NAJMA,BUDAUN vs. PCIT, BAREILLY, BAREILLY

ITA 89/LKW/2022Status: DisposedITAT Lucknow13 February 2026Bench: SH. SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER AND SH. NIKHIL CHOUDHARY (Accountant Member)7 pages
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What did the Tribunal hold?

The Tribunal ruled that the PCIT's order under section 263 was invalid because the PCIT failed to specifically point out what inquiries the Assessing Officer ought to have conducted, as required by Explanation 2(a) to section 263. Without such specific guidance on the lack of enquiry or verification, the AO's order could not be deemed erroneous and prejudicial to the Revenue. The PCIT's order was therefore quashed.

What were the facts?

The assessee deposited Rs. 12.99 lakhs cash, leading to a reassessment under section 148. The AO made an ad hoc addition of Rs. 30,000, accepting the assessee's explanation that the cash was business turnover. The PCIT initiated revisionary proceedings under section 263, holding the AO's order erroneous and prejudicial for not properly enquiring into the cash deposit source, and set it aside for de novo assessment.

What were the issues?

Whether the PCIT's revisionary order under section 263 was valid when the PCIT did not explicitly state what further inquiries the Assessing Officer should have conducted regarding the cash deposits.

Which sections of the Income-tax Act were involved?

Section 263,Section 147,Section 143(3),Section 148

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, LUCKNOW ‘B’ BENCH, LUCKNOW

Hearing: 19.11.2025Pronounced: 13.02.2026

PER NIKHIL CHOUDHARY, A.M.: This is an appeal filed by the assessee against the order of the ld. PCIT, Bareilly under section 263 of the Income Tax Act on 22.03.2021 revising the order of the Assessing Officer passed under section 147 r.w.s. 143(3) of the Income Tax Act, 1961 on 30.06.2017. The grounds of appeal are as under:- “Grounds No.1 The Learned PCIT, Bareilly has erred in initiating and completing the revisionary proceedings u/s 263 of the Act in the hands of the assessee, and setting aside the case to the Assessing officer, with total disregard to the facts and circumstances of the case, and is untenable under the law.

Grounds No. 2 The Learned PCIT, Bareilly erred in setting aside the assessment made vide order under section 143(3)/147 da

The order continues below.

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