RAVINDRA DHAKA,GURGAON vs. PCIT, FARIDABAD

The present appeal is filed by assessee against the order dated 28.03.2025 by Ld. Pr. Commissioner of Income Tax, Faridabad [“Ld. PCIT”] passed u/s 263 of the Income Tax Act, 1961 [“the Act”] pertaining to Assessment Year 2020-21.

Brief facts of the case are that the assessee is an individual and filed his return of income, declaring total income at INR 27,12,580/-. The case was selected for limited scrutiny and during the course of assessment proceedings, the Faceless AO asked the JAO to provide legible copies of the documents relied upon by the Investigation Wing to allege that assessee has made cash payment of INR 44,68,000/- [wrongly mentioned as INR 48,64,000/-] in acquisition of property. However, as the legible copy could not be provided therefore, Faceless AO has passed the assessment order u/s 143(3) accepting the income as declared by the assessee. Thereafter, Ld. PCIT in terms of notice issued u/s 263 dated 15.01.2025 initiated the proceedings u/s 263 by holding the assessment order as erroneous and pre-judication to the interest of Revenue as no enquiry or investigation was carried out nor any additions with respect to the cash payment made on the purchase of property was made in the hands of the assessee.

Against the said order, assessee filed an appeal before the Tribunal by taking following grounds of appeal:-

Before us, in support of all the grounds of appeal, ld.AR for the assessee submits that assessment in the case of assessee was completed u/s 143(3) wherein addition was proposed on the basis of documents found and seized during the course of search however, as neither the copy of the documents seized during the survey containing the notings of cash payment was provided nor any opportunity to cross-examine the witnesses was provided. Ld. further, submitted that a search in the case of M/s. Sweta Group of cases were carried put where the alleged documents were found and seized, and since the search was carried out prior to 01.04.2021, therefore, proceedings in the case of the assessee should have been initiated u/s 153C of the Act. Regarding enquires, ld. AR submits that FAO requested the JAO to provide assessee the legible copies of the documents and also provide an opportunity to cross examine the witness however, when the AJO has failed to do so, the assessment order was passed by accepting the income declared by the assessee. Thus, as per ld. AR the assessment order so passed is neither erroneous nor prejudicial to the interest of revenue and requested that the same be quashed.

Heard the contentions of both parties and perused the material available on record. In the present case, from the grounds of appeal taken before us, it is observed that assessee has not challenged the legality of the assessment order passed u/s 143(3) of the Act. Further, it is further observed that no proper enquiries or investigation was made before passing the assessment order. The AO should have made independent inquiry/verification with respect to the alleged cash payment of INR 44,68,000/- made by the assessee for the purchase of property more particularly when the Faceless AO had specifically asked the Jurisdictional AO to provide the legible copies of all the material supplied by the Investigation Wing. Under these circumstances, in our considered opinion, the assessment order so passed, is without proper investigation and inquiries on the material available on record in the shape of the report of the Investigation Wing, suggesting that cash payment was made by the assessee for acquisition of the property. Accordingly, we find no error in the order of Ld. PCIT in directing the AO to pass the assessment order afresh after making inquiry/verification of the records available with respect to cash payment made by the assessee. Accordingly, all Grounds of appeal raised by the assessee are dismissed.

In the result, the appeal of the assessee is dismissed. Order pronounced in the open Court on 06.02.2026.