RADIAL INTERNATIONAL MINING SERVICES PRIVATE LIMITED,NEW DELHI V. PR,CIT (CENTRAL), NEW DELHI

ITA 1651/DEL/2023

AI Insights

The case involves Radial International Mining Services Pvt. Ltd., which appealed against the order of the Principal Commissioner of Income Tax (PCIT) under section 263 of the Income Tax Act, 1961. The PCIT had set aside the original assessment order that accepted the assessee's return declaring nil income and allowed all claimed expenses. The PCIT's revision was based on findings that the assessee had not conducted any business activities during the year and had not provided sufficient justification for the expenses claimed. The Tribunal's decision affirmed the PCIT's order, emphasizing the lack of proper inquiry by the Assessing Officer and the need to disallow expenses not wholly and exclusively laid out for business purposes.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 361086 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-05-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Assessment Year: 2018-2019
• Other Referred Cases: Amitabh Bachchan vs. Commissioner of Income Tax, Paville Project Pvt. Ltd. vs. Commissioner of Income Tax, Malabar Industries Company Limited vs. CIT, Rampyari Devi Saraogi vs. CIT, Tara Devi Aggarwal vs. CIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PARVEEN RAWAL
• Assessee Lawyers: NAGESH BEHL
• Keywords: Set aside; Opportunity of being heard; Business expenditure; Corroborative evidences; Principle of natural justice; Audit objection; Assessment record; Revision of order; Prejudicial to interest
• Section: 143(3); 142(1); 263; 139; 37

Judgement Text

" 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘F’: NEW DELHI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER AND SHRI AVDHESH KUMAR MISHRA, ACCOUNTANT MEMBER ITA No. 1651/Del/2023, A.Y. 2018-19 Radial International Mining Services Pvt. Ltd. 3rd Floor, Khasra No. 385, Plot No. 3, 100 Foota Road, Ghitorni, New Delhi PAN:AADCB5048D Vs. Principal Commissioner of Income Tax (Central) Delhi-1, ARA Building, Jhandewala, New Delhi (Appellant) (Respondent) Appellant by Shri Nagesh Behl, Advocate Respondent by Sh. Parveen Rawal, CIT-DR Date of Hearing 20/02/2025 Date of Pronouncement 20/05/2025 ORDER PER AVDHESH KUMAR MISHRA, AM This appeal of the assessee for the Assessment Year (hereinafter, the ‘AY’) 2018-19 is directed against the order dated 31.03.2023 of the Commissioner of Income Tax (Central), Delhi-1, New Delhi [hereinafter, the ‘PCIT’]. 2. The assessee has raised following grounds of appeal: - “1. That the order of Principal Commissioner of Income Tax (Central), Delhi 1 is contrary to the law and the facts of the appellant's case. 2. That the order of Principal Commissioner of Income Tax (Central), Delhi 1 is contrary to the law and the fact, order u/s 263 is passed in ITA No.1651/Del/2023 Radial International Mining Services Pvt. Ltd. 2 respect of additions for which show cause notice was not given to the assessee. 3. That Ld. PCIT has given only one-day time to submit reply, show cause notice was issued on 27.03.2023 at 21:30 in the night and date of filing of reply was 29.03.2023 at 11:00 AM, thus proper opportunity of being heard is not given to the assessee. 4. That the Ld. PCIT erred in holding that assessee was not doing any business in the relevant assessment year. 5. That order of the Principal Commissioner of Income Tax is contrary to the law and the facts of the case, and bad in law in directing the AO to make a fresh assessment after disallowing the all expenses claimed amounting to Rs.50,18,444/- debited to P & L A/c except those required to maintain the corporate identity of the company such as fees to statutory auditors and any fees to register of companies. 6. That order of the Principal Commissioner of Income Tax is contrary to the law and the facts of the case, and bad in law in directing the AO to assessee income under section 22 of the Act. 7. The appellant craves leave to add to or amend the aforesaid grounds before disposal of the appeal.” 3. The relevant facts giving rise to this appeal are that the assessee, as per its Income Tax Return (hereinafter, the ‘ITR’) of the relevant year, is engaged in the business of consulting services regarding sale, repair, etc. of tyres of heavy earthmovers vehicles. It filed its ITR on 29.10.2018 declaring Nil income. The entire assessment order reads as under: - “The original return of income for A.Y. 2018-19 was e-filed by the assessee u/s 139 of the Income Tax Act, 1961 on 29.10.2018 vide ack. No. 353401251291018 declaring gross total income at Rs. Nil/-. 2. The case was manually selected for scrutiny. ITA No.1651/Del/2023 Radial International Mining Services Pvt. Ltd. 3 3. Accordingly, a notice u/s 143(2) dated 25.09.2019 was issued and duly served upon the assessee. Subsequently, Notice u/s 142(1) dated 11.03.2020, 20.01.2021 and 06,02,2021 was issued and duly served upon the assessee through ITBA along with questionnaire. 4. During the previous year the assessee was engaged in the business of Technical Consultancy Services in respect of tyres and to sell, repair and maintain earthmover tyres. 5. In response to the notices issued, the assessee filed its reply/submissions through ITBA explaining the issues raised. The reply of the assessee was perused and placed on record. 6. After perusal of the reply the returned income of the assessee company is accepted. Issue demand notice and challan accordingly.” 4. Later, the Principal Commissioner of Income Tax (hereinafter, the ‘PCIT’), using his revisionary power under section 263 of the Income Tax Act, 1961 (hereinafter, the ‘Act’), passed the impugned order as under: - “5. The assessment has been completed by AO on 18.02.2021 accepting returned income of the assessee without any further enquiry. It is observed that the assessee has given only partial reply to the queries raised by the assessing officer. For instance:  The assessing officer raised the specific query regarding no business activity being carried-on by the assessee and therefore asked for justification for expenses claimed. The assessee admitted that they had no business on hand during the year. The assessee admitted that even the single employee on rolls of the company had left during the year. Under the circumstances, the company does not have any resource to provide any onsite technical and consultancy services. Still the assessing officer has accepted the assessee's explanation and allowed full deduction for all expenses.  The Assessing officer had asked the assessee to explain the purpose for booking six flats in Digital Green Projects and to provide supporting documents to explain the source for ITA No.1651/Del/2023 Radial International Mining Services Pvt. Ltd. 4 investment. The assessee failed to address these queries and had not provided any documentary evidence called for. As far as taxing of income pertaining to house property is concerned, the annual letting value of any property owned by a company is required to be taxed under section 22. Where the property is shown to be used for the purpose of business, only that part of the property is not covered under section 22. In this case the assessee has not placed any material on record to show how many out of the six flats were used for the purpose of business and in what manner. In fact, even the occupant of these flats are not mentioned by the assessee and their nexus to business if any. Under such circumstances no conclusion can be drawn that the flats were being used for the purpose of business and were outside the ambit of section 22.  No justification for claiming building maintenance charges toward lift and security in respect of the six flats has been provided nor its nexus with assessee's business has been justified. The AO ought to have at least asked who were the occupants of these flats and their connection to the company. Therefore, there is no justification for allowance of deduction on account of building maintenance charges as business expenditure.  As regards rent paid, it is not clear why the assessee is taking one more property on rent during the year, when it has no order in hand. Before allowing deduction on account of rent the AO should have at least asked for justification for the second property and any proof for utilisation of the property for the business purpose. 6. However, without raising any further queries even when the reply of the assessee was incomplete in many respects and demanding further explanation, the AO has completed the assessment allowing full deduction of all expense when the assessee has not even established that any business was not carried on during the year. The view taken by the assessing officer in the absence of complete response from the assessee on the issue cannot be termed as a possible view on the matter. Under these circumstances an audit objection has been raised pointing out these deficiencies. ITA No.1651/Del/2023 Radial International Mining Services Pvt. Ltd. 5 7. Reference is made to the provision of section 263 wherein any order that is erroneous and prejudicial to the interest of the revenue can be revised with suitable direction to the assessing officer. In this connection, reference is also made to clause (a) of explanation 2 to subsection 1 of section 263 which provides that an order passed without making any enquiry or verification which should have been made shall be deemed to be erroneous in so far as it is prejudicial to the interest of revenue. It is observed that in this case deduction for all expenses have been allowed infull without establishing the business purpose of the same, more so when the assessee admittedly does not have any business/orders on hand. As stated earlier, one of the findings of the search on the directors of the assessee company did not have any business operations. Despite such background facts available on record, the assessing officer failed to conduct the bare minimum inquiry necessary to determine the question of allowability of expenses. Therefore, the order passed by the Assessing officer has resulted in allowance of full deduction claimed by the assessee without making any enquiry which was warranted on the facts of the case. 8. Accordingly, a notice under section 263 dated 27.03.2023 was issued to the assessee as both the conditions mandated under the section 263 as are fulfilled. The assessee was asked to explain as to why proceedings under section 263 of the Income Tax Act, should not be initiated for revision of Assessment Order for AY 2018-19 and why the amount of expenses of Rs. 50,18,444/- should not be disallowed and added back u/s 37 of the IT Act, 1961. 9. In response, the assessee has furnished its reply dated 29-03- 2023. Regarding the business operations carried out by the company during the year, the assessee has filed copy of an agreement dated 28-05-2016. As per the agreement the assessee was to sell tyres and was also responsible for repair of these tyres for the period of three years. For this purpose, the company was to depute its employees to the buyer premises. It is further stated by assessee that the amount towards sale of tyres was booked as income in earlier year whereas during this year the assessee was to undertake repairs of those tyres. The explanation again was not supported with any evidence/document such as requisition for services by the tyre buyers ITA No.1651/Del/2023 Radial International Mining Services Pvt. Ltd. 6 or any evidence of rendering such repair and maintenance services by the assessee. On the contrary the assessee had admitted that they have no employees on their rolls during the year. Even the P&L account for the earlier year does not show any amount on account of sale of tyres. In fact, the entire revenue of Rs.75.50 lakhs is shown as repair and maintenance in the P&L account of last year. Therefore, the submission made that the assessee had sold tyres in the earlier years which was to be serviced in this year is not at all established. On all the other issues no submission was made even during the 263 proceedings. 10. It is observed that even the agreement entered in the earlier year which is now relied upon, was not produced before the AO. On perusal of the financial statements of the assessee during the year, it is noticed that there is neither sale of service nor sale of product and also no revenues generated from other operations during the year. This clearly implies that there is no business activity carried out during the year. Hence, it was not established either during the assessment proceedings or at the time of proceedings u/s 263 that the expenses of Rs. 50,18,444/- debited to P&L account were laid out or expended wholly and exclusively for the purpose of business. No material is placed on record to show that the assessee is engaged in any business activity. It is therefore concluded that during the previous year the assessee did not have any business activity.” 11. In view of the foregoing discussion, the assessment order u/s 143(3) of the IT Act, 1961 dated 18.02.2021 is set aside. The AO is directed to make a fresh assessment disallowing the all expenses claimed amounting to Rs.50,18,444/-debited to P&L A/c except those required to maintain the corporate identity of the company such as fees to statutory auditors and any fees to register of companies. As regards the six flats owned by the assessee, the assessing officer is directed to compute the income in respect of the same under section 22 allowing deduction as permissible under that head of income, after giving an opportunity to the assessee in this regard.” [Emphasis has been supplied by us] 5. Aggrieved the assessee filed appeal before the Tribunal. ITA No.1651/Del/2023 Radial International Mining Services Pvt. Ltd. 7 6. The Ld. Counsel submitted that the PCIT has not given sufficient opportunity of being heard to the assessee to file detailed reply to the show-cause notice issued under section 263 of the Act. The show-cause notice issued under section 263 of the Act dated 27.03.2023 was responded to the assessee. A copy of the said reply dated 29.03.2023 was submitted along with Form 36 (appeal memo) before us. A perusal of the said reply showed that the assessee had neither sought any time to furnish further reply nor had raised any grievance with respect to two days’ time for compliance. Now the assessee had raised the issue of two days’ time as a grievance being contrary to the principle of natural justice. 6.1 The Ld. Counsel further submitted that the notice issued under section 263 of the Act was confined to the existence of business vis-à-vis the claim of expenses of Rs.50,18,444/- in absence of any business activity carried out by the assessee. He drew our attention to the relevant portion of the show-cause notice as under: - “3. On perusal of the assessment record, it is found that the assessee was engaged in the business of consulting Services in respect of tyres and to sell, repair and maintain earthmover tyres. Examination of profit and loss account revealed that expenses of Rs. 50,18,444/- had been debited to P&L A/c which is not justifiable as the assessee did not have any business orders during the year and hence, no business activity was carried out by the assessee during the year. Therefore, the expenses of Rs. 50,18,444/- claimed by the assessee during the year has not been laid out and expended wholly and ITA No.1651/Del/2023 Radial International Mining Services Pvt. Ltd. 8 exclusively for the purpose of the business and hence, the same cannot be allowed as deductible expense for income tax purpose. 4. In view of above facts, I am in opinion that Assessment order dated 18.02.2021 in your case for A.Y. 2018-19 is erroneous in so far as it is prejudicial to the interests of the revenue as the order is passed by the AO without making inquiries or verification which should have been made. Therefore, you are required to explain as to why proceedings under section 263 of the Income-tax Act, should not be initiated for revision of Assessment Order for A.Y. 2018-19. Further, you are required to show as to why amount of expenses of Rs. 50,18,444/- should not be disallowed and added back u/s 37 of the IT Act, 1961. You are requested to give details of the expenses of Rs. 50,18,444/-claimed during the year and also provide their ledger accounts. Please justify the same along with corroborative evidences.” 6.2 The Ld. Counsel argued that the PCIT had travelled beyond the scope of the show-cause notice. He drew our attention to the last para of the impugned order to demonstrate that the PCIT, prima-facie, had acted in violation of the principle of natural justice. Vide the impugned order, the PCIT has directed the AO to disallow those expenses out of Rs.50,18,444/- which was not mandatorily incurred for keeping the assessee company active. The PCIT has further directed the AO to compute income under section 22 of the Act from 6 flats owned by the assessee. Accordingly, the Ld. Counsel contended that the impugned order was not sustainable because the PCIT had travelled beyond the domain of show-cause notice in violation of the principle of natural justice and non- affording of proper opportunity of being heard. The Ld. Counsel drew our attention to the service agreement to submit that the assessee was duly ITA No.1651/Del/2023 Radial International Mining Services Pvt. Ltd. 9 engaged in carrying out its business; hence the claim of business expenses was justified. 7. On the other hand, the Ld. CIT-DR vehemently argued the case and prayed for dismissal of the appeal. He supported the impugned order. 8. We have heard both parties and have perused the material available on record. We perused the show-cause notice dated 29.03.2023 issued by the PCIT and the assessee’s reply, dated 29.03.2023, to the show-cause notice [submitted along with Form 36 (appeal memo)]. The perusal of the said reply showed that the assessee had neither sought any time to furnish further reply nor had raised any grievance with respect to two days’ time to respond. Now the assessee had raised the issue of two days’ time as a grievance being in violation of natural justice. We do not see any merit in this issue on the simple reasoning that the said show-cause notice was duly responded without any grievance particularly when the said proceedings was getting barred by limitation on 31.03.2023. 9. The relevant part of the section 263 of the Act is extracted hereunder: - “Explanation 2—For the purposes of this section, it is hereby declared that an 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, if, in the opinion of the Principal Commissioner or Commissioner, — (a) the order is passed without making inquiries or verification which should have been made; ITA No.1651/Del/2023 Radial International Mining Services Pvt. Ltd. 10 (b) the order is passed allowing any relief without inquiring into the claim; (c) the order has not been made in accordance with any order, direction or instruction issued by the Board under section 119; or (d) the order has not been passed in accordance with any decision which is prejudicial to the assessee, rendered by the jurisdictional High Court or Supreme Court in the case of the assessee or any other person.” 10. As regards to the issue that the PCIT had traveled beyond the domain of show-cause notice under section 263 of the Act, we take guidance from order of the Hon'ble Supreme Court in the case of Amitabh Bachchan [2016] 384 ITR 200 in which the Hon'ble Supreme Court had held that there is nothing in section 263 of the Act to make the Commissioner confine himself to the terms of show-cause notice, and further that power of revision under section 263 of the Act is not contingent on giving of a show-cause notice. Considering this well settled position, we find no merit on this score. 11. The Hon'ble Supreme Court, in the case of Paville Project Pvt. Ltd. in Civil Appeal No. 6126 of 2021 order dated 06.04.2023 had stated that the scheme of the Income Tax was to levy and collect tax in accordance with the provisions of the Act which was entrusted to the Revenue. If due to an erroneous order of the Income Tax Officer, the Revenue was losing tax lawfully payable by a person, it will certainly be prejudicial to the interests of the Revenue. The Court upon perusing the Assessment Order and the ITA No.1651/Del/2023 Radial International Mining Services Pvt. Ltd. 11 order passed by the Commissioner of Income Tax, relied upon Malabar Industries Company Limited v. CIT, (2000) 2 SCC 718 and held that the order passed by the Assessing Officer was erroneous as well as prejudicial to the interest of the Revenue. Thus, the Hon’ble High Court had committed a very serious error in setting aside the order passed by the Commissioner passed in exercise of powers under Section 263 of the Act. With the above observation, the Hon'ble Supreme Court allowed the appeal and set aside the impugned order passed by the Hon’ble High Court and restored the order passed by the Commissioner in exercise of powers under Section 263 of the Income Tax Act. The relevant part of the order of the Hon’ble Supreme Court in the case of Paville Project Pvt. Ltd. “7. In the present case, the Commissioner, in exercise of the powers under Section 263 of the Income Tax Act and in exercise of the revisional jurisdiction, set aside the assessment order by specifically observing that the assessment order was erroneous as well as prejudicial to the interest of the Revenue. However, the High Court by the impugned judgment and order has set aside the order passed by the Commissioner by observing that the Commissioner wrongly invoked the powers under Section 263 of the Act. 7.1 Learned counsel appearing on behalf of the assessee has heavily relied upon the decision of this Court in the case of Malabar Industrial Co. Ltd. (supra). It is true that in the said decision and on interpretation of Section 263 of the Income Tax Act, it is observed and held that in order to exercise the jurisdiction under Section 263(1) of the Income tax Act, 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. It is further observed that if one of them is absent, recourse cannot be had to Section 263(1) of the Act. “What can be said to be prejudicial to the interest of the Revenue” has been dealt with and considered in paragraphs 8 to 10 in the case of Malabar Industrial Co. Ltd. (supra), which are as under:- ITA No.1651/Del/2023 Radial International Mining Services Pvt. Ltd. 12 “8. The phrase “prejudicial to the interests of the Revenue” is not an expression of art and is not defined in the Act. Understood in its ordinary meaning it is of wide import and is not confined to loss of tax. The High Court of Calcutta in Dawjee Dadabhoy & Co. v. S.P. Jain [(1957) 31 ITR 872 (Cal)] , the High Court of Karnataka in CIT v. T. Narayana Pai [(1975) 98 ITR 422 (Kant)] , the High Court of Bombay in CIT v. Gabriel India Ltd. [(1993) 203 ITR 108 (Bom)] and the High Court of Gujarat in CIT v. Minalben S. Parikh [(1995) 215 ITR 81 (Guj)] treated loss of tax as prejudicial to the interests of the Revenue. 9. Mr Abraham relied on the judgment of the Division Bench of the High Court of Madras in Venkatakrishna Rice Co. v. CIT [(1987) 163 ITR 129 (Mad)] interpreting “prejudicial to the interests of the Revenue”. The High Court held: “In this context, (it must) be regarded as involving a conception of acts or orders which are subversive of the administration of revenue. There must be some grievous error in the order passed by the Income Tax Officer, which might set a bad trend or pattern for similar assessments, which on a broad reckoning, the Commissioner might think to be prejudicial to the interests of Revenue Administration.” In our view this interpretation is too narrow to merit acceptance. The scheme of the Act is to levy and collect tax in accordance with the provisions of the Act and this task is entrusted to the Revenue. If due to an erroneous order of the Income Tax Officer, the Revenue is losing tax lawfully payable by a person, it will certainly be prejudicial to the interests of the Revenue. 10. The phrase “prejudicial to the interests of the Revenue” has to be read in conjunction with an erroneous order passed by the Assessing Officer. Every loss of revenue as a consequence of an order of the Assessing Officer cannot be treated as prejudicial to the interests of the Revenue, for example, when an Income Tax Officer adopted one of the courses permissible in law and it has resulted in loss of revenue; or where two views are possible and the Income Tax Officer has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the Revenue unless the view taken by the Income Tax Officer is unsustainable in law. It has been held by this Court that where a sum not earned by a person is assessed as income in his hands on his so offering, the order passed by the Assessing Officer accepting the same as such will be erroneous and prejudicial to the interests of the Revenue. ITA No.1651/Del/2023 Radial International Mining Services Pvt. Ltd. 13 (See Rampyari Devi Saraogi v. CIT [(1968) 67 ITR 84 (SC)] and in Tara Devi Aggarwal v. CIT [(1973) 3 SCC 482 : 1973 SCC (Tax) 318 : (1973) 88 ITR 323] .)” 7.2 Thus, even as observed in paragraph 9 by this Court in the case of Malabar Industrial Co. Ltd. (supra) that the scheme of the Act is to levy and collect tax in accordance with the provisions of the Act and this task is entrusted to the Revenue. It is further observed that if due to an erroneous order of the Income Tax Officer, the Revenue is losing tax lawfully payable by a person, it will certainly be prejudicial to the interests of the Revenue. However, only in a case where two views are possible and the Assessing Officer has adopted one view, such a decision, which might be plausible and it has resulted in loss of Revenue, such an order is not revisable under Section 263. 7.3 Applying the law laid down by this Court in the case of Malabar Industrial Co. Ltd. (supra) to the facts of the case on hand and even as observed by the Commissioner, the order passed by the Assessing Officer is erroneous as well as prejudicial to the interest of the Revenue. Having gone through the assessment order as well as the order passed by the Commissioner of Income Tax, we are also of the opinion that the assessment order was not only erroneous but prejudicial to the interest of the Revenue also. In the facts and circumstances of the case, it cannot be said that the Commissioner exercised the jurisdiction under Section 263 not vested in it. The erroneous assessment order has resulted into loss of the Revenue in the form of tax. Under the Circumstances and in the facts and circumstances of the case narrated hereinabove, the High Court has committed a very serious error in setting aside the order passed by the Commissioner passed in exercise of powers under Section 263 of the Income Tax Act. 8. In view of the above and for the reasons stated above, present appeal succeeds. The impugned judgment and order passed by the High Court is hereby quashed and set aside and that the order passed by the Commissioner passed in exercise of powers under Section 263 of the Income Tax Act is hereby restored.” 12. Similar issue has been decided in the favour of the Revenue by the Coordinate bench of the Tribunal in the case of Rajpal Singhal in the ITA ITA No.1651/Del/2023 Radial International Mining Services Pvt. Ltd. 14 No. 1565/Del/2024 (order dated 07.04.2025). The relevant part of the said order reads as under: “6. Thus, from a bare perusal of assessment order it is evident that the complete details/documents as requisitioned by the Assessing Officer were not made available to him by the assessee. In the absence of relevant documents, the AO failed to make necessary enquiries/verifications which he ought to have made before passing the assessment order, yet he accepted the income returned by the assessee. It is a well-established principle that revisionary powers u/s. 263 of the Act can be involved only, if the twin conditions set out in section 263 of the Act are satisfied i.e. (i) order of the AO is erroneous, and (ii) must also be prejudicial to the interest of the Revenue. In the instant case we find that the CIT(A) has rightly exercised revisional powers, as both the conditions are satisfied. The AO on one hand is writing that complete documents were not furnished by the assessee and on the other accepted returned income without verification of documents. This makes the order erroneous and prejudicial to the interest of revenue. The CIT(A) while passing the order u/s. 263 of the Act has invoked the provision of section 263 read with explanation 2 inserted by the Finance Act 2015 w.e.f. 01.06.2015. Explanation 2(a) in an unambiguous manner states that where the order is passed without making enquiries or verification which should have been made, the same shall be deemed to be erroneous and in so far as it is prejudicial to interest of revenue. Considering entire facts of the case and documents on record, we find no infirmity in the impugned order. The PCIT has exercised revisional jurisdiction in a valid and justified manner. Hence, impugned order is upheld and appeal of the assessee is dismissed being devoid of any merit.” 13. Lastly on merits, as discussed in the foregoing paragraphs and ratio decidendi laid down in the above cited decisions of the Hon’ble Supreme Court, the Ld. PCIT has amply demonstrated in her impugned order that the issue under reference was neither properly enquired into nor was ITA No.1651/Del/2023 Radial International Mining Services Pvt. Ltd. 15 verified by the AO. Explanation 2(a) to section 263 of the Act, in an unambiguous manner states that where the order is passed without making enquiries or verification which should have been made, the same shall be deemed to be erroneous and in so far as it is prejudicial to interest of revenue. Further, this case is also held squarely covered by the decision of the Coordinate bench of the Tribunal in the case of Rajpal Singhal (supra). In absence of such a mandate which was cast upon the AO and cconsidering entire facts of the case along with the documents on record, we find no infirmity in the impugned order. Thus, we hold that the Ld. PCIT has rightly exercised her jurisdiction under section 263 of the Act in setting aside the assessment order of the AO being erroneous in so far it is prejudicial to the interest of the Revenue. Accordingly, we uphold the order of the Ld. PCIT and dismiss this appeal of the assessee. 14. In the result, appeal of the assessee is dismissed. Order pronounced in open Court on 20th May, 2025 Sd/- Sd/- (VIKAS AWASTHY) (AVDHESH KUMAR MISHRA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 20/05/2025 Binita, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent 3. PCIT/CIT 4. CIT(Appeals) ITA No.1651/Del/2023 Radial International Mining Services Pvt. Ltd. 16 5. CIT-DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI "