PRIYANKA KISHORE GURNANI,MUMBAI V. ACIT CENTRAL CIRCLE - 3, JAIPUR

ITA 864/JPR/2025

AI Insights

The case involves two appeals by Kishore Kumar Gurnani and Priyanka Kishore Gurnani against the orders of the Learned Principal Commissioner of Income Tax (PCIT), which were passed under section 263 of the Income Tax Act for the assessment year 2021-22. The PCIT had found the original assessment orders to be erroneous and prejudicial to the interests of the Revenue, specifically concerning the fair market value of shares of M/s Vankon Moduler Pvt. Ltd. The Tribunal examined whether the Assessing Officer had conducted a proper verification of the details provided by the assessees and whether the assessment orders were passed in a routine and casual manner.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 779728 (ITAT-JAIPUR)
• Duration Of Justice: 4 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2021-2022
• Appeal Filed On: 28-05-2025
• Other Referred Cases: PCIT vs. Yogesh Kumar Shanilal Mehta, CIT vs. Ganpat Ram Bishnoi, Rashleela Enterprises Pvt. Ltd. vs. PCIT (Central), Jaipur, Malabar Industrial Co. Ltd. Vs. CIT
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH OJHA; LD
• Assessee Lawyers: ANKIT BUBNA; LD
• Keywords: Set aside; Fair market value; Revision of order; Non compliance
• Section: 142(1); 263

Judgement Text

" vk;dj vihyh; vf/kdj.k] t;iqj U;k;ihB] t;iqj IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”A-Bench” JAIPUR Jh xxu xks;y] ys[kk lnL; ,oa Jh ujsUnz dqekj] U;kf;d lnL; ds le{k BEFORE: SHRI GAGAN GOYAL, AM& SHRI NARINDER KUMAR, JM vk;dj vihy la-@ITA No.863/JPR/2025 fu/kZkj.k o\"kZ@Assessment Year : 2021-22 Kishore Kumar Gurnani A-304, Vastu Tower, Evershine Nagar, Malad West, Mumbai-400064. cuke Vs. The ACIT, Central Circle-3, Jaipur. LFkk;hys[kk la-@thvkbZvkjla-@PAN/GIR No. ABGPG7753B vihykFkhZ@Appellant izR;FkhZ@Respondent vk;dj vihy la-@ITA No. 864/JPR/2025 fu/kZkj.k o\"kZ@Assessment Year : 2021-22 Priyanka Kishore Gurnani A-304, Vastu Tower, Evershine Nagar, Malad West, Mumbai-400064. cuke Vs. The ACIT, Central Circle-3, Jaipur. LFkk;hys[kk la-@thvkbZvkjla-@PAN/GIR No. AJZPG2648G vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksjls@Assesseeby :Sh. Ankit Bubna, Ld. C.A. jktLo dh vksjls@Revenue by: Shri Rajesh Ojha, Ld. CIT lquokbZ dh rkjh[k@Date of Hearing : 16/10/2025 mn?kks\"k.kk dh rkjh[k@Date of Pronouncement: 16/10/2025 vkns'k@ORDER Printed from counselvise.com 2 ITA No. 863 & 864/JPR/2025 Kishore Kumar Gurnani, Mumbai PER: NARINDER KUMAR, JUDICIAL MEMBER . The above captioned two appeals are being disposed of by this common order, as common issues are involved and common arguments have been advanced on behalf of both sides. ITA No. 863/JPR/2025 2. By way of this appeal, assessee has challenged order dated 26.03.2025, passed by Learned PCIT(Central), Jaipur, u/s 263 of the Act, relating to the assessment year 2021-22, whereby assessment order dated 30.12.2022, relating to the said assessment year has been held to be erroneous as the same was found to be prejudicial to the interests of the Revenue, and the Assessing Officer has been directed to make necessary verification particularly as regards the fair market value of shares of M/s Vankon Moduler Pvt. Ltd., which, as observed by Learned PCIT, should have been calculated at the rate of Rs. 45.54 per share instead of Rs. 32 per share, as claimed by the assessee, but, the Assessing Officer did not verify said details and passed the assessment order in a routine and causal manner without applying the relevant provisions of the Act. Printed from counselvise.com 3 ITA No. 863 & 864/JPR/2025 Kishore Kumar Gurnani, Mumbai ITA No. 864/JPR/2021 3. By way of this appeal, assessee has challenged order dated 26.03.2025, passed by Learned PCIT(Central), Jaipur, u/s 263 of the Act, relating to the assessment year 2021-22, whereby assessment order dated 30.12.2022, relating to the said assessment year has been held to be erroneous as the same was found to be prejudicial to the interests of the Revenue, and the Assessing Officer has been directed to make necessary verification particularly, as regards the fair market value of shares of M/s Vankon Moduler Pvt. Ltd., which as observed by Learned PCIT, should have been calculated at the rate of Rs. 45.54 per share -instead of Rs. 32 per share, the rate claimed by the assessee, but, the Assessing Officer did not verify said details, and passed the assessment order in a routine and causal manner, without applying the relevant provisions of the Act. 4. Arguments heard. File perused. Contentions 5. Ld. AR for the appellant has submitted that all the requisite details, information and documents as regards capital gain on sale of equity shares of M/s Vankon Moduler Pvt. Ltd. were made available to the Assessing Printed from counselvise.com 4 ITA No. 863 & 864/JPR/2025 Kishore Kumar Gurnani, Mumbai Officer, and that since the Assessing Officer accepted the returned total income of the above named each assessee, after examination of all the details available on record and verification of facts, Learned PCIT fell in error in observing that the impugned assessment orders were passed by the Assessing Officer in a routine and causal manner and without verifying the details, particularly in respect of calculation of fair market value of shares of M/s Vankon Moduler Pvt. Ltd. In support of his contention, Ld. AR has relied on following decisions:-  PCIT vs. Yogesh Kumar Shanilal Mehta (2023) 155 taxmann.com 612 ( Gujarat H.C.)  CIT vs. Ganpat Ram Bishnoi (2006) 152 taxman 242 ( Rajasthan H.C.)  Rashleela Enterprises Pvt. Ltd. vs. PCIT (Central), Jaipur ITA No. 461/JPR/2024 dated 05.09.2024. Discussion 6. At this stage, it may be mentioned here that the case of the above said two assessees was selected for ‘compulsory scrutiny’, after approval dated 24.06.2022. Thereupon, notices u/s 143(2) of the Act, were issued to the assessees. Said notices were followed by notices u/s 142(1) of the Act. Each assessee submitted respective response, with requisite details and documents from time to time. Printed from counselvise.com 5 ITA No. 863 & 864/JPR/2025 Kishore Kumar Gurnani, Mumbai 7. Then, reference need to be made to the observations made by the Assessing Officer, while passing each assessment order. 8. In para 5 of the assessment orders, the Assessing Officer clearly observed that he was accepting the returned total income of the assessees, after examination of the details available on record and verification of facts with reference to details filed by each assessee. Thereupon, the Assessing Officer assessed total income of each assessee as specified therein. 9. From the above observations made the Assessing Officer, it can safely be said that the Assessing Officer had the opportunity to examine all the details available and the record submitted by each assessee, and it was on verification of the facts with reference to the details furnished by each assessee that the Assessing Officer passed the two assessment orders, thereby accepting returned total income of each of them. 10. In Ganpat Ram Bishnoi case (supra) our own Hon’ble High Court, while dealing with the issue regarding exercise of powers u/s 263 of the Act observed in the manner as:- Printed from counselvise.com 6 ITA No. 863 & 864/JPR/2025 Kishore Kumar Gurnani, Mumbai “Undoubtedly, the jurisdiction under section 263 is wide and is meant to ensure that due revenue ought to reach the public treasury and if it does not reach on account of some mistake of law or fact committed by the Assessing Officer, the Commissioner can cancel that order and require the concerned Assessing Officer to pass a fresh order in accordance with law after holding a detailed enquiry. But when enquiry in fact had been conducted and the Assessing Officer had reached a particular conclusion, though reference to such enquiries had not been made in the order of the assessment, but the same was apparent from the record of the proceedings, in the instant case, without anything to say how and why the enquiry conducted by the Assessing Officer was not in accordance with law, the invocation of jurisdiction by the Commissioner was unsustainable. As the exercise of jurisdiction by the Commissioner was founded on no material, it was liable to be set aside. Jurisdiction under section 263 cannot be invoked for making short enquiries or to go into the process of assessment again and again merely on the basis that more enquiry ought to have been conducted to find something. 11. In Malabar Industrial co. Ltd. Vs. CIT, 243 ITR 83 (SC) , Hon’ble Apex court, while dealing with the very issue specified two conditions to be fulfilled, for the purpose of recording of satisfaction by the Commissioner for exercise of powers u/s 263 of the Act, and in this regard, observed in the manner as :- “A bare reading of section 263 of the Income Tax Act, 1961, makes it clear that the prerequisite for the exercise of jurisdiction by the Commissioner suomotu under it, is that the order of the Income Tax Officer is erroneous is so far as it is prejudicial to the interests of the Revenue. The Commissioner has to be satisfied of twin conditions, namely, (i) the order of the Assessing Officer sought to be revised is erroneous; and (ii) it is prejudicial to the interests of the Revenue. If one of them is absent - if the order of the Income Tax Officer is erroneous but is not prejudicial to the Revenue or if it is not erroneous but is prejudicial to the Revenue - recourse cannot be had to section 263(1) of the Act.\" Printed from counselvise.com 7 ITA No. 863 & 864/JPR/2025 Kishore Kumar Gurnani, Mumbai 12. It is significant to note that on behalf of the department nothing has been brought to our notice to suggest that the Assessing Officer recorded any note at any point of time that such and such document relating to the fair market value of shares of the above named company was not made available by the assessee to the Assessing Officer despite notices. 13. From the assessment orders, we do not find any observation that any of the assesses remained non compliant on any issue or information. In other words, we have nothing on record to observe that the appellants withheld any information from the Assessing Officer depriving him from arriving at a just conclusion regarding any issue. 14. In view of the above discussion, when the Assessing Officer had collected all the relevant details, examined and verified the same, even as regards the fair market value of the shares pertaining to M/s Vankon Moduler Pvt. Ltd., it cannot be said that the Assessing Officer passed assessment orders in a routine and causal manner or without verifying details as regards the issue covered by the scrutiny. Printed from counselvise.com 8 ITA No. 863 & 864/JPR/2025 Kishore Kumar Gurnani, Mumbai Result 15. As a result, when the impugned orders by Learned PCIT cannot be sustained in view of the above cited decision by Hon’ble Apex Court, and the provisions of law, both these appeals are allowed and the impugned orders by Learned PCIT are hereby set aside. File be consigned to the record room after the needful is done by the office. Copy of common order be placed in the file of connected appeal. Order pronounced in the open court on 16/10/2025. Sd/- Sd/- ¼xxu xks;y½ ¼ujsUnz dqekj½ (GAGAN GOYAL) (NARINDER KUMAR) ys[kk lnL; @Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 16/10/2025 *Santosh vkns'k dh izfrfyfivxzsf’kr@Copy of the order forwarded to: 1. The Appellant- Kishore Kumar Gurnani, Mumbai Priyanka Kishore Gurnani, Mumbai 2. izR;FkhZ@ The Respondent- ACIT, Central Circle-3, Jaipur. 3. vk;djvk;qDr@ Theld CIT 4. vk;dj vk;qDr@ CIT(A) 5. foHkkxh; izfrfuf/k] vk;djvihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur 6. xkMZQkbZy@ Guard File ITA No.863 & 864/JPR/2025) vkns'kkuqlkj@ By order, lgk;d iathdkj@Asstt. Registrar Printed from counselvise.com "