ANIL KUMAR BATAR,SIKAR vs. PCIT-JAIPUR-2, JAIPUR

ITA 418/JPR/2025Status: DisposedITAT Jaipur09 September 2025AY 2018-1939 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the order of the PCIT passed under section 263 was not in accordance with the provisions of the Act. The Tribunal found that the prerequisite for exercising jurisdiction under section 263 is that the AO's order must be established to be both erroneous and prejudicial to the interest of the revenue. In this case, the PCIT had not pinpointed any specific aspect where the AO's enquiry was lacking, nor was any defect found in the record collected by the AO. The Tribunal noted that the AO had incorporated the details of the enquiry conducted in the assessment order, and the revenue had not pointed out any error. The Tribunal relied on the Supreme Court's decision in Malabar Industrial Co. Ltd. vs. CIT, stating that every loss of revenue does not automatically mean the order is prejudicial to the revenue, especially when the AO has taken a possible view permissible in law. Therefore, the Tribunal set aside the order of the PCIT and restored the order passed by the AO.

What were the facts?

The assessee, Sh. Anil Kumar Batar, filed his income tax return for Assessment Year 2018-19 declaring an income of Rs. 19,89,250/-. The assessment was completed under section 147 read with section 144B on March 18, 2023. The Principal Commissioner of Income Tax (PCIT)-2, Jaipur, initiated proceedings under section 263, alleging that the Assessing Officer (AO) failed to verify a cash transaction of Rs. 75,00,000/- received as advance for building construction from M/s. Matrix JEE Academy. The PCIT found the assessment order erroneous and prejudicial to the interest of revenue, directing the AO to make a fresh assessment. The assessee appealed this revision order.

What were the issues?

1. Whether the impugned order passed by the PCIT under section 263 of the Income Tax Act, 1961, and the notice issued thereunder are bad in law and on facts, and thus liable to be quashed? (Question of law) 2. Whether the PCIT erred in invoking section 263 of the Act on the allegation that the AO failed to verify the cash transaction of Rs. 75,00,000/- received as advance for building construction from Matrix JEE Academy, considering that the AO had examined this issue during the reassessment proceedings under section 147/148? (Question of mixed law and fact) Assessee's Contentions: - The PCIT's action under section 263 is bad in law and without jurisdiction as the AO had already examined the issue of cash receipt of Rs. 75,00,000/- during the reassessment proceedings under section 147/148 and had applied his mind. - The assessee had clarified that he had not received any such advance cash receipt of Rs. 75,00,000/- from M/s. Matrix JEE Academy, Sikar, but rather received rental income. - The faceless assessment was completed after full examination and inquiry, and the AO had considered all material facts. - The twin conditions for invoking section 263 (erroneous order and prejudicial to revenue) are not fulfilled. Revenue's Contentions: The judgment does not explicitly record the revenue's contentions, but it is implied that the revenue supported the PCIT's finding that the AO failed to verify the transaction.

Which sections of the Income-tax Act were involved?

Section 263,Section 147,Section 144B,Section 143(3),Section 148,Section 142(1),Section 148A

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Income Tax Appellate Tribunal, JAIPUR BENCHES, B JAIPUR

Before: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM

For Appellant: Shri Shrawan Kumar Gupta, Adv. &, Shri S.L. Jain, Adv
For Respondent: Shri Gorav Avasthi, JCIT-DR
Hearing: 21/07/2025Pronounced: 09/09/2025

PER DR. S. SEETHALAKSHMI, J.M. This appeal by the assessee is directed against the revision order dated 10.03.2025 passed by the ld. Principal CIT-2, Jaipur under section 263 of the IT Act for the assessment year 2018-19. 2. The assessee has raised the following grounds of appeal :- "

1.

That the impugned order u/s 263 of the Act dated 10.03.2025 and notice u/s 263 are bad in law and on facts of the case

The order continues below.

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