MEDHAVI JAIN,HARYANA V. PR,CIT DELHI-7, DELHI

ITA 1335/DEL/2024

AI Insights

The case revolves around the revisional powers of the Pr. CIT under section 263 of the Income Tax Act, 1961, concerning the reassessment order for the assessment year 2016-17. The assessee, Medhavi Jain, had declared a Long Term Capital Gain (LTCG) on the sale of shares, which was accepted as exempt income under section 10(38) of the Act. The reassessment was initially triggered by allegations of trading in penny stocks and non-genuine transactions. However, the Assessing Officer, after detailed inquiries, accepted the assessee's position. The Pr. CIT later set aside this reassessment order, leading to the current appeal. The Tribunal's decision emphasized the need for a clear demonstration of an order being erroneous and prejudicial to the revenue's interest for section 263 to be applicable.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 295365 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2016-2017
• Other Referred Cases: Zile Singh vs. Pr. CIT ITA no. 6863/Del/2019
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BALJEET KAUR
• Assessee Lawyers: VED JAIN; AMAN GARG
• Keywords: Set aside; Opportunity of being heard; Reassessment proceedings; Corroborative evidences; Income from undisclosed sources; Capital Gains; Third party statement; Wrong claim; Earning of tax free income; Assessment record; Revision of order; Opportunity of cross examination; Tangible material; Bogus
• Section: 147; 144; 263; 13

Judgement Text

"1 | P a g e IN THE INCOME TAX APPELLATE TRIBUNAL DELHI “E” BENCH: NEW DELHI BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI SUDHIR PAREEK, JUDICIAL MEMBER ITA No.1335/Del/2024 [Assessment Year : 2016-17] Medhavi Jain Khasra No.418, Avenue One Westend Green Mahipalpur New Delhi-110037 PAN-ADKPJ3845R vs Pr. CIT Delhi-7 APPELLANT RESPONDENT Appellant by Shri Ved Jain, Adv. & Shri Aman Garg, CA Respondent by Ms. Baljeet Kaur, CIT DR Date of Hearing 24.02.2025 Date of Pronouncement 25.04.2025 ORDER PER PRADIP KUMAR KEDIA, AM : The captioned appeal has been filed at the instance of the assessee seeking to assail the revisional order dated 26.02.2024 passed by Pr. Commissioner of Income Tax, Delhi [“Pr. CIT(A)”] under s. 263 of the Income Tax Act, 1961 [“the Act”] whereby the assessment order dated 30.03.2022 passed under s. 147 r.w.s. 144 r.w.s 144B of the Act pertaining to assessment year 2016-17 was sought to be set aside for denovo assessment in terms of supervisory jurisdiction. 2. The assessee has raised following grounds of appeal:- 1. “On the basis of facts and circumstances of the case, the order passed by the learned Principal Commissioner of Income Tax, Delhi-7 (hereinafter, referred as \"PCIT\") under section 263 of the Income Tax Act, 1961 (hereinafter, referred as \"the Act\") is bad both in the eye of law and facts. 2. On the basis of facts and circumstances of the case, the order passed u/s 263 by learned PCIT setting aside the assessment order ITA No.1335/Del/2024 2 | P a g e passed under section 147 r.w.s 148 of the Act by the Income Tax Officer, National Faceless Assessment Centre (\"AO\") holding that the same as erroneous and prejudicial to the interest of the revenue, is void-ab-initio. 3. On the facts and circumstances of the case, the revision order passed under section 263 of the Act by the learned PCIT setting aside the assessment order passed by the AO is illegal and invalid as the assessment order is neither 'erroneous' nor 'prejudicial to the interest of the revenue'. 4. On the facts and circumstances of the case, the learned PCIT has erred both on facts and in law in passing the order rejecting the contention of the assessee that the assessment order passed by the AO do not fall within the requirements of Explanation 2 to Section 263 of the Act and hence said order cannot be deemed to be erroneous so far as it is prejudicial to the interest of the revenue. 5. (i) On the facts and circumstances of the case, the learned PCIT has erred both on facts and in law in setting aside the order passed by the AO, without himself conducting the necessary enquiry alleged to have not been done by the AO during the course of assessment proceedings. (ii) That the PCIT has erred in ignoring the settled position of law that where PCIT is of the view that the AO did not undertake any inquiry, it becomes incumbent on the PCIT to conduct such inquiry. 6.(i) On the facts and circumstances of the case, the learned PCIT has erred both on facts and in law in passing an order under section 263 of the Act solely for the purpose of substituting his own opinion on the concerned issues in place of the view adopted by the learned AO after independent application of mind. (ii) That the above action of the PCIT is bad in the eye of law and facts ignoring the settled law that where the issues concerned are debatable issue or where two views are possible and the AO has taken one view which the PCIT does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the Revenue. 7. On the basis of the facts and circumstances of the case, the Learned PCIT has erred in exercising jurisdiction under section 263 of the Act in setting aside the issue of long-term capital gain accrued on sale of shares which was duly scrutinized by the Assessing Officer while passing the assessment order u/s 147 r.w.s 144B of the Act. 8. On the facts and circumstances of the case, the learned PCIT has erred both on facts and in law in setting aside the assessment order, ignoring the settled law that the long-term capital gain accrued on sale of shares on which STT is paid is exempt u/s 10(38) of the Act. 9. On the facts and circumstances of the case, the action of the learned PCIT in passing the order exceeding his jurisdiction and setting aside the ITA No.1335/Del/2024 3 | P a g e assessment order to the file of AO for making the de-novo assessment is invalid, illegal and unsustainable.” 3. As per the grounds of appeal, the assessee has sought to challenge the jurisdiction assumed by the Pr.CIT under s. 263 of the Act and as a corollary, sought to impugn the revisional order passed by the Pr.CIT under s. 263 of the Act as ex-proprietary. 4. Briefly stated, the assessee filed her return of income for AY 2016-17 declaring total income at INR 36,59,450/-. As per the return of income, the assessee also declared Long Term Capital Gain (LTCG) of INR 1,64,30,419/- on sale of shares as exempt income under s. 10(38) of the Act. The concluded assessment was however, re-opened under s. 148 r.w.s. 147 of the Act on the ground that based on certain information disseminated to the AO by the other wing of the deptt., the assessee has allegedly traded in penny stock and the name of the assessee figures in the beneficiary list of Yamini Investment Company Limited (“YICL”) Scrip. The transactions entered into by the assessee were thus perceived to be non-genuine and alleged to facilitate introduction of non-accounted income of the assessee in the form of exempt capital gains in the books of the assessee. Based on such belief entertained, the AO alleged that the chargeable income has escaped assessment while recording reasons under s. 148(2) of the Act. Pursuant to formation of belief towards escapement of income, the AO issued notice under s. 148 of the Act and assumed jurisdiction under s. 147 of the Act to examine the issue. The re-assessment order was consequently framed under s. 147 of the Act vide order dated 30.03.2022 wherein however, the return of income was accepted by the AO without any adjustment. The stand of the assessee on LTCG claimed being exempt from taxation was accepted by the AO in the reassessment order. The AO while framing the re-assessment order, inter alia observed that various documents, details and evidences were called for and the assessee, in turn, uploaded the details, explanation and evidences in response to queries raised ITA No.1335/Del/2024 4 | P a g e during re-assessment proceedings. Thus, after making some enquiries on the claim of LTCG in the course of reassessment proceedings, no additions were eventually made despite allegation of assessee company being beneficiary of unaccounted income received in the form of LTCG in the reasons recorded. 5. Thereafter, the Pr.CIT in exercise of revisionary powers, issued show cause notice dated 28.12.2023 under s. 263 of the Act requiring the assessee to show cause as to why the re-assessment order so framed under s. 147 r.w.s. 144B of the Act should not be modified/set aside on the ground that such order of the AO is erroneous and pre-judicial to the interest of the Revenue. 6. As per the show cause notice, the Pr.CIT, in essence, alleged that re- assessment order suffers from non-application of mind and was rendered without proper enquiries and verification of crucial facts required while discharging its statutory functions. The Pr.CIT alleged that the re-assessment order was passed in an stereo-typed manner without examining the genuineness of the claim of the assessee towards LTCG shown as exempt income under s. 10(38) of the Act and without conducting proper enquiry or verification which should have been made in the context of the case. 7. In response to the show cause notice served in the course of hearing in the revisional proceedings, the assessee vociferously contested the correctness of assumption of revisional jurisdiction and contended that specific enquiries were made by the AO on the issue for which reasons were recorded under s. 148(2) of the Act. The assessee pointed out that in the course of assessment proceedings, the relevant documents such as Demat account, the copy of transactions statement, details of STT paid, copy of bank statements, details of investment alongwith date of purchase and sale of calculation of capital gains etc. were furnished to the satisfaction of the AO. The statement of the account with the broker evidencing payment of STT was duly provided. It was pointed out that the case of the assessee was re-opened with a pointed purpose of examining the bonafides of the claim of exempt income and the AO has specifically recorded his affirmative satisfaction to the evidences placed and ITA No.1335/Del/2024 5 | P a g e reasoning offered by the assessee. Hence, in the background of the enquiries made, one cannot say that the AO has not applied his mind and wisdom to the issues in question or has failed to take a benign view in the mater. 8. In the revisional proceedings, the assessee also reiterated that she has initially purchased 4 Lakh shares of Fidelo Power and Infrastructure Ltd. (FPIL) on 20.02.2012 in the FY 2011-12 directly from the company for a total purchase consideration of INR 40 Lakhs. The payment towards such purchases was made through banking channels. The shares were dematerialized and credited to the Demat account of the assessee on 29.03.2012. Later on, 4 Lakh shares held by the assessee were split up into 40 Lakh shares of INR 1/-each. Subsequently, Fidelo Power and Infrastructure Ltd. entered into scheme of arrangement according to which the company was amalgamated with YICL. Consequent to the scheme of arrangement, the assessee was allotted 32 Lakh shares of YICL in exchange of the share of Fidelo Power and Infrastructure Ltd. Subsequent to the amalgamation, the assessee decided to liquidate her shares and as a consequent of sale of YICL shares on the platform of the exchange, the assessee derived LTCG of INR 1,64,30,419/- in the FY 2015-16 relevant to AY 2016-17 after paying STT due on sale consideration. Thus, shares were sold through recognized stock exchange as per the market price prevailing in the exchange after holding the shares for nearly three years prior to sale for which sale proceeds were credited in the bank account. The transactions are duly backed by documentary evidences. 9. The Pr.CIT however, essentially observed that the assessment order has been passed mechanically and the AO accepted the LTCG claimed as exempt without carrying any worthwhile enquiry. While coming to such conclusion, the Pr.CIT in para 6 of the revisional order inter-alia observed that (i) in the allotment advice issued by Fidelo Power and Infrastructure Ltd. dated 24.02.2012, the mode of payment for purchase of shares are not apparent (ii) copy of bank statement filed by the assessee in the re-assessment proceedings showing payment against allotment of shares in FY 2011-12 provides only ITA No.1335/Del/2024 6 | P a g e bank account number without revealing the name of the bank and (iii) in the revisional proceedings also, the assessee has only provided the details of cheque number for payment of purchase consideration but has again skipped the name of the bank through which the payments were made for purchase of shares. 10. In such backdrop, the Pr.CIT remarked that the AO has perfunctorily accepted the alleged transactions regarding purchase of shares from Fidelo Power and Infrastructure Ltd. without bringing on record the name of the bank through which the payment was made. The Pr.CIT thus alleged that the AO has routinely accepted the explanation filed by the assessee regarding the purchase of shares at face value without conducting any enquiry or verification regarding the investment made by the assessee for purchase of shares which resulted in tax exempt income. The Pr.CIT thus invoked the revisional powers vested under s. 263 of the Act r.w.Explanation-2 appended thereto and set aside the re-assessment order with direction to the AO to frame such order afresh after conducting requisite enquiries on the pertaining issue involved. 11. Aggrieved, the assessee is in appeal before the Tribunal. 12. The Ld. Counsel for the assessee, Shri Ved Jain, Advocate, assailed the impugned revisional order and submitted at the outset that the necessary background for exercise of revisional powers of Pr.CIT do not exist in the present case. The Ld. Counsel submitted that the return was filed declaring income correctly in accordance with law as incumbent upon the assessee. The return so filed was subsequently re-opened purportedly guided by certain reports received qua the alleged penny stock of YICL. However, after proper enquiry and after proper collation of documentary evidences, the AO found himself satisfied with the bonafides of the transactions resulting in exempt LTCG claimed on sale of shares and thus agreed with the claim of the assessee. 12.1 The Ld. Counsel asserted that in response to specific queries raised in the re-assessment proceedings, the complete facts in relation to income derived ITA No.1335/Del/2024 7 | P a g e from sale of shares and claimed as exempt income under s. 10(38) of the Act was brought to the notice of the AO and therefore, the Revisional Commissioner mis-directed himself in law and on facts in alleging reassessment order to be erroneous on account of inadequacy in enquiry or lack of application of mind on the part of the AO towards eligibility of exemption claimed under s. 10(38) of the Act. 12.2 It was next observed that the Pr.CIT has set aside the re-assessment order based on frivolous allegations such as mode of payment is not apparent in the allotment advice which information is otherwise not embedded in allotment advices. The Pr.CIT alleged that while the bank account no. has been given, the bank name has not been mentioned either in the re-assessment proceedings or in the revisional proceedings. The information on payments through banking channel is thus alleged to be incomplete. To counter such observation, the Ld. Counsel for the assessee submitted that the bank account number was admittedly available before the AO. Noticeably, the bank account number and the name of Bank both are mentioned in the ROI itself and there was no suppression of any information. These facts belies the allegations made in the revisionsal order. Otherwise also, the Pr. CIT could have easily asked for such information in the course of revisional proceedings. 12.3 Be that as it may, the allegation towards absence of proper enquiry is founded upon information in connection with payments at the time of acquisition/purchase of shares which happened in FY 2011-12 relevant to AY 2012-13. The payment was made through banking channel as demonstrable from the material available on record and occurred nearly three years back. Thus, the nature of enquiry, which ought to have been made in the context of the case, has not been explained by the Pr.CIT while exercising drastic powers conferred under s. 263 of the Act. The allegation that proper enquiries have not been carried out in terms of Explanation-2 to s. 263 is clearly insipid, bald and casual. ITA No.1335/Del/2024 8 | P a g e 12.4 The Ld. Counsel next pointed out that the instant case was re-opened on the grounds of capital gains arising in purported penny stock. Specific questionnaires were issued and evidences were collected by the AO in the course of re-assessment. The case of the PCIT is merely inadequacy in the extent of enquiry. Thus, notwithstanding the fact that all relevant facts were placed before the AO, a distinction between a case of complete ‘lack of enquiry’ per se vis a vis a case of ‘inadequate enquiry’ from the point of view of Pr.CIT need to be borne out. The Explanation-2 does not give unfettered powers to Pr.CIT to invoke jurisdiction under s. 263 to correct each and every type of ordinary mistake. In the circumstances of alleged inadequacy of enquiry, the Pr.CIT is expected to exert himself and make at least some preliminary enquiry himself and come to a definite conclusion instead of flippantly remitting the matter back to AO to start the proceedings afresh casting enormous burden on a taxpayer. 12.5 The Ld. Counsel for the assessee thus submitted that the AO in the instant case has taken a plausible view on the claims made after relevant enquiries and having regard to corroborative evidences and in the absence of any definite material adverse to the assessee, the claim towards LTCG has been rightly accepted. Such re-assessment order passed cannot be made susceptible to the revisional proceedings under s. 263 of the Act by capricious exercise of jurisdiction. 12.6 It was further pointed out that the concluded assessment was itself re- opened is founded upon a very vague and non-descript reasons without reference to any actionable or definite material. The reassessment order under revision itself is plagued with incorrigible jurisdictional defects of fundamental nature and the exercise of powers under s. 263 to disturb and redo such re- assessment arising from unfounded reasons only seeks to inflict double whammy on the assessee. 12.7 The Ld. Counsel for the assessee next submitted that while the onus which lay on the Revenue while casting aspersions on the bonafides of the ITA No.1335/Del/2024 9 | P a g e LTCG derived has not been discharged, the Stock Exchange Board of India (SEBI) Report dated 04.09.2023 in the matter of YICL being placed before the Tribunal would be relevant to take cognizance of. The Ld. Counsel for the assessee submitted that owing to unusual fluctuations in the price and volume in the scrip, enquiries were conducted by the SEBI. However, the name of the assessee do not figure either in the list of notices issued by SEBI or anywhere in the report as a wrongful beneficiary of the price fluctuation. No material has come to surface which may show involvement of assessee acting in concert in any manner to obtain any unlawful gains in the scrip. Besides, the scrip was held for long period i.e. 3 years before sale and thus no price abuse can be reasonably attributed to such investors. These pertinent facts could have been easily enquired by the Pr.CIT. 12.8 To expand further, the Ld. Counsel finally submitted that it is not the objective of s. 263 of the Act to interfere with the order of the AO in each and every type of situation where the enquiry was not made in the manner expected by the Revisional Commissioner from a perfectionist point of view. It was contended that the quasi judicial action of the AO cannot be lightly struck down without showing it to be erroneous as well as prejudicial to the interest of revenue. The AO has concluded the issue having regard to the totality of facts and based on tangible material and thus cannot be branded as erroneous in the name of alleged inadequacy of inquiry. 12.9 The Ld. Counsel for the assessee thus urged that the revisional order passed on wrongful assumption of jurisdiction under s. 263 of the Act requires to be quashed. 13. The Ld.CIT DR for the Revenue on the other hand, relied upon the revisional order and submitted that when all the allegations made in the revisional order are integrated with underlying facts, the conclusion of erroneous re-assessment order would be inescapable. The Ld.CIT DR also submitted that the Pr.CIT has merely set aside the re-assessment order for framing fresh assessment after due diligence and taking note of the factual ITA No.1335/Del/2024 10 | P a g e aspects. The action of Pr.CIT is thus justified in terms of Explanation-2 to s. 263 of the Act. A reference was made to the decision of the co-ordinate bench in the case of Zile Singh vs. Pr. CIT ITA no. 6863/Del/2019 order dated 21/08/2020 to lend support the revisional action. The Ld.CIT DR also observed that raising questions in the form of wrongful assumption of jurisdiction under s. 147 of the Act in 263 proceedings is outside the bounds of law and cannot be legally entertained such different proceeding. 14. We have carefully considered the rival submissions on challenge to assumption of revisional jurisdiction and perused the revisional order passed by the Pr.CIT under s. 263 of the Act in this regard. While it is the case of the assessee that revisional jurisdiction exercised by the Pr.CIT is unsustainable in law, the revenue seeks to contend that impugned reassessment order has been passed without proper enquiry and thus such order is of no moment and thus rightly set aside for fresh determination of chargeable income. 15. Supervisory jurisdiction vested under Section 263 of the Act enables the concerned Pr.CIT/CIT to review the records of any proceedings and order passed therein by the AO. It empowers the Revisional Commissioner concerned to call for and examine the records of another proceeding under the Act and if he considers that any order passed therein by the AO is erroneous in so far as it is prejudicial to the interest of the Revenue, then he may (after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary), pass such order thereon as the circumstances of the case justify, including the order enhancing or modifying the assessment or cancelling the assessment and directing afresh assessment. Thus, the revisional powers conferred on the Pr.CIT/CIT under s.263 of the Act are of wide amplitude with a view to address the revenue risks which however need to be objectively justifiable. 16. In the facts and circumstances of the case, the substantive issue that emerges for adjudication is whether the Pr.CIT under the umbrella of revisionary powers is entitled to upset the finality of assessment proceedings ITA No.1335/Del/2024 11 | P a g e completed before the AO where the AO has allegedly committed error in passing such order without proper enquiry on the bonafides of LTCG claimed as exempt under s. 10(38) of the Act. Implicit in the question is the scope of powers of Revisional Commissioner in the event of alleged inadequacy of enquiry into various aspects of an issue. 17. The Pr CIT in the instant case issued show cause notice dated 28.12.2023 alleging that no proper inquiry has been made by the AO. In response thereto, the assessee filed replies and documentary evidences. However the Pr. CIT set aside the reassessment order passed by the AO for reasons noted hereunder:- 6. “I have perused the assessment records, the assessment order and submissions of the assessee. I am satisfied that the order passed by the Assessing Officer is erroneous in so far as it is prejudicial to the interest of the revenue for the following reasons:- (i) As per the copy of allotment advice issue by M/s Fidelo Power and Infrastructure Limited dated 24.02.2012, it is stated as under: \"This is to inform you that 4,00,000 shares have been allotted on dated 20.02.2012 and the same has been credited in your Demat Account No. 1203460000389447 with CDSL against the share application money of Rs. 40,00,000 paid by you.” It is noteworthy that the details of mode of payment for purchase of shares are not apparent in the allotment advice. (ii) During the assessment proceedings vide reply dated 26.03.2022, copy of bank statement from which the amount was paid for allotment of shares in F.Y. 2011-12, was attached as Annexure -2. As per the bank account no.1120000100162383, bank name not mentioned. (iii) In response to notice issued u/s 263, it is stated that payment for purchase of shares was made vide cheque no. 679261 for a sum of Rs.40,00,000/-. The assessee has again skipped the name of the bank through the payment was made for purchase of shares. Thus it is noted that the assessing officer has accepted the alleged transaction regarding purchase of shares from M/s Fidelo Power and Infrastructure Limited even without bringing on record the name of the bank through which payment was made. The explanation filed by the assessee before the assessing officer regarding purchase of shares has been accepted by the Assessing ITA No.1335/Del/2024 12 | P a g e officer at face value without conducting any enquiry or verification regarding investment made by the assessee for purchase of shares which has subsequently yielded tax exempt income of Rs. 1,64,30,419/-. Therefore as per Explanation-2 to section 263 (1) of the I.T. Act 1961, the order passed by the assessing officer shall be deemed to be erroneous in so far as it is prejudicial to the interests of the revenue. 7. Thus, the order passed by the assessing officer is without due consideration of the facts and is erroneous and prejudicial to the interest of revenue. Therefore, the assessment order dated 30.03.2022 passed by the assessing officer is set-aside and the assessing officer is directed to pass fresh assessment order after conducting due enquiry and providing adequate opportunity of hearing to the assessee.” 18. On perusal of the revisional order, we notice that the Pr.CIT is essentially dis-satisfied with the degree of enquiry made in respect of the LTCG claimed by the assessee. The solitary premise to displace the completed re-assessment is inadequacy in enquiry on LTCG claimed. As vociferously pointed on behalf of the assessee, the Pr.CIT has set aside the re-assessment order primarily on the ground that name of the bank through which the payment has been made, did not surface in the course of re-assessment proceedings or in the course of revisional proceedings. Such allegation is prima-facie found incorrect. The account no. has been admittedly provided and discernible from the revisional order as well as the bank statement. The account no. so mentioned exactly matches with the return of income where the name of the bank is mentioned. Besides, we are unable to see any purport inadequacy of such allegation. Furthermore, the payments have been made in the FY 2011-12 relevant to AY 2012-13 whereas the sale has occurred in AY 2016-17. Thus, the purchase stood accepted in the earlier years. The share were credited in the Demat account in AY 2012-13 and thereafter, also undergone corporate restructuring and amalgamation. Thus, the sale has been booked after a considerable gap and corroborated by tangible evidences such as Demat transactions, banking transactions, STT paid and contract note etc. Neither any adverse material was brought on record in the re-assessment proceedings nor any adverse material was pointed out in the reasons recorded to allege accommodation ITA No.1335/Del/2024 13 | P a g e entry or bogus transactions of LTCG. It is incumbent upon the AO to demonstrate that the assessee acted in concert in any manner in any dubious scheme giving rise to bogus claim of s. 10(38) of the Act. The onus is on the AO to bring on record some tangible material to allege existence of accommodation entry in the form of LTCG to cast aspersions on the credibility of the claim. In the instant case, the AO did conduct enquiry and based on appraisal of documentary evidences such as contract notes, Demat statement, bank payments etc. the AO found the claim of the assessee to be acceptable in the absence of any adverse material. The Pr.CIT in such backdrop could step in under s. 263 only if it is demonstrated that the approach of the AO is perfunctory. Such finding would depend on specific facts emerging from record. In the instant case, purchase/ allotment of shares took place nearly three years prior to the year of sale. The payments were made through banking channel. The company underwent corporate restructuring in the intervening period. The factum of actual payment and investment towards purchase of shares is demonstrable from record and further supportable by corresponding receipts of shares in Demat account. The Pr.CIT has merely alleged inadequacy in enquiry on the basis of absence of the bank name which is also discredited from the facts emerging from record. No third party statement or SEBI report etc. is available to impair the bonafides of claim of the assessee. No adverse material is brought on record to warrant deeper scrutiny. In our opinion, the view taken by the AO thus cannot be assailed when tested on the touchstone of circumscribed allegations on bank particulars leveled in the revisional order. 19. Besides, we also find merit in the contention of the assessee that some inadequacy in the manner of inquiry cannot necessarily be a ground for invocation of powers under s. 263 of the Act. Such view has been expressed in the judgments rendered by the Hon’ble Delhi High Court in the case of CIT vs. Sunbeam Auto Ltd. ; ITO vs. DG Housing Projects Ltd.; Pr. CIT vs. Clix Finance India Pvt. Ltd. And Pr. CIT vs. Klaxon Trading Pvt. Ltd. etc. In the instant case, the alleged inadequacy towards bank particulars is also not correct. ITA No.1335/Del/2024 14 | P a g e 20. The decision rendered in Zile Singh quoted on behalf of the revenue is wholly inapplicable in the context of findings in present case. The revisional directions of the PCIT in the present case is founded upon lack of information on bank name at the time purchases made in earlier year. The decision in Zile Singh is premised on all together different facts. The parameters of enquiry expected in that case by the PCIT do not resonate with the parameters adopted in the present case at all. That was a case of complete lack of enquiry on crucial aspects unlike the present case. 21. In the light of delineation, the facts of the present case do not indicate that the twin conditions contained in s. 263 are fulfilled in letter and spirit. The revisional order is thus quashed and set aside. 22. In the result, the appeal of the assessee is allowed. Order pronounced in the open Court on 25th April, 2025. Sd/- Sd/- (SUDHIR PAREEK) JUDICIAL MEMBER *Amit Kumar, Sr.P.S* Copy forwarded to: • Appellant • Respondent • CIT • CIT(Appeals) • DR: ITAT (PRADIP KUMAR KEDIA) ACCOUNTANT MEMBER ASSISTANT REGISTRAR ITAT, NEW DELHI "