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Facts
The assessee appealed against an order by the PCIT under Section 263 of the Income Tax Act, 1961, for AY 2021-22. The PCIT had set aside the original assessment order for de-novo consideration of issues like warranty expenses, EMD, bad debts, royalty, commission expenses, and a penalty under Section 271B, citing prejudice to revenue. The assessee, however, failed to appear or make any submissions before the PCIT or the Tribunal.
Held
The Tribunal upheld the PCIT's order, finding no infirmity in it, given the assessee's repeated failure to present submissions or material in support of its claims during both the PCIT's proceedings and the appeal before the Tribunal. The PCIT's action to set aside the assessment for de-novo consideration was deemed justified.
Key Issues
Whether the PCIT's order under Section 263, setting aside the assessment for de-novo consideration of various expense claims and penalty proceedings, was valid, especially in light of the assessee's non-cooperation.
Sections Cited
Section 263 of the Income Tax Act, 1961, Section 271B of the Income Tax Act
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Income Tax Appellate Tribunal, “A” BENCH, PUNE
Before: SHRI R.K. PANDA & MS. ASTHA CHANDRA
Assessment Year : 2021-22 Mylab Discovery Solutions Private Limited, PCIT, Thane-1 Global Innovation Center Unit No. 501/502, 5th Floor, Amar Paradigm, Baner Gaon, Vs. Pune-411045 PAN : AAKCM3531H अपीलार्थी / Appellant प्रत्यर्थी / Respondent Assessee by : N O N E Department by : Shri Amol Khairnar Date of hearing : 17-12-2025 Date of 27-01-2026 Pronouncement : आदेश / ORDER
PER ASTHA CHANDRA, JM :
The appeal filed by the assessee is directed against the order dated 27.03.2025 of the Ld. Principal Commissioner of Income Tax, Thane-1 (“PCIT)” passed u/s 263 of the Income Tax Act, 1961 (the “Act”) pertaining to Assessment Year (“AY”) 2021-22.
The assessee has raised the following grounds of appeal :
1. Learned PCIT, Thane-1 has erred in law and on facts in passing the order u/s 263 of ITA, 1961 dated 27-03-2025 without considering the submission filed by the appellant which makes the proceeding as void.
2. Learned PCIT, Thane-1 has erred in law and on facts in setting aside the order dated 20-12-2022 w.r.t. the following issues- - Claim of warranty expenses - Claim of EMD expenditures - Claim of bad debts - Claim of Royalty expenses and Commission expenses - Issue of penalty proceeding u/s 271B Without considering the submission made by the appellant on the above issues.
3. The appellant craves leave to add, alter, clarify, explain, modify, delete any of the grounds of appeal, and to seek any just and fair relief.”
3. When the case was called for hearing on 17.12.2025, none appeared for and/or on behalf of the assessee and no adjournment application has been filed by the assessee. Even on the earlier dates fixed for hearing on 11.09.2025 and 20.11.2025, either the assessee or any Representative on its behalf failed to appear. The Ld. DR was, however, present on all the above dates of hearing. Under these circumstances, we deem it fit to adjudicate the appeal with the assistance of the Ld. DR and the material available on record.
The grounds of appeal
raised before us is against the action of Ld. PCIT in invoking the provisions of section 263 of the Act holding that the order passed by the Ld. Assessing Officer (“AO”) dated 20.12.2022 is erroneous in so far as it is prejudicial to the interest of the Revenue in respect of the various issues listed in ground No.
2. (reproduced above) of the assessee.
We have heard the Ld. DR. Perusal of the order of the Ld. PCIT, we find that the Ld. PCIT has set aside the assessment order to the file of the Ld. AO for de-novo consideration on the various issues listed in para 7 of the impugned order i.e. assessee’s claim of warranty expenses, EMD expenditure, bad debts and royalty and commission expenses after making necessary enquiries and verification with regard to the said issues. The Ld. PCIT completed the proceedings u/s 263 of the Act ex-parte qua the assessee on the basis of material available on record in view of the fact that no submissions have been made by the assessee in support of the issues raised by him. Even before us, the assessee has failed to make any submissions and to brought on record any material in support of its claim. We therefore do not find any infirmity in the order of the Ld. PCIT, which is hereby upheld. The grounds raised by the assessee are accordingly dismissed.
In the result, the appeal of the assessee is dismissed.