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

ITA 2571/DEL/2025

AI Insights

The case involves New Delhi Up Road Carriers Private Limited, which appealed against the order of the PCIT-4, New Delhi, concerning the assessment year 2022-23. The PCIT had invoked section 263 of the Income Tax Act, 1961, to revise the assessment order passed by the AO, citing lack of inquiry into the genuineness of substantial expenses claimed and issues related to the directors of the company. The Tribunal's decision emphasized the supervisory jurisdiction of the PCIT to ensure that the assessment orders are not only correct but also just and fair in terms of revenue interest.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 835708 (ITAT-DELHI)
• Duration Of Justice: 9 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-02-2026
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2022-2023
• Appeal Filed On: 21-04-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: POOJA SWAROOP
• Assessee Lawyers: MONIKA GHAI; SHARAD
• Keywords: Set aside; Opportunity of being heard; TDS; Assessment record
• Section: 143(3); 263; 133(6)

Judgement Text

"1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘B’, NEW DELHI BEFORE SH.SUDHIR KUMAR, JUDICIAL MEMBER AND SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITA No. 2571/Del/2025 Assessment Year: 2022-23 NEW DELHI UP ROAD CARRIERS PRIVATE LIMITED, 148/59, JAL LAKSHMI CGHS LTD., IP EXTENSION, PATPARGANJ, NEW DELHI- 110092 [PAN No. AAACN5018L) Vs. PR. CIT-4, NEW DELHI (APPELLANT) (RESPONDENT) Appellant by Ms. Monika Ghai, Adv. & Sh. Sharad Aggarwal, Adv. Respondent by Ms. Pooja Swaroop, CIT(DR) Date of hearing: 03/2/2026 Date of Pronouncement: 11/2/2026 ORDER PER SUDHIR KUMAR, JM: This appeal by the assessee is directed against the order of the Pr. CIT-4, New Delhi dated 13.3.2025 passed u/s. 263 of the Income Tax Act, 1961 pertaining to A.Y. 2022-23. 2. The assessee raised the following grounds in appeal: 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 Printed from counselvise.com 2 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. 3. That the PCIT ought to have checked that the assessment order is neither erroneous nor prejudicial to the interest of the revenue and that the PCIT can assume jurisdiction u/s. 263 only if the twin conditions of the assessment order being erroneous and prejudicial to the interest of the revenue are satisfied. 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. Printed from counselvise.com 3 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. Printed from counselvise.com 4 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. Printed from counselvise.com 5 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. 4. At the time of hearing, ld. AR for the assessee submitted that the case of the assessee was selected under CASS for limited scrutiny. AO passed the order after making the enquiry in compliance of the order and the assessment order found correct. He also submitted that assessment order was passed after considering the submissions of the assessee. The assessee has submitted all the documents before the AO. The assessee also explained the loan given by the Director Sh. Gopal Singh which was given by the banking transactions. The interest paid after deducing TDS. 5. From the perusal of the order of the PCIT, we note that the case was selected for scrutiny assessment through CASS for the following reasons: Printed from counselvise.com 6 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. 5.1 AO has made the enquiry in regard to loan relating to point no. 2, no enquiry was made and the affidavits submitted by the assessee were accepted. There is no enquiry as per the scrutiny order where Director of the company whose registration has been cancelled by the by mentioning ‘yes’ or ‘no’ has been made. Secondly, the case was selected for the complete scrutiny, AO has not examined the expenditure incurred by the assessee of Rs. 27,20,11,899/- during the year under consideration. The AO had not examined and verified the issue during the course of assessment proceedings. Ld. PCIT has mentioned the various judgements referred by the ITAT and Hon’ble High Court which has given the power to the PCIT to revise the order u/s. 263 of the Act. The PCIT has the supervisory jurisdiction to cancel whether the order passed by the AO is erroneous or prejudicial to the interest of revenue. In this case, AO has not made any enquiry regarding the Directors of the company and no expenses incurred by the assessee was also not the PCIT who has rightly held that the assessment is erroneous and prejudicial to the interest of Printed from counselvise.com 7 revenue. The appeal of the assessee is liable to be dismissed and dismissed the same accordingly. 6. In the result the appeal of the assessee is dismissed. Order pronounced in the Open Court on 11.2.2026. Sd/- Sd/- (MANISH AGARWAL) (SUDHIR KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER SR BHATNAGGR Date:-11.02.2026 Copy forwarded to: 1.Appellant 2.Respondent 3.CIT 4.CIT(Appeals) ` 5.DR: ITAT AR, ITAT NEW DELHI Printed from counselvise.com "