RAVINDRA DHAKA,GURGAON V. PCIT, FARIDABAD

ITA 2332/DEL/2025

AI Insights

The case involves an appeal by Ravindra Dhaka against the order of the PCIT, Faridabad, which was passed under section 263 of the Income Tax Act, 1961. The PCIT's order was based on the grounds that the initial assessment order, which accepted the income declared by the assessee without any additions regarding alleged cash payments for property, was erroneous and prejudicial to the interest of the revenue. The Tribunal heard arguments from both sides, where the assessee's counsel argued that the assessment was completed without providing the necessary documents or opportunity for cross-examination, and that the proceedings should have been initiated under section 153C due to the prior search. The Department's representative contended that the AO failed to conduct necessary inquiries based on the information from the search. The Tribunal agreed with the PCIT's view and dismissed the appeal, emphasizing the need for a thorough investigation into the cash payments alleged.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 833881 (ITAT-DELHI)
• Duration Of Justice: 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-02-2026
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2020-2021
• Appeal Filed On: 09-04-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: JITENDER SINGH
• Assessee Lawyers: VIJAY KUMAR SINGLA; KINSHUK GAUTAM
• Keywords: Set aside; Documents seized; Principle of natural justice; Revision of order
• Section: 143(3); 263

Judgement Text

"ITA No.2332/Del/2025 Page | 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI “A” BENCH: NEW DELHI BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENT & SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITA No.2332/Del/2025 [Assessment Year : 2020-21] Ravindra Dhaka H.No.-420F, Sector-38, Gurgaon-122001 PAN-AFQPD9356P vs Pr.CIT, Faridabad APPELLANT RESPONDENT Appellant by Shri Vijay Kumar Singla, CA & Shri Kinshuk Gautam, CA Respondent by Shri Jitender Singh, CIT DR Date of Hearing 04.12.2025 Date of Pronouncement 06.02.2026 ORDER PER MANISH AGARWAL, AM : The present appeal is filed by assessee against the order dated 28.03.2025 by Ld. Pr. Commissioner of Income Tax, Faridabad [“Ld. PCIT”] passed u/s 263 of the Income Tax Act, 1961 [“the Act”] pertaining to Assessment Year 2020-21. 2. Brief facts of the case are that the assessee is an individual and filed his return of income, declaring total income at INR 27,12,580/-. The case was selected for limited scrutiny and during the course of assessment proceedings, the Faceless AO asked the JAO to provide legible copies of the documents relied upon by the Investigation Wing Printed from counselvise.com ITA No.2332/Del/2025 Page | 2 to allege that assessee has made cash payment of INR 44,68,000/- [wrongly mentioned as INR 48,64,000/-] in acquisition of property. However, as the legible copy could not be provided therefore, Faceless AO has passed the assessment order u/s 143(3) accepting the income as declared by the assessee. Thereafter, Ld. PCIT in terms of notice issued u/s 263 dated 15.01.2025 initiated the proceedings u/s 263 by holding the assessment order as erroneous and pre-judication to the interest of Revenue as no enquiry or investigation was carried out nor any additions with respect to the cash payment made on the purchase of property was made in the hands of the assessee. 3. Against the said order, assessee filed an appeal before the Tribunal by taking following grounds of appeal:- 1) “The Ld. PCIT has erred in law while passing the order dated 28-03-2025 u/s. 263 of the Act by Ld. PCIT, Faridabad has been made without satisfying the statutory pre conditions contained in the Act and is therefore without jurisdiction and thus, deserves to be quashed as such. 2) The Ld. PCIT has erred in law that initiation of proceedings u/s. 263 of the Act on the basis of statements recorded and material / evidences/information gathered during Search action u/s 132, as the remedy for this never lies u/s 263. 3) The Ld. PCIT has erred in law and assuming the jurisdiction on the basis of factually misconception of the facts and on the basis of erroneous assessment order, in which Ld AO considered the information collected in search action. 4) The Ld. PCIT has erred in law that initiation of proceedings u/s. 263 of the Act which depends on possibility or guess work, but it should actually be an error either of fact or of law; as providing of cross examination either at assessment state (u/s 143(3)) or at the time of revisionary exercise is against the principles of natural justice. 5) The Ld. PCIT has erred in law that action u/s. 263 of the Act is otherwise too inapplicable on the factual matrix of the facts of the instant case since it is not a case of \"lack of enquiry\" or \"lack Printed from counselvise.com ITA No.2332/Del/2025 Page | 3 of investigation\" and therefore the invocation u/s. 263 of the Act is not in accordance with law. 6) The Ld. PCIT has erred in law that has also failed to appreciate that, u/s. 263 of the Act, an order of assessment cannot be set aside to simply to make further enquiries and thereafter pass fresh order of assessment and as such, impugned order is contrary to law and hence, unsustainable. 7) That the Appellant prays for the grant of permission to add, alter, delete, modify, any or all of the grounds of appeal at any time on or before or during the time of hearing before the Hon'ble ITAT.” 4. Before us, in support of all the grounds of appeal, ld.AR for the assessee submits that assessment in the case of assessee was completed u/s 143(3) wherein addition was proposed on the basis of documents found and seized during the course of search however, as neither the copy of the documents seized during the survey containing the notings of cash payment was provided nor any opportunity to cross-examine the witnesses was provided. Ld. further, submitted that a search in the case of M/s. Sweta Group of cases were carried put where the alleged documents were found and seized, and since the search was carried out prior to 01.04.2021, therefore, proceedings in the case of the assessee should have been initiated u/s 153C of the Act. Regarding enquires, ld. AR submits that FAO requested the JAO to provide assessee the legible copies of the documents and also provide an opportunity to cross examine the witness however, when the AJO has failed to do so, the assessment order was passed by accepting the income declared by the assessee. Thus, as per ld. AR the assessment order so passed is neither erroneous nor prejudicial to the interest of revenue and requested that the same be quashed. Printed from counselvise.com ITA No.2332/Del/2025 Page | 4 5. On the other hand, ld. CIT DR for the Revenue vehemently supported the order of ld. PCIT and submits that from the perusal of the assessment order, it is evident that despite of request by the FAO, the JAO has failed to make any inquiry or investigation on the basis of information found during the course of search that the assessee has made cash payment in the acquisition of property and source of which is not explained. He thus submits that the assessment order lacks enquires and investigations and thus is erroneous and prejudicial to the interest of revenue and requested for the confirmation of the revision order of ld. PCIT. 6. Heard the contentions of both parties and perused the material available on record. In the present case, from the grounds of appeal taken before us, it is observed that assessee has not challenged the legality of the assessment order passed u/s 143(3) of the Act. Further, it is further observed that no proper enquiries or investigation was made before passing the assessment order. The AO should have made independent inquiry/verification with respect to the alleged cash payment of INR 44,68,000/- made by the assessee for the purchase of property more particularly when the Faceless AO had specifically asked the Jurisdictional AO to provide the legible copies of all the material supplied by the Investigation Wing. Under these circumstances, in our considered opinion, the assessment order so passed, is without proper investigation and inquiries on the material available on record in the shape of the report of the Investigation Wing, suggesting that cash payment was made by the assessee for acquisition of the property. Accordingly, we find no error in the order Printed from counselvise.com ITA No.2332/Del/2025 Page | 5 of Ld. PCIT in directing the AO to pass the assessment order afresh after making inquiry/verification of the records available with respect to cash payment made by the assessee. Accordingly, all Grounds of appeal raised by the assessee are dismissed. 7. In the result, the appeal of the assessee is dismissed. Order pronounced in the open Court on 06.02.2026. Sd/- Sd/- (MAHAVIR SINGH) VICE PRESIDENT Date-06.02.2026 *Amit Kumar, Sr.P.S* (MANISH AGARWAL) ACCOUNTANT MEMBER Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT 6. Guard File ASSISTANT REGISTRAR ITAT, NEW DELHI Printed from counselvise.com "