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Facts
The assessee filed returns for AYs 2013-14 and 2014-15, which were assessed. Subsequently, the AO re-opened cases under Section 147, issuing assessment orders. The PCIT invoked revisionary jurisdiction under Section 263, finding the assessment orders erroneous and prejudicial to revenue. The assessee appealed these revision orders.
Held
The Tribunal held that the assessee exhibited a non-compliant approach at both assessment and revision levels. Both the CIT(A) and PCIT had previously set aside the assessment orders and remanded the cases for de novo assessment. Therefore, the current appeals challenging the revision orders were found to be without merit.
Key Issues
Whether the revision orders passed by the PCIT under Section 263 were justified given the assessee's non-compliance and the prior remands by lower authorities? Whether the appeals are devoid of merit as the assessee failed to comply with notices and the impugned orders upheld previous remands?
Sections Cited
147, 144, 144B, 263, 148, 142(1), 251
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI B.M. BIYANI & SHRI PARESH M. JOSHI
आदेश/ O R D E R
Per B.M. Biyani, AM:
The captioned two (2) appeals are preferred by assessee assailing two separate orders of revision, both dated 01.03.2024 and both passed by Pr. Commissioner of Income-tax, Indore-1 [“PCIT”] u/s 263 of the Income-tax Act, 1961 [“the Act”], which in turn arise out of respective assessment- orders dated 22.09.2021 passed by NFAC, Income-tax Department [“AO”] u/s 147 r.w.s. 144 and 144B of the Act for Assessment-Years [“AY”] 2013- 14 and 2014-15.
Page 1 of 7 & 373/Ind/2024 AYs:2013-14 & 2014-15
The background facts leading to these matters are such that the assessee filed returns of AYs 2013-14 & 2014-15 which were assessed.
Subsequently, on the basis of certain information, the AO re-opened assessee’s cases u/s 147 and completed such re-opened assessments vide orders dated 22.09.2021. Thereafter, Ld. PCIT examined the records of assessment-proceedings and viewed that the assessment-orders dated 22.09.2021 passed by AO were erroneous in so far as they were prejudicial to the interest of revenue. Accordingly, the PCIT invoked revisionary- jurisdiction u/s 263 and finally passed revision-orders dated 01.03.2024 u/s 263. Aggrieved by such revision-orders, the assessee has come in these appeals before us.
Ld. AR for assessee/appellant submits that the underlying facts in both cases are identical. Therefore, these cases were heard together and being disposed of by this consolidated order. For convenience and brevity, we shall refer the facts of first appeal being of AY 2013-14 and the adjudication made by us shall apply to both appeals.
4. The grounds raised in are as under:
“1. That on the facts and circumstances of the case and in law, the Ld. Principal Commissioner of Income tax -I, Indore ["the PCIT"] erred in invoking provisions of section 263 of the Income Tax Act, 1961 ("the Act") and directing revision of the assessment order dated 22.09.21 passed u/s. 147 r.w.s 144 r.w.s 144B by the National Faceless Assessment Centre ("the NFAC ") 2. That on the facts and circumstances of the case and in law, the PCIT has erred in passing the order u/s. 263 on the alleged ground that the assessment order was erroneous and/or prejudicial to the interest of the revenue.
Page 2 of 7 & 373/Ind/2024 AYs:2013-14 & 2014-15
3. That on the facts and in the circumstances of the case and in law, the PCIT erred in setting aside the assessment order dated 22.09.21 passed by the NFAC by invoking the provision of section 263 of the Act.
That on the facts and circumstances of the case order passed by the PCIT is illegal, bad in law and without jurisdiction.
5. The appellant craves leave to add, amend, alter vary and or withdraw any or all the above grounds of appeal
.”
5. We have heard learned Representatives of both sides and carefully considered the documents held on record including the orders passed by lower-authorities.
6. At first, we extract Para No. 3 of impugned revision-order passed by Ld. PCIT for AY 2013-14:
3. The above notice was delivered on 22/01/2024 at 05:06:19 PM. However, in response to the aforesaid show cause notice, the assessee sought for an adjournment of three weeks i.e. 21 days on 29/01/2024. In view of the request of the assessee as well as keeping in view the principles of natural justice, this office waited for a response for more than 30 days, however, even after the passing of more than 30 days, the assessee didn't submit any reply on the merits of the case. Therefore, it can safely be concluded that he has nothing to say/furnish/explain in the matter and accordingly agrees with the view of this office.
Now, we re-produce the final para of impugned revision-order passed by Ld. PCIT for AY 2013-14:
“13. Therefore, in view of the above discussion, I am of the considered opinion that the assessment order dated 22/09/2021 for A.Y. 2013-14 is erroneous in so far as it is also prejudicial to the interest of revenue on account of passing of the assessment order without making required inquiries and verification, which should have been made. Accordingly, I am satisfied that provisions of section 263 of Income Tax Act 1961 are required to be invoked. Therefore, the assessment for A.Y. 2013-14 framed on 22/09/2021 is hereby set-aside to the file of AO to re-examine the issue and to make de-novo assessment, indicated in the preceding discussion, u/s 263 and passing an order as per the law after making necessary verification, inquiries and investigations. It would be not out of place to Page 3 of 7 & 373/Ind/2024 AYs:2013-14 & 2014-15 mention that the AO shall re-examine only the issue which has been indicated for further Investigation in the preceding discussion, after according due opportunities of being heard to the assessee.” [emphasis supplied] 8. Now, we also re-produce Para No. 4 & 5 of assessment-order dated 22.09.2021 passed by AO for AY 2013-14:
“3. However, neither the assessee complied with the said notice nor he furnished any details as called for vide the notice referred above. It is pertinent to mention here that the assessee was given ample opportunities during the course of assessment proceedings to furnish the details as called for. The opportunities provided to the assessee in the interest of natural justice, by way of issuing various notices during the course of assessment proceedings are illustrated as under:
Sr.No. Date of issue of notice issued u/s Remarks 1. 24.03.2020 148 no compliance 2. 05.02.2021 142(1) no compliance 3. 10.03.2021 142(1) no compliance 4. 22.03.2021 142(1) no compliance 5. 30.03.2021 142(1) no compliance 6. 30.07.2021 142(1) no compliance 7. 12.08.2020 Show cause notice no compliance u/s 144B(1)(xi)
Since the assessee did not comply to any of the notices issued, this office is left with no option other than completing the case as best judgment assessment u/s 144 of IT Act, 1961 based on the material available on record, However, he neither submitted any details nor filed return of income in response to the notice u/s. 148. There is no response to any of the notices. This shows non cooperative attitude on the part of the assessee in finalizing time barring assessment proceedings.”
Page 4 of 7 & 373/Ind/2024 AYs:2013-14 & 2014-15
It further emerged during hearing that the assessee filed first-appeals to CIT(A) against the assessment-orders dated 22.09.2021 passed by AO and the CIT(A) has recently, vide orders dated 04.07.2025, disposed of assessee’s first appeals. In these first-appeals, the assessee made following prayer to CIT(A):
Page No. 8 of CIT(A)’s order:
“HUMBLE PRAYER
In view of the above facts and circumstances, it is most respectfully prayed that Your Honour may kindly Set aside the ex-parte réassessment order dated 22.09.2021 passed under Section 147 read with Section 144 of the Income tax Act to the file of Assessing Officer for Fresh Assessment.
Respectfully submitted”
Ultimately, the CIT(A) passed following order:
“5.1 In the grounds of appeal raised appellant has challenged the validity of re-opening of assessment u/s 147 of the I.T. Act by issue of notice u/s 148 of the I.T. Act dated 24.03.2020 on various grounds. The appellant has further contended that during the assessment proceedings notices were sent electronically to the email address trgtinc@gmail.com which belonged to the appellant's former tax return preparer, who did not inform the appellant about any such notices and resultantly the appellant remained unaware of assessment proceedings and could not respond. It is the contention of the appellant that his PAN and identity documents were fraudulently misused to open a bank account and carry out bogus transactions. Appellant also filed copy of affidavit, FIR and News Articles in support. 5.2 Considering the above submission made by the appellant and considering the fact that the impugned assessment order has been passed by the AO ex- parte u/s 144 of the I.T. Act mainly for the reason that the appellant failed to respond to any of the statutory notices issued by the AO u/s 142(1) and show- cause notice, I am of the considered view that the nature and source of credits entries of Rs.2,35,13,000/-, need proper verification by the AOand accordingly compute taxable income of the appellant. The appellant should also get an opportunity to present his case and file written submission and necessary
Page 5 of 7 & 373/Ind/2024 AYs:2013-14 & 2014-15 documentary evidence to explain the nature and source of credits entries during the relevant previous year. 5.3 Therefore, in view of powers vested in the undersigned vide proviso under clause (a) of sub-section (1) of section 251 of the Act, in my considered opinion, it would meet the ends of justice if the assessment is set aside to the file of the A.O. to make a fresh assessment after offering sufficient and reasonable opportunity of being heard to appellant and after verification of the facts of the case and in the principle of law. The impugned assessment order passed by the A.O. is therefore set aside to the file of the A.O. to make the same de-novo.
In the result, the appeal is set aside.”
Thus, on perusal of various orders as narrated above, it emerges very clearly that the assessee did not comply with any of the seven (7) notices issued by AO u/s 148/142(1)/final show-cause notice during assessment- proceeding. Therefore, the AO passed ex-parte assessment-order u/s 144.
Further, during revision-proceeding, the assessee sought adjournment of three weeks (21 days) from PCIT but did not respond for more than 30 days.
Ultimately, the PCIT had to pass ex-parte revision-order. Thus, there is a non-compliant approach of assessee at both levels i.e. assessment as well as revision. It is also noteworthy that the assessee himself made a prayer to CIT(A), during first-appellate proceeding against assessment-order, for remand of case to the file of AO for fresh assessment and acting upon such prayer of assessee, the CIT(A) has set aside the assessment-order passed by AO and remanded matter to AO for making assessment de novo. In fact, the PCIT has also done same thing in revision-order i.e. the PCIT has set aside the assessment-order passed by AO and directed AO to make a de novo assessment after making necessary verification, inquiries and investigations.
Page 6 of 7 & 373/Ind/2024 AYs:2013-14 & 2014-15 Thus, the assessee’s case has been re-stored by both authorities, the CIT(A) as well as PCIT, to AO for de novo assessment. When it is so, we hardly find any grievance to assessee flowing from impugned orders of revision passed by Ld. PCIT. Accordingly, these appeals are devoid of any merit. We uphold the revision-orders being challenged by assessee in these appeals. All other pleadings made by Ld. AR are rejected. The assessee fails in these appeals.
Resultantly, these appeals are dismissed.
Order pronounced in open court on 08/07/2025