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SWETAL VIJAYBHAI SHAH,AHMEDABAD vs PCIT, AHMEDABAD-1, AHMEDABAD | BharatTax

SWETAL VIJAYBHAI SHAH,AHMEDABAD vs. PCIT, AHMEDABAD-1, AHMEDABAD

ITA 1269/AHD/2025Status: DisposedITAT Ahmedabad29 October 2025AY 2018-19Bench: SHRI SANJAY GARG (Judicial Member), SMT. ANNAPURNA GUPTA (Accountant Member)1 pages

AI SummaryAllowed

Facts

The assessee filed an appeal against the order of the PCIT passed under Section 263 of the Income Tax Act, 1961. The PCIT had reopened the assessment and found the original assessment order erroneous and prejudicial to the revenue, alleging bogus accommodation entry of Rs. 33,94,991/- from M/s. Prerna Infrabuild Ltd.

Held

The Tribunal found no basis in the PCIT's order to conclude that the AO had failed to make necessary inquiries. The PCIT's order lacked discussion on the AO's inquiries and the assessee's replies, making it unsustainable in law.

Key Issues

Whether the PCIT's order under Section 263, finding the AO's assessment erroneous for not making additions based on alleged bogus accommodation entry, is sustainable in law without proper basis and discussion of inquiries made.

Sections Cited

263, 147

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Income Tax Appellate Tribunal, “A” BENCH, AHMEDABAD

Before: SHRI SANJAY GARG & SMT. ANNAPURNA GUPTA

For Appellant: Shri Vivek Chavda, Advocate, Shri Alpesh Parmar, CIT.DR

For Respondent: Shri Alpesh Parmar, CIT.DR

Hearing: 14/10/2025Pronounced: 29/10/2025

1.

The present appeal has been filed by the assessee against the order of the Ld. Principal Commissioner of Income Tax, PCIT, Ahmedabad-1, (hereinafter referred to as “PCIT”), dated 26.03.2025 passed under Section 263 of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) and relates to Assessment Year (A.Y.) 2018-19.

Vijaybhai Shah vs.PCIT] A.Y. 2018-19 - 2 – 2. The order of the Ld. PCIT reveals that he found the assessment order passed in the case of the assessee u/s.147 of the Act erroneous and causing prejudice to the Revenue for not having made any addition on account of bogus accommodation entry received by the assessee of Rs.33,94,991/- from M/s. Prerna Infrabuild Ltd. The Ld. PCIT noted that reopening in the case of the assessee was resorted to for the said purpose only i.e. because of information in the possession of the AO of the asssessee having received fictitious loan of Rs.33,94,991/- from M/s. Prerna Infrabuild Ltd., which was controlled and managed by one Shri Jignesh Shah an alleged accommodation Entry Operator. The Ld.PCIT noted that the AO completed assessment accepting the income returned by the assessee without making any addition of the alleged fictitious loan received by him. Therefore, he found the assessment order erroneous and prejudicial to the interest of the Revenue. The Ld. PCIT confronted the error so noted by him in the assessment order, to the assessee and after considering the reply filed by the assessee he held that the AO having not verified the assessee’s fictitious loan received from M/s. Prerna Infrabuild Ltd. the order passed was erroneous . That since the AO had passed the order without making proper examination of the issue for which it was reopened the same had resulted in loss to the Revenue. The Ld.PCIT set aside the assessment order passed u/s.147 of the Act directing the AO to pass fresh assessment order in accordance with law after duly examining the facts of the case to the extent of issues discussed in his order.

Vijaybhai Shah vs.PCIT] A.Y. 2018-19 - 3 – 3. On going through the order of the Ld. PCIT we find that there is no basis in the order for arriving at finding of error in the assessment order passed by the AO as noted above. The PCIT held that the AO failed to make necessary enquiries with respect to the issue for which reopening was resorted i.e. bogus accommodation entry of loan taken by the assessee from one M/s. Prerna Infrabuild Ltd., which was controlled and operated by one Mr. Jignesh Shah an alleged accommodation Entry Operator, but the entire order of the Ld. PCIT does not reveal as to how the AO failed to make necessary enquiries on the issue. There is no mention in the Ld.PCIT’s order of the inquiry actually made by the AO and how it was inadequate . The entire order only contains the information in the possession of the Department regarding Shri Jignesh Shah being subjected to search action revealing him to be an Accommodation Entry Operator. This entire discussion is mentioned in page nos.2 to 3 of the PCIT’s order. The PCIT notes that there was information that the assessee had also taken accommodation entry from an entity controlled by Mr. Jignesh Shah and same had not been offered to tax by the assessee. From there, the Ld. PCIT straight jumps to the finding that the AO has not considered this vital aspect and, therefore, his order is erroneous. As pointed out above, he has not given any basis for his finding that the AO has not considered the information in his possession. There is no discussion in the order of the queries raised by the AO and the reply filed by the assessee during assessment and as to how therefore, the AO failed to make inquiry in relation to vital and specific information that he had in Vijaybhai Shah vs.PCIT] A.Y. 2018-19 - 4 – his possession. Thereafter, pages nos. 4 to 16 of the order deal only with the judicial interpretation of the provisions of Section 263 of the Act and the Ld. PCIT thereafter concludes by holding that the assessment order passed in the present case is erroneous causing prejudice to the Revenue.