NEW DELHI U.P ROAD CARRIERS PRIVATE LIMITED,NEW DELHI vs. ASSESSMENT UNIT, INCOME TAX DEPARTMENT, DELHI

Appellant by Ms. Monika Ghai, Adv. & Sh. Sharad Aggarwal, Adv. Respondent by Ms. Pooja Swaroop, CIT(DR) 03/2/2026 Date of hearing: 11/2/2026 Date of Pronouncement: ORDER

PER SUDHIR KUMAR, JM:

1. That on the fact and circumstances of the case and in law, the PCIT has erred in initiating proceedings u/s. 263 of the Act by wrongly 1 assuming jurisdiction u/s. 263 hence the order passed by PCIT u/s. 263 of the Act is bad in law and void ab initio.

2. Without prejudice to the above ground, on the facts and circumstances of the case and in law, the PCIT has erred in assuming jurisdiction and passing the revisionary order u/s. 263 of the Act inspite of proper verification of documents which were sought from the appellant and accordingly, AO took a permissible view. The order passed by the AO is neither erroneous nor prejudicial to the interest of revenue, hence, the order of PCIT should be set aside.

4. The PCIT ought to have seen that while invoking power under revisionary jurisdiction as envisaged u/s. 263 is not permissible under law to substitute the view of the AO by the view of the PCIT.

5. That on the facts and in the circumstances of the vase, the PCIT has erred in law and on facts in alleging that there is no whisper regarding the Directors of the company whose registration was cancelled by the Ministry of Corporate Affairs and that the same remained unverified / unexamined during the course of assessment were duly furnished and considered by the AO during the original assessment proceedings.

6. That on the facts and circumstances of the case, the PCIT Delhi has erred in law and on facts in alleging that the expenditure of Rs. 27,20,11,899/- against a turnover of Rs. 28,91,04,467/- incurred during the year under consideration included payments to certain entities that were not registered under GST and that the same remained unverified and unexamined during the assessment proceedings. 3. Brief facts of the case are that the assessee company filed its return for the AY 2022-23 on 22.10.2022, admitting total income of Rs. 88,74,280/-. The case was selected for scrutiny assessment through CASS for the following reasons: i. Large value receipt or repayment of loans other than through banking channels. ii. Directors in the company are either directors in a company whose registration have been cancelled by MCA also or are of low means. 3.1 Thereafter, the assessment was finalized under section 143(3) read with section 144B of the Income Tax Act, 1961 on 23.2.2024, accepting the return of income of Rs. 88,74,280/-. Ld. PCIT on perusal of the assessment record, has observed that that assessee had shown total turnover of Rs. 28,91,04,467/- whereas freight and labour expenses claimed at Rs. 27,20,11,899/-. During the course of assessment proceedings the AO has not examined the genuineness of these expenses. On perusal of the assessment record, it was further observed that the AO had not made any enquiry/ verification on the above issue. The FAO even did not ask details from the assessee regarding expenditure of Rs. 27,20,11,899/- relating to entities not registered under GST. The assessee had shown total turnover of Rs. 28,91,04,467/-. No details relating to list of such entities with name, PAN, address and amount paid mode of payment were called for to verify the genuineness of such expenditure by issuing 133(6) of the Act to such entities before passing the final order. He further observed that the aforesaid order is without making inquiries or verification which should have been made, therefore, primafacie, erroneous in so far as it is prejudicial to the interest of revenue.

Therefore, he issued show cause notice for initiation of proceedings u/s. 263 of the Act and in response to the same, assessee filed its detailed reply, which was duly considered by the PCIT and he observed that assessment order dated 23.2.2024 by the AO is erroneous in so far as prejudicial to the interest of the revenue, therefore, the same was set aside on the issue of expenditure incurred of Rs. 27,20,11,899/- and also for making an enquiry with the MCA, with the direction to AO to provide opportunity of being heard to the assessee before finalizing the assessment order. Against the above, assessee is in appeal before us.