CHANDAN KUMAR SINGH,DELHI vs. PR CIT , DELHI

ITA 3109/DEL/2026Status: DisposedITAT Delhi09 October 2026AY 2022-238 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal dismissed the assessee's appeal. It found that the PCIT had correctly identified that the AO had not conducted adequate inquiries and verification regarding the nature and taxability of the Rs. 1,80,00,000/- transaction. The Tribunal distinguished the case of Jyoti Ahuja, noting that the assessee here was engaged in business and not merely a 'pass-through' beneficiary. The Tribunal relied on Supreme Court and Delhi High Court judgments, including Orient Crafts Limited vs. CIT, Amitabh Bachhan, Malabar Industries Co., M.R. Apparels (P) Ltd., and PCIT vs. Delhi Gurgaon Super Connectivity Limited. These judgments affirmed that the PCIT's revisional jurisdiction under Section 263 is valid when the AO's order is erroneous due to lack of inquiry or verification, making it prejudicial to the interest of revenue. The Tribunal also noted that Section 263 does not mandate a prior show-cause notice detailing specific grounds, provided the assessee is given a reasonable opportunity to be heard, as per the principles of natural justice. The assessee's reliance on Chintamani Commodities was deemed unhelpful as it did not consider the cited precedents, particularly Amitabh Bachhan. The appeal was dismissed.

What were the facts?

The appeal concerns Assessment Year 2022-23, arising from an order dated 10.03.2026 passed by the Principal Commissioner of Income Tax (PCIT), Delhi-12, under Section 263 of the Income Tax Act, 1961. A search operation on related persons revealed that the assessee, Chandan Kumar Singh, was a beneficiary of alleged bogus transactions amounting to Rs. 1,80,00,000/- facilitated by one Shri Sanjay Garg, who provided accommodation entries. The PCIT noted that the Assessing Officer (AO) had added Rs. 1,80,00,000/- as income from other sources and Rs. 4,50,000/- as commission under Section 69C. However, the PCIT found that the AO had not conducted adequate enquiry and verification regarding foreign remittances arranged through Shri Sanjay Garg. Consequently, the PCIT concluded that the assessment order was erroneous and prejudicial to the interest of revenue, directing the addition of Rs. 1,80,00,000/- as unexplained expenditure under Section 69C read with Section 115BBE.

What were the issues?

1. Whether the PCIT erred in assuming jurisdiction under Section 263 without finding errors in the assessment order passed under Section 143(3) read with Section 144B, without conducting inquiries, and ignoring the ITAT order in the case of Jyoti Ahuja? 2. Whether the PCIT's show cause notice considering additions under Section 68 read with Section 115BBE, while the Section 263 order directed additions under Section 69C read with Section 115BBE, renders the order unjust? 3. Whether the PCIT erred in directing additions on account of unexplained expenditure under Section 69C read with Section 115BBE instead of bogus purchases, making the order bad in law? Assessee's contentions: The assessee argued that the PCIT lacked jurisdiction under Section 263 as the AO's assessment order was not erroneous or prejudicial to revenue. Reliance was placed on the ITAT decision in Jyoti Ahuja, where the assessee was considered a 'pass-through' beneficiary earning only commission. The assessee also contended that the discrepancy between the show cause notice (Section 68) and the final direction (Section 69C) vitiated the proceedings. The assessee further argued that the AO's treatment of the amount as income from other sources was correct. Authorities cited: Jyoti Ahuja [ITA 4270/Del/2025] and Chintamani Commodities [ITA 2610/Del/2024]. Revenue's contentions: The revenue supported the PCIT's order, arguing that Section 263 proceedings are justified when the AO fails to conduct adequate inquiries. Explanation 2(a) to Section 263 was invoked to emphasize that orders passed without proper inquiries are deemed erroneous and prejudicial to revenue.

Which sections of the Income-tax Act were involved?

Section 263,Section 143(3),Section 144B,Section 69C,Section 115BBE,Section 68,Section 147

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “G” NEW DELHI

Before: SHRI SATBEER SINGH GODARA & SHRI SANJAY AWASTHI

For Appellant: Shri Sanjay Josi, CA
For Respondent: Shri Sher Singh, CIT DR
Hearing: 08.09.2026

PER SANJAY AWASTHI, ACCOUNTANT MEMBER:

1.

This appeal arises from order dated 10.03.2026, passed u/s 263 of the Income Tax Act, 1961 (hereafter as “the Act”), by Ld. PCIT, Delhi-12. 1.1 In this case, a search and seizure operation was carried out on Shri Rupesh Kumar Batra, Aditya Kumar Jha and others on 10.10.2021. It was found that a connected person, one Shri Sanjay Garg, was providing accommodation entries in lieu of cash. Shri Sanjay Garg indicated that the present assessee is one of the beneficiaries of an allegedly bogus transaction amounting to Rs.1,80,00,000/-.

1.

2 The Ld. PCIT examined the assessment records a

The order continues below.

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