MALOOK CHAND COTTON AND OIL MILLS,ALIGARH vs. PRINCIPAL COMMISSIONER OF INCOME TAX AGRA - 1, AGRA

ITA 487/AGR/2026Status: DisposedITAT Agra22 October 2026AY 2013-1418 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the additional ground of appeal, challenging the jurisdiction of the PCIT under section 263, was admitted as it was a legal ground with all facts available on record. The Tribunal noted the list of dates provided by the assessee regarding the assessment proceedings initiated by the notice u/s 148 dated 30.07.2022. Following the decision of a coordinate bench in Sub Major Sub Bhadauria vs. ITO and drawing support from other High Court judgments, the Tribunal held that if the original assessment order is illegal or nullity in the eyes of law, the PCIT cannot assume jurisdiction under section 263 to revise such a non-est order. The Tribunal found that the notice u/s 148 dated 30.07.2022 was bad in law, making the subsequent assessment order dated 20.05.2023 also bad in law. Therefore, the revision order passed by the PCIT u/s 263 was quashed as it was passed against a non-est order. The additional ground of appeal was allowed, and other grounds were left undecided as academic.

What were the facts?

The assessee, Malook Chand Cotton And Oil Mills, filed its return for AY 2013-14 declaring Rs. 57,42,144. The assessment u/s 143(3) was completed on 01.03.2016 at Rs. 61,39,970. Subsequently, information was received about bogus purchases of Rs. 2,45,52,845 from an accommodation entry operator. The Assessing Officer (AO) initiated proceedings u/s 148A and 148, and on 20.05.2023, added Rs. 28,49,494 (10% profit on bogus purchases) under sections 147 and 143(3) r.w.s 144. The Principal Commissioner of Income Tax (PCIT) initiated revision proceedings u/s 263, observing that the entire bogus purchases of Rs. 2,63,74,441 should have been disallowed. The PCIT set aside the AO's order. The assessee appealed to the ITAT, raising an additional ground that the revision order was void ab initio due to the invalidity of the assessment order.

What were the issues?

1. Whether the order passed u/s 263 of the Income Tax Act, 1961, by the Ld. PCIT, Agra-1, is liable to be quashed for lacking jurisdiction, as the assessment order dated 20.05.2023 passed u/s 147 is bad in law and void ab initio due to the notice u/s 148 dated 30.07.2022 being barred by limitation? Assessee's Contention: The assessee argued that the notice u/s 148 dated 30.07.2022 was issued beyond the prescribed limitation period, rendering it bad in law. Consequently, the assessment order passed u/s 147 based on this invalid notice was also bad in law and void ab initio. Therefore, the PCIT lacked jurisdiction to initiate revision proceedings u/s 263 against a non-est assessment order. The assessee relied on the Supreme Court decision in Union of India & Ors. v. Rajeev Bansal and a coordinate bench decision in Westlife Development Ltd. Vs PCIT-5, Mumbai. Revenue's Contention: The revenue contended that since the original assessment order passed u/s 147 had become final and was not challenged by the assessee, the assessee could not challenge its legal validity when the PCIT invoked the provisions of section 263.

Which sections of the Income-tax Act were involved?

Section 263,Section 147,Section 143(3),Section 148,Section 148A,Section 144,Section 144B,Section 149(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AGRA(DB

Before: SUNIL KUMAR SINGHBRAJESH KUMAR SINGH

For Appellant: Shri Pankaj Gargh, Adv
For Respondent: Ms. Sangeeta Yadav, CIT DR
Hearing: 06.08.2026Pronounced: 22.10.2026

PER: BRAJESH KUMAR SINGH, A.M.

This appeal is directed against the impugned order dated 24.03.2026 passed in Revision No. PCIT, Agra-1/Revision-263/100000985574/2026 by the Ld. PCIT, Agra-1 (hereinafter referred to as the Ld. PCIT), u/s. 263 of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) for the A.Y. 2013-

14.2.

Brief facts of the case: The assessee firm filed its return of income for AY. 2013-14 on 29.09.2013 declaring total income of Rs. 57,42,144/-. The case was selected for scrutiny and assessment u/s 143(3) of the Act was completed on 01.03.2016 at the assessed income of Rs. 61,39,970/-. Thereafter, the AO received an information that a survey was conducted on 08.08.2014 in the

The order continues below.

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