.2024 issued u/s 148 of the Act. (b) upholding the notice dated 11.03.2024 issued u/s 148 of the Act and consequential assessment u/s 147 of the Act, is not barred by limitation. (c) upholding the impugned notice dated 11.03.2024 issued u/s 148 of the Act, by the ACIT Central Circle 1, Udaipur in gross violation of provision of Section 148 r.w.s. 151A and relevant notification. (d) upholding that the approval granted u/s 151 r.w.s. 148B of the Act is valid. (e) upholding that the Ld. AO disposed off the objection raised by the Appellant. 3. Under the facts and circumstances of the case and in law, the Ld. CIT(A) has erred: (a) in giving factually incorrect and inconsistent observations/findings or inferences against the Appellant. (b) in rejecting the books of accounts u/s 145(3) of the Act.

6 ITA No. 933 to 938/Jodh/2025 (Assessment Years 2015-16 to 2016-17 and 2019-20 to 2022-23) (c) in estimating the amount of alleged suppressed rofits by taking altogether different yardsticks and confirming the same purely on assumption, presumption and guess work (d) in upholding addition based on loose papers/digital records not supported by certificate u/s 65B of the Indian Evidence Act (Section 63 of Bhartiya Sakshya Adhiniyam, 2023). (e) in making the impugned addition on the basis of incomplete, vague, incorrect data/information which is subject to multiple interpretation or inference and rather depicting loss in alleged transaction. 4. Under the facts and circumstances of the case and in law, the Ld. CIT(A) erred in confirming the estimated addition the extent of Rs. 7,41,535/- in respect of alleged profits. 5. Under the facts and circumstances of the case and in law, the Ld. CIT(A) erred in upholding the action of Ld. AO in making adjustments to book profits u/s 115JB of the Act in respect of impugned addition of alleged estimated additional income. 6. Under the facts and circumstances of the case and in law, the Ld. CIT(A) erred in confirming the action of the Ld. AO in adjusting the MAT credit of taxes paid against the impugned tax payable on impugned assessed total income. 7. Under the facts and circumstances of the case and in law, the Ld. CIT(A) erred in confirming the levying of interest u/s 234A, 234B, 234C, and 234D of the Act. 8. The appellant craves leave to add, alter, amend, or withdraw any ground of appeal at the time of hearing ITA NO. 937/JODH/2025 (A.Y. 2021-22) 1. Under the facts and the circumstances of the case and in law, Impugned order dated 27.08.2025 passed by the Learned Commissioner of Income Tax (Appeal), [hereinafter referred to as "Ld. CIT (A)"] u/s 250 of the Income Tax Act, 1961 ["the Act"] is perverse, arbitrary and bad in law. 2. Under the facts and circumstances of the case and in law, the Ld. CIT(A) erred upholding the impugned assessment order, which is passed without valid DIN as required by the law. 3. Under the facts and circumstances of the case and in law, the Ld. CIT(A) erred in

7 ITA No. 933 to 938/Jodh/2025 (Assessment Years 2015-16 to 2016-17 and 2019-20 to 2022-23) (a) upholding the impugned assessment and impugned notice dated 11.03.2024 issued u/s 148 of the Act. (b) upholding the impugned notice dated 11.03.2024 issued u/s 148 of the Act, by the ACIT Central Circle 1, Udaipur in gross violation of provision of Section 148 r.w.s. 151A and relevant notification. (c) upholding that the approval granted u/s 151 r.w.s. 148B of the Act is valid. (d) upholding that the Ld. AO disposed off the objection raised by the Appellant. 4. Under the facts and circumstances of the case and in law, the Ld. CIT(A) has erred: (a) in confirming the estimated addition of Rs. 11,39,949/-in respect of alleged estimated profits on alleged supressed sales/receipts. (b) in confirming the impugned addition of Rs. 11,39,949/- made on the basis of incorrect, vague, incomplete, data / information which is not corroborated. (c) in giving factually incorrect and inconsistent observations/findings or inferences against the Appellant. (d) in upholding addition based on impugned loose papers/digital extracts etc. not supported by certificate u/s 65B of the Indian Evidence Act (Section 63 of Bhartiya Sakshya Adhiniyam, 2023). 5. Under the facts and circumstances of the case and in law, the Ld. CIT(A) erred in: (a) rejecting the books of accounts u/s 145(3) of the Act. (b) applying and making estimated addition by applying average NP rate. 6. Under the facts and circumstances of the case and in law, the Ld. CIT(A) erred in upholding the action of Ld. AO in making adjustments to book profits u/s 115JB of the Act in respect of impugned addition of alleged estimated additional income. 7. Under the facts and circumstances of the case and in law, the Ld. CIT(A) erred in confirming the levying of interest u/s 234A, 234B and 234C of the Act. 8. The appellant craves leave to add, alter, amend, or withdraw any ground of appeal at the time of hearing. ITA NO. 938/JODH/2025 (A.Y. 2022-23) 1. Under the facts and the circumstances of the case and in law, Impugned order dated 27.08.2025 passed by the Learned

8 ITA No. 933 to 938/Jodh/2025 (Assessment Years 2015-16 to 2016-17 and 2019-20 to 2022-23) Commissioner of Income Tax (Appeal), [hereinafter referred to as "Ld. CIT (A)"] u/s 250 of the Income Tax Act, 1961 ["the Act"] is perverse, arbitrary and bad in law. 2. Under the facts and circumstances of the case and in law, Ld. CIT(A) erred in confirming the impugned addition made by the Ld. AO beyond the scope of notice issued u/s 143(2) of the Act. 3. Under the facts and circumstances of the case and in law, the Ld. CIT(A) has erred: (a) in confirming the estimated addition of Rs. 8,23,302/- in respect of alleged estimated profits on alleged supressed sales/receipts. (b) in confirming the impugned addition of Rs. 8,23,302/- made on the basis of incorrect, vague, incomplete, data / information which is not corroborated. (c) in giving factually incorrect and inconsistent observations/findings or inferences against the Appellant. (d) in upholding addition based on impugned loose papers/digital extracts etc. not supported by certificate u/s 65B of the Indian Evidence Act (Section 63 of Bhartiya Sakshya Adhiniyam, 2023). 4. Under the facts and circumstances of the case and in law, the Ld. CIT(A) erred in: (a) rejecting the books of accounts u/s 145(3) of the Act. (b) upholding the action of the Ld. AO in applying and making estimated addition by applying NP rate. 5. Under the facts and circumstances of the case and in law, the Ld. CIT(A) erred in upholding the action of Ld. AO in making adjustments to book profits u/s 115JB of the Act in respect of impugned addition of alleged estimated additional income. 6. Under the facts and circumstances of the case and in law, the Ld. CIT(A) erred in confirming the levying of interest u/s 234A, 234B, and 234C of the Act. 7. The appellant craves leave to add, alter, amend, or withdraw any ground of appeal at the time of hearing. 3. There are interrelated issues raised in these appeals for the assessment years from 2015-16 to 2016-17 and 2019-20 to 2022-23 on

9 ITA No. 933 to 938/Jodh/2025 (Assessment Years 2015-16 to 2016-17 and 2019-20 to 2022-23) similar facts, therefore, these appeals were heard together and adjudicated by this consolidated order for sake of brevity.

10 ITA No. 933 to 938/Jodh/2025 (Assessment Years 2015-16 to 2016-17 and 2019-20 to 2022-23) Granite at Tikhi Ki Badiya Mines were discovered. The appellant firm filed its return of income under Section 139(1) of the Income Tax Act, 1961 on 05.02.2016 declaring total income of Rs. 7,42,58,260/-. A notice under Section 148 of the Act was issued by the AO on 27.03.2024. The AO has completed the assessment proceedings after examining the detailed documents found and seized during the course of search and produced by the appellant with reference to the books of account by observing substantial variation in production of Granite Blocks. However, the AO has made addition of Rs. 5,98,931/- on account of undisclosed business profit to the return income of the assessee while passing the impugned order under Section 147 read with Section 143(3) of the Act of 1961.

The appellant has contended that approval granted under Section 151 is also without application of mind as it has been accorded despite the absence of a valid basis under law for initiating reassessment proceedings beyond the normal limitation period as stated above. Moreover, loose papers/ rough workings being relied

11 ITA No. 933 to 938/Jodh/2025 (Assessment Years 2015-16 to 2016-17 and 2019-20 to 2022-23) upon against the Assessee admittedly is not the books of accounts/documents or evidence within the meaning of Section 149(b) of the Act. Moreover, this is absence of condition precedent for income escapement in the form of asset during the year under consideration and income assessed is less than Rs. 50 Lakhs. The mechanical grant of approval in such circumstances further invalidates the proceedings initiated under Section 148 of the Act. Section 149(1)(b) states that - The AO has in his possession books of accounts or other documents or evidence which reveal that the income chargeable to tax, represented in the form of - (i) an asset; (ii) expenditure in respect of a transaction or in relation to an event or occasion; (iii) an entry or entries in the books of accounts... Hence, the language of section 149(1)(b) includes documents and evidences along with books of accounts. Therefore, the argument of the appellant is not accepted that the document on the basis of which the case was reopened does not tantamount to books of accounts. The appellant has further pleaded that there is an absence of condition precedent for income escapement in the form of asset during the year under consideration and income assessed is less than Rs. 50 Lakhs. The argument of the appellant is not accepted as section 149(1)(b) talks about reopening of the case beyond three years if escaped

12 ITA No. 933 to 938/Jodh/2025 (Assessment Years 2015-16 to 2016-17 and 2019-20 to 2022-23) assessment amounts to or likely to amount to fifty lakh rupees or more. It does not put any condition regarding the addition made on finalization of the assessment; whether it is less than or more than fifty lakh rupees. Hence, the final outcome of the assessment does not limit the reopening and the reasons behind it u/s 148 of the IT Act 1961. The appellant has submitted that the assessment proceedings- initiated u/s 147 by the Ld. AO was invalid and void ab initio as the Appellant raised objection vide reply date 20.06.2024, regarding the maintainability of the impugned notice issued u/s 148 of the Act dated 27.03.2024 and before disposing of the said objections raised by the appellant, Ld. AO issued notice u/s 143(2) dated 21.11.2024. The appellant has raised objection against the notice issued u/s 148 vide letter dated 20.06.2024 which was disposed off by the AO vide letter dated 06.12.2024. Hence, the contention of the appellant is not accepted as the AO has dealt with disposal of objections as per the decisions of various judicial authorities from time to time. The AO has informed the appellant vide letter dated 06.12.2024 that as the assessee's case is covered as per explanation 2(i) of section 148, in cases where search u/s 132 or 132A is carried out after 01.04.2021, AO shall be deemed to have confirmation which suggests that the income chargeable to tax has escaped assessment. In the same letter the AO has attached the approval regarding opening the case by the specified authority.

13 ITA No. 933 to 938/Jodh/2025 (Assessment Years 2015-16 to 2016-17 and 2019-20 to 2022-23) 8. The Ld. counsel for the assessee has submitted that the search action was carried out in the case of appellant of 16.02.2023, where no incriminating material was found relating to any undisclosed activities or unaccounted/unexplained transactions and that there was no unaccounted cash or valuables were found from the premises of the appellant. The appellant has submitted the details of income declared in the return of income, assessed by the AO with estimated trading addition and sustained by Ld. CIT(A) for all the six assessment years in tabular form as under:- AY ITR Filed Return of Return of Impugned Impugned On Income Income addition addition declared by assessed by made by sustained by appellant the Ld. AO Ld. AO Ld. CIT(A) (MAT income) 2015-16 30.09.2015 7,42,58,260/- 7,48,57,190/- 5,98,931/- 5,98,931/- 2016-17 17.10.2016 2,04,92,920/- 2,09,53,800/- 4,60,879/- 2,64,237/- 2019-20 31.10.2019 91,71,409/- 1,56,21,649/- 64,50,240/- 15,05,056/- 2020-21 15.02.2021 (39,26,330/-) 19,27,895/- 58,54,225/- 7,41,535/- 2021-22 28.02.2022 9,94,81,893/- 10,13,81,807/- 18,99,914/- 11,39,949/- 2022-23 01.11.2022 13,45,36,133/- 13,57,29,330/- 11,93,192/- 8,23,303/-

14 ITA No. 933 to 938/Jodh/2025 (Assessment Years 2015-16 to 2016-17 and 2019-20 to 2022-23) Act dated 27.03.2024 issued beyond time limit prescribed under Section 149(1)(b) of the Act as applicable prior to the substitution by Finance Act, 2022, the relevant provisions of the Finance Act are reproduced as under:- (b) if three years, but not more than ten years, have elapsed from the end of the relevant assessment year unless the Assessing Officer has in his possession books of account or other documents or evidence which reveal that the income chargeable to tax, represented in the form of asset, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more for that year. "Provided that no notice under section 148 shall be issued at any time in a case for the relevant assessment year beginning on or before 1st day of April, 2021, if such notice could not have been issued at that time on account of being beyond the time limit specified under the provisions of clause (b) of sub-section (1) of this section, as they stood immediately before the commencement of the Finance Act, 2021:" 10. The Ld. AR contended that the extended period of limitation can be invoked only where the AO is in possession of books of account, documents or evidence” revealing that the income chargeable to tax, represented in the form of an asset has escaped assessment and that such escaped income amounts to or is likely to amount of Rs. 50 Lakhs

15 ITA No. 933 to 938/Jodh/2025 (Assessment Years 2015-16 to 2016-17 and 2019-20 to 2022-23) or more for the relevant assessment year. However, in the present case the additions are made based on only estimation and not on any seized assets or material belonging to appellant and the estimation is based on loose sheets/papers found from the premises not belonging to the appellant assessee. He accordingly, pleaded that the impugned addition not based on books of account, evidence or document or evidence found during the search sustained by the Ld. CIT(A) for assessment year 2015- 16, 2016-17 and 2019-20 were below the threshold limit of Rs. 50 lakhs under Section 149(1)(b) of the Act and moreover, the time limit having regard to the first proviso of Section 149 of the Act, to protects the completed assessment, expired on 31.03.2022 and thus the impugned notice dated 27.03.2024, 24.03.2024 and 19.03.2024 issued under Section 148 of the Act for assessment year 2015-16, 2016-17 and 2019-20 respectively are time barred and therefore, rendered invalid and void ab initio. In support, he placed reliance on the judgment passed by Hon’ble Madras High Court in the case of IDFC Limited Vs. Deputy Commissioner of Income Tax (2023) 155 Taxmann.com 602 (Madras). Accordingly he prayed that the assessment order may be quashed for lack of jurisdiction and being barred by limitation.

16 ITA No. 933 to 938/Jodh/2025 (Assessment Years 2015-16 to 2016-17 and 2019-20 to 2022-23) 11. On the other hand the Ld. DR relied on the impugned order. However, he did not controvert the factual contentions of the appellant assessee with regards to the threshold limit of Rs. 50 Lakhs prescribed under Section 149(1)(b) of the Act and time limitation as per first proviso of Section 149 of the Act. 12. Having heard both the sides, perusal of the material available on the record, impugned orders. We find that there was no incriminating material found during the course of search which could reveal escapement of income represented in the form of any asset. It is noted that the Ld. AO did not have in its possession any book of accounts, documents and evidence satisfying the statutory requirement contemplated under Section 149 of the Act for invoking the extended time limitation period. On the contrary, the addition made in the impugned assessment were based only on estimation and not any on seized material or material belonging to the assessee appellant and further the estimations were based on the loose-sheets, and papers found from the third party premises not belonging to the appellant.

17 ITA No. 933 to 938/Jodh/2025 (Assessment Years 2015-16 to 2016-17 and 2019-20 to 2022-23) because the alleged escapement relied on by the AO were not based on any books of accounts, documents/evidence found during the search and further there was no incriminating material found to reveal any income in the form of any asset. Meaning thereby the impugned additions made by the AO on estimation and sustained by Ld. CIT(A) for the assessment year 2015-16, 2016-17 and 2019-20, were also below the threshold limit of Rs. 50 lakhs prescribed under Section 149(1)(b) of the Act and hence the notices issued under Section 148 of the Act by the AO for the assessment year 2015-16, 2016-17 and 2019-20 are invalid and the consequential assessment proceeding are held to be void ab initio.

18 ITA No. 933 to 938/Jodh/2025 (Assessment Years 2015-16 to 2016-17 and 2019-20 to 2022-23) possession of books of account, documents or evidence" revealing that income chargeable to tax, "represented in the form of an asset", has escaped assessment and that such escaped income amounts to or is likely to amount to Rs. 50 lakhs or more for the relevant assessment year. Accordingly, the impugned notice dated 27.03.2024, 24.03.2024 and 19.03.2024 issued under Section 148 of the Act for assessment year 2015- 16, 2016-17 and 2019-20 respectively are barred by limitation. Accordingly, we hold that the assessment order passed for assessment year 2015-16, 2016-17 and 2019-20 are without jurisdiction and deserves to be quashed.

"55. Thus, with effect from 1-4-2022, even entries in the books of account could be pressed into service by an officer to initiate re- assessment after a period of three years. This cannot be resorted to prior to 1-4-2022 as the law, as it stood then, did not enable the same. Needless to state, the amendment of section 149 by way of substitution on 1-4-2022 is substantive making substantial inroads into the rights of an assessee and can only be taken to be prospective.”

19 ITA No. 933 to 938/Jodh/2025 (Assessment Years 2015-16 to 2016-17 and 2019-20 to 2022-23) 16. Considering the peculiar facts of the case and judicial precedents that the impugned notices dated 27.03.2024, 24.03.2024 and 19.03.2024 with respect to assessment year 2015-16, 2016-17 and 2019-20 respectively issued under Section 148 of the Act, are being held as void ab initio. Consequently the assessment order passed under Section 147 r.w.s. 143(3) of the Income Tax Act, 1961 is held as without jurisdiction and as such quashed.

20 ITA No. 933 to 938/Jodh/2025 (Assessment Years 2015-16 to 2016-17 and 2019-20 to 2022-23) mentioning or disclosing any uniform principle, comparable instance or parameter either based on seized material with direct or indirect nexus to third partly information on objective basis for working of such variation in the NP rates so adopted by the lower authorities. The Ld. AR argued that Ld. CIT(A) merely substitutes one estimate with another by directing computation of NP rates on the basis of average of current year and the preceding year. Meaning thereby both the lower authorities, the AO and the Ld. CIT(A) have proceeded on estimation basis rather on evidence which itself demonstrates that the impugned addition made by the AO and sustained by the Ld. CIT(A) are based on estimation which were devoid of any legal or factual foundation. The NP rates applied by the AO and the Ld. CIT(A) are reproduced in tabular form hereunder:- Assessment Year Estimated NP rate Estimated NP rate applied by AO Applied by CIT(A) 2015-16 7.40% 7.40% 2016-17 6% 3.44% 2019-20 6% 1.40% 2020-21 6% 0.76% 2021-22 6% 3.60% 2022-23 6% 4.14% 19. It is settled principle of law that estimation, however strong, cannot partake the character of evidence. In the present case, the

21 ITA No. 933 to 938/Jodh/2025 (Assessment Years 2015-16 to 2016-17 and 2019-20 to 2022-23) impugned additions have been made on estimations only. On the contrary, the Ld. AR rebutted that even as per the loose sheets relied by the AO the working on assumptive basis for assessment year 2015-16, 2016-17, 2019-20 and 2022-23 reflects loss, while the assessment year 2020-21 and 2021-22, indicates meagre profit. In view of that matter, we hold that in the absence of legally admissible and corroborated material, the impugned additions sustained by the Ld. CIT(A) were not justified. Recently the Hon’ble Mumbai Bench in the case of ITO 12(2)(1) Vs, INVT Electric India Private Limited ITA No. 7038/Mum/2025, dated 07.04.2026 vide para 12 of its order has held as under:-

"12. Once such comprehensive and primary evidences were brought on record, the burden clearly shifted upon the Assessing Officer to either dislodge the same by bringing some tangible material on record or to demonstrate specific discrepancies therein which could justify any adverse inference. However, we find that no such exercise has been undertaken. There is no finding in the assessment order pointing out any defect in the books of account; there is no observation that the purchases recorded do not reconcile with the quantitative details reflected in the stock register; there is no allegation that the corresponding sales are unverifiable or fictitious; nor is there any suggestion that the payments made through banking channels are sham or have been routed back to the

22 ITA No. 933 to 938/Jodh/2025 (Assessment Years 2015-16 to 2016-17 and 2019-20 to 2022-23) assessee. Significantly, the books of account have not been rejected under section 145, which, in itself, is a strong indicator that the primary records maintained by the assessee were found to be in order. In such a factual backdrop, the action of the Assessing Officer in proceeding to make an ad hoc disallowance of 10% of the total purchases, without any rational basis or nexus to any identified defect, is nothing but an arbitrary estimation, bereft of any legal foundation. It is a settled proposition of law that estimation cannot be a substitute for evidence, and suspicion, however strong, cannot partake the character of proof, particularly when the documentary trail remains intact, consistent and uncontroverted." 20. In view of the peculiar facts and Coordinate Mumbai Bench’s Judgment, we hold that the Ld. CIT(A) was not justified in sustaining the estimated addition made by the AO merely based on assumption, presumptions and suspicion. Accordingly, the additions sustained by the Ld. CIT(A) for Rs. 5,98,931/- in ITA No. 933/Jodh/2025 with respect to assessment year 2015-16 is deleted. 21. The issues on merits raised in ITA No. 934 to 938/Jodh/2025 are similar on identical facts to those discussed in ITA No. 933/Jodh/2025 and therefore, our observation and findings given in ITA No.

23 ITA No. 933 to 938/Jodh/2025 (Assessment Years 2015-16 to 2016-17 and 2019-20 to 2022-23) 933/Jodh/2025 shall apply to the appeals in ITA No. 934 to 938/Jodh/2025 in mutatis mutandis, ordered accordingly. 22. In the result all the captioned appeals of the assessee are allowed.

Order pronounced on 03 / 06 / 2026 in the open court.

Sd/- Sd/- (SUDHIR PAREEK) (DR. MITHA LAL MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated : 03 / 06 / 2026. Pritesh Vaishnav PS True Copy Copies to : (1) The appellant. (2) The respondent. (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File

BY ORDER,