VIIKING MEDIA AND ENTERTAINMENT PVT. LTD.,MUMBAI V. DCIT- CENTRAL CIRCLE 2(2), MUMBAI CITY

ITA 3433/MUM/2025

AI Insights

The case involves Viiking Media and Entertainment Pvt. Ltd., which faced revisionary proceedings under Section 263 of the Income Tax Act, 1961, by the Principal Commissioner of Income Tax (PCIT) for the assessment years 2017-18 to 2021-22. The revisions were based on the grounds that the original assessments were erroneous and prejudicial to the interests of the Revenue, particularly concerning the carry forward of losses due to a significant change in shareholding. The Tribunal examined whether the PCIT was justified in invoking Section 263 and whether the assessments made under Section 143(3) read with Section 153A were appropriate.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 831548 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2026
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: misc
• Appeal Filed On: 15-05-2025
• Other Referred Cases: Abhisar Buildwell Pvt. Ltd. vs. CIT, Shark Mines and Minerals Pvt. Ltd. vs. CIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: VIVEK PERAMPURNA
• Assessee Lawyers: RAJJEV KHANDELWAL
• Keywords: Set aside; Documents seized; Gift; Search and seizure; Revision of order; Carry forward of business losses; Prejudicial to interest
• Section: 143(3); 142(1); 263; 153A

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “F” MUMBAI BEFORE SHRI SANDEEP GOSAIN (JUDICIAL MEMBER) AND SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) ITA No. 3414, 3430 to 3433/MUM/2025 Assessment Year: 2017-18 to 2021-22 Viiking Media and Entertainment Pvt. Ltd., 604-605, 6th floor, Gateway Plaza, Central Circel-2(2), Mumbai-400076. Vs. DCIT-Central Circle (2)(2), Aayakar Bhavan, M.K. Road, Mumbai-400020. PAN NO. AAACJ 9884 E Appellant Respondent Assessee by : Mr. Rajjev Khandelwal Revenue by : Mr. Vivek Perampurna, CIT-DR Date of Hearing : 18/11/2025 Date of pronouncement : 20/01/2026 ORDER PER BENCH These appeals by the assessee are directed against separate revisionary orders passed by the Learned Principal Commissioner of Income Tax (hereinafter ‘Ld. PCIT’) under Section 263 of the Income Tax Act, 1961 (hereinafter ‘the Act’) for AY 2017-18 to 2021-22. The challenge primarily assails the jurisdiction of the Ld. PCIT in setting aside the assessment order(s) passed under Section 143(3) read with Section 153A, contending that the same was neither Printed from counselvise.com erroneous nor prejudicial to the interests of the Revenue. these appeal identical issues heard together and disposed off by way of this consolidated order for the sake of convenience and avoid repetition of facts. 2. Firstly, we take up the appeal of the assessee for assessment year 2017-18. The grounds raised by the as under: 1. On the facts and in the circumstances of the case and in law, the Ld. Pr. Commissioner of Income Tax (PCIT) erred in initiating revision proceedings u/s. 263 of the Income Tax Act, 1961 vide show-cause notice dated 21 u/s. 263 of the Income Tax Act, 1961 therefore erred in seeking revision of the assessment order by setting aside Assessment order passed under section 143(3) rws 153A, which was neither erroneous nor prejudicial to the 2. The Ld. PCIT erred in invoking the revisionary power under section 263 of the Income Tax Act, 1961 without appreciating the fact that the Ld. Assessing officer (AO) completed the assessment under section 143(3) rws 153A of the proper application of mind by accepting the claim of the appellant, which was in accordance with the provisions of law. 3. Briefly stated, facts of the case are that a search and seizure action u/s 132(1) of the Act was conducted cases of ‘JMJ group’ of entities search action, a notice u/s 153A of the Act was issued on 07.10.2021 which was duly served upon the assessee. In response, the assessee filed its return of income fo consideration on 31.10.2017 declaring total income of Rs. Nil Viiking Media and Entertainment Pvt. Ltd ITA No. 3414 & erroneous nor prejudicial to the interests of the Revenue. these appeal identical issues are involved and therefore, same were heard together and disposed off by way of this consolidated order for the sake of convenience and avoid repetition of facts. Firstly, we take up the appeal of the assessee for assessment 18. The grounds raised by the assessee are reproduced 1. On the facts and in the circumstances of the case and in law, the Ld. Pr. Commissioner of Income Tax (PCIT) erred in initiating revision proceedings u/s. 263 of the Income Tax Act, 1961 vide cause notice dated 21-02-2025 and thereby passing an order u/s. 263 of the Income Tax Act, 1961 therefore erred in seeking revision of the assessment order by setting aside Assessment order passed under section 143(3) rws 153A, which was neither erroneous nor prejudicial to the interest of revenue. 2. The Ld. PCIT erred in invoking the revisionary power under section 263 of the Income Tax Act, 1961 without appreciating the fact that the Ld. Assessing officer (AO) completed the assessment under section 143(3) rws 153A of the Income Tax Act, 1961 after proper application of mind by accepting the claim of the appellant, which was in accordance with the provisions of law. Briefly stated, facts of the case are that a search and seizure action u/s 132(1) of the Act was conducted on 08.02.2021 in the ’ of entities including the assessee. otice u/s 153A of the Act was issued on 07.10.2021 which was duly served upon the assessee. In response, the assessee filed its return of income for the year under consideration on 31.10.2017 declaring total income of Rs. Nil Viiking Media and Entertainment Pvt. Ltd 2 & 3430 to 3433/MUM/2025 erroneous nor prejudicial to the interests of the Revenue. In all erefore, same were heard together and disposed off by way of this consolidated order for the sake of convenience and avoid repetition of facts. Firstly, we take up the appeal of the assessee for assessment assessee are reproduced 1. On the facts and in the circumstances of the case and in law, the Ld. Pr. Commissioner of Income Tax (PCIT) erred in initiating revision proceedings u/s. 263 of the Income Tax Act, 1961 vide 2025 and thereby passing an order u/s. 263 of the Income Tax Act, 1961 therefore erred in seeking revision of the assessment order by setting aside Assessment order passed under section 143(3) rws 153A, which was neither 2. The Ld. PCIT erred in invoking the revisionary power under section 263 of the Income Tax Act, 1961 without appreciating the fact that the Ld. Assessing officer (AO) completed the assessment Income Tax Act, 1961 after proper application of mind by accepting the claim of the appellant, Briefly stated, facts of the case are that a search and seizure on 08.02.2021 in the the assessee. Pursuant to otice u/s 153A of the Act was issued on 07.10.2021 which was duly served upon the assessee. In response, r the year under consideration on 31.10.2017 declaring total income of Rs. Nil. The Printed from counselvise.com assessment was completed u/s 143(3) r.w.s. 153A of the Act on 01.04.2022 determining total income at Rs.5,99,74,390/ 3.1 Subsequently, the Ld. PCIT called for the recor examination, he observed there was a change in share holding more than 50% and therefore, the Assessing Officer was required to disallow the claim of the assessee of carry forward of the earlier years invoking provisions of section Ld. PCIT accordingly issued notice u/s 263 of the Act to the assessee. 3.2 The assessee in response submitted that the case of the assessee was not hit by section share holding was among the relative way of gift. The assessee also submitted that the year under consideration was unabated assessment year and therefore, no addition could have been made other material unearthed during the search. The Ld. PCIT though considered the submission view that disallowance mandated u/s 79 of the Act was attracted in the case of the assessee. The relevant finding of the Ld. PCIT is reproduced as under: 10.3 In all, it appears that the disallowance facts of this case since mandate of Section 79 of the Act is attracted on the facts of this case since. Viiking Media and Entertainment Pvt. Ltd ITA No. 3414 & assessment was completed u/s 143(3) r.w.s. 153A of the Act on 01.04.2022 determining total income at Rs.5,99,74,390/ Subsequently, the Ld. PCIT called for the recor observed that in the year under consideration there was a change in share holding of the assessee company by more than 50% and therefore, the Assessing Officer was required to disallow the claim of the assessee of carry forward and set off of loss invoking provisions of section 79 Ld. PCIT accordingly issued notice u/s 263 of the Act to the The assessee in response submitted that the case of the not hit by section 79 of the Act as the change of the share holding was among the relatives, which was transferred by way of gift. The assessee also submitted that the year under consideration was unabated assessment year and therefore, no addition could have been made otherwise then any incriminating material unearthed during the search. The Ld. PCIT though considered the submissions of the assessee, however, was of the view that disallowance mandated u/s 79 of the Act was attracted in the case of the assessee. The relevant finding of the Ld. PCIT is reproduced as under: 10.3 In all, it appears that the disallowance facts of this case since Section 79 of the Act is attracted on the facts of this Viiking Media and Entertainment Pvt. Ltd 3 & 3430 to 3433/MUM/2025 assessment was completed u/s 143(3) r.w.s. 153A of the Act on 01.04.2022 determining total income at Rs.5,99,74,390/-. Subsequently, the Ld. PCIT called for the record and after in the year under consideration, of the assessee company by more than 50% and therefore, the Assessing Officer was required to and set off of loss 79 of the Act. The Ld. PCIT accordingly issued notice u/s 263 of the Act to the The assessee in response submitted that the case of the 79 of the Act as the change of the which was transferred by way of gift. The assessee also submitted that the year under consideration was unabated assessment year and therefore, no wise then any incriminating material unearthed during the search. The Ld. PCIT though however, was of the view that disallowance mandated u/s 79 of the Act was attracted in the case of the assessee. The relevant finding of the Ld. PCIT is 10.3 In all, it appears that the disallowance facts of this case since Section 79 of the Act is attracted on the facts of this Printed from counselvise.com a) The assessee is a company in which the Public are not substantially interested. b) The combined shareholding of Ms. Vidya Joshi and Shri Jagdish Prasad Joshi which exceeded the stipula insignificant figure of 1.26% in FY 2016 c) The precise definition of \"internal\" transfers of shares and the consequent changes in shareholdings amongst the 3 family members above and the acceptability of the argument that this is not adversely impacted by Section 79 of the Act needs to be examined. d) The non-mention of how the shares of Ms. Vidya Joshi were transferred to Shri Sachin Joshi in the assessee's submissions needs to be explained by assessee. e) Whether the gifting of Joshi to Shri Sachin Joshi would attract any taxability under the income tax Act needs to be examined. f) How the percentage shareholding of 0% of Shri Sachin Joshi in the company in the AY 2016 18 needs to be explained, since only one gift by Shri Jagdish Prasad Joshi to his son has been stated. 10.4 Therefore, the assessee's submissions made above on the merits of the matter are not satisfactory in that they are incomplete and provide o inconsistent. Further, they challenge the conventional interpretations per the stated text of the provisions of Section 79 of the Act. A relook into the applicable facts. and syllogistic foundations and legal on the facts that have been provided and are available on record following the submission of the assessee to the questions raised. 3.3 The Ld. PCIT also rejected the contention of the assessee qua the issue of no incriminating material in relation to assessment year. The relevant finding of the Ld. PCIT is reproduced as under: “10.5 The assessee's argument that no addition can be made in respect of a particular issue in an order of assessment passed u/s 153A of the Act, if there was the absence of any incriminating material during the search on such issue. He has cited various ratios of the Hon'ble Courts in support. On this matter it is held Viiking Media and Entertainment Pvt. Ltd ITA No. 3414 & a) The assessee is a company in which the Public are not substantially interested. b) The combined shareholding of Ms. Vidya Joshi and Shri Jagdish Prasad Joshi which exceeded the stipulated 51% reduced to an insignificant figure of 1.26% in FY 2016-17. c) The precise definition of \"internal\" transfers of shares and the consequent changes in shareholdings amongst the 3 family members above and the acceptability of the argument that this is not adversely impacted by Section 79 of the Act needs to be mention of how the shares of Ms. Vidya Joshi were transferred to Shri Sachin Joshi in the assessee's submissions needs to be explained by assessee. e) Whether the gifting of 70000 shares by Shri Jagdish Prasad Joshi to Shri Sachin Joshi would attract any taxability under the income tax Act needs to be examined. f) How the percentage shareholding of 0% of Shri Sachin Joshi in the company in the AY 2016-17 increased to 88.06% in 18 needs to be explained, since only one gift by Shri Jagdish Prasad Joshi to his son has been stated. Therefore, the assessee's submissions made above on the merits of the matter are not satisfactory in that they are incomplete and provide only partial information and are also internally inconsistent. Further, they challenge the conventional interpretations per the stated text of the provisions of Section 79 of the Act. A relook into the applicable facts. and syllogistic foundations and legal provisions of this case is clearly indicated on the facts that have been provided and are available on record following the submission of the assessee to the questions raised. The Ld. PCIT also rejected the contention of the assessee qua no incriminating material in relation to assessment year. The relevant finding of the Ld. PCIT is reproduced as under: 10.5 The assessee's argument that no addition can be made in respect of a particular issue in an order of assessment passed u/s the Act, if there was the absence of any incriminating material during the search on such issue. He has cited various ratios of the Hon'ble Courts in support. On this matter it is held Viiking Media and Entertainment Pvt. Ltd 4 & 3430 to 3433/MUM/2025 a) The assessee is a company in which the Public are not b) The combined shareholding of Ms. Vidya Joshi and Shri Jagdish ted 51% reduced to an c) The precise definition of \"internal\" transfers of shares and the consequent changes in shareholdings amongst the 3 family members above and the acceptability of the argument that this is not adversely impacted by Section 79 of the Act needs to be mention of how the shares of Ms. Vidya Joshi were transferred to Shri Sachin Joshi in the assessee's submissions 70000 shares by Shri Jagdish Prasad Joshi to Shri Sachin Joshi would attract any taxability under the f) How the percentage shareholding of 0% of Shri Sachin Joshi in 17 increased to 88.06% in AY 2017- 18 needs to be explained, since only one gift by Shri Jagdish Therefore, the assessee's submissions made above on the merits of the matter are not satisfactory in that they are incomplete nly partial information and are also internally inconsistent. Further, they challenge the conventional interpretations per the stated text of the provisions of Section 79 of the Act. A relook into the applicable facts. and syllogistic provisions of this case is clearly indicated on the facts that have been provided and are available on record following the submission of the assessee to the questions raised.” The Ld. PCIT also rejected the contention of the assessee qua no incriminating material in relation to assessment year. The relevant finding of the Ld. PCIT is reproduced as under: 10.5 The assessee's argument that no addition can be made in respect of a particular issue in an order of assessment passed u/s the Act, if there was the absence of any incriminating material during the search on such issue. He has cited various ratios of the Hon'ble Courts in support. On this matter it is held Printed from counselvise.com that it is not prima facie visibly and completely clear from the materials available on record as to whether the impugned matter of transfers and changes in shareholdings effected by the assessee during the FY 2016 material that has been unearthed during the search or finds mention in the information available at this time that such is not the case. Presumably, the materials including documents seized during the search and analyzed thereafter would contain information that mention or relate shareholdings that were omitted to be or were improperly/incompletely appreciated by the Investigating Officer who had organized the search as well as by the Assessing Officer who had the opportunity to exami materials including the documents as above. Whether the material would be visibly incriminating or not would be the result of such examination or analysis, in the absence of which such material would be incriminating but undisco examined, analysed and appreciated in the proper sense and meaning of what it represented and presented about the reported financial affairs and incomes of the assessee. The Assessing Officer is now directed to examine the issue transfers in shareholdings made in the AY 2017 disallowance of the carry forwards in A.Y. 2017 above through the prism of whether these relate to material unearthed during the search that are provenly in case of the assessee. 10.6 While carrying out this exercise, the Assessing Officer shall consider and examine the import and applicability of the judicial ratios cited by the assessee including that of the Apex Court in the case of M/s. binding ratios of the Hon'ble Bombay High Court and the judicial positions in the matter that stand indicated by the ratios of the other judicial authorities. The order of assessment will therefore need to incorporate the position as to whether any of these ratios are pari materia applicable on the facts of the case of this assessee. The Assessing Officer shall take these facts into consideration and proceed to carry out the assessment and pass the order accordingly. Needless to say, if the binding ratios are so applicable there would be no case of assessment of any impugned amount emerging out of the discussions above. 3.4 The Ld. PCIT further by the Assessing Officer on the issue of carry forward and set off of Viiking Media and Entertainment Pvt. Ltd ITA No. 3414 & that it is not prima facie visibly and completely clear from the ials available on record as to whether the impugned matter of transfers and changes in shareholdings effected by the assessee during the FY 2016-17 are related to any incriminating material that has been unearthed during the search or finds mention in the materials unearthed during the search. There is no information available at this time that such is not the case. Presumably, the materials including documents seized during the search and analyzed thereafter would contain information that mention or relate to the impugned matter of changes/transfers in shareholdings that were omitted to be or were improperly/incompletely appreciated by the Investigating Officer who had organized the search as well as by the Assessing Officer who had the opportunity to examine and analyse the relevant materials including the documents as above. Whether the material would be visibly incriminating or not would be the result of such examination or analysis, in the absence of which such material would be incriminating but undiscovered as these had not been examined, analysed and appreciated in the proper sense and meaning of what it represented and presented about the reported financial affairs and incomes of the assessee. The Assessing Officer is now directed to examine the issue of the changes and transfers in shareholdings made in the AY 2017-18 leading to the disallowance of the carry forwards in A.Y. 2017-18 as narrated above through the prism of whether these relate to material unearthed during the search that are provenly incriminating to the case of the assessee. 10.6 While carrying out this exercise, the Assessing Officer shall consider and examine the import and applicability of the judicial ratios cited by the assessee including that of the Apex Court in the AbhisarBuildwell Pvt. Ltd. and the other judicially binding ratios of the Hon'ble Bombay High Court and the judicial positions in the matter that stand indicated by the ratios of the other judicial authorities. The order of assessment will therefore to incorporate the position as to whether any of these ratios are pari materia applicable on the facts of the case of this assessee. The Assessing Officer shall take these facts into consideration and proceed to carry out the assessment and pass accordingly. Needless to say, if the binding ratios are so applicable there would be no case of assessment of any impugned amount emerging out of the discussions above.” further noticed that no inquiry was carried out by the Assessing Officer on the issue of carry forward and set off of Viiking Media and Entertainment Pvt. Ltd 5 & 3430 to 3433/MUM/2025 that it is not prima facie visibly and completely clear from the ials available on record as to whether the impugned matter of transfers and changes in shareholdings effected by the 17 are related to any incriminating material that has been unearthed during the search or finds materials unearthed during the search. There is no information available at this time that such is not the case. Presumably, the materials including documents seized during the search and analyzed thereafter would contain information that to the impugned matter of changes/transfers in shareholdings that were omitted to be or were improperly/incompletely appreciated by the Investigating Officer who had organized the search as well as by the Assessing Officer ne and analyse the relevant materials including the documents as above. Whether the material would be visibly incriminating or not would be the result of such examination or analysis, in the absence of which such material vered as these had not been examined, analysed and appreciated in the proper sense and meaning of what it represented and presented about the reported financial affairs and incomes of the assessee. The Assessing of the changes and 18 leading to the 18 as narrated above through the prism of whether these relate to material criminating to the 10.6 While carrying out this exercise, the Assessing Officer shall consider and examine the import and applicability of the judicial ratios cited by the assessee including that of the Apex Court in the AbhisarBuildwell Pvt. Ltd. and the other judicially binding ratios of the Hon'ble Bombay High Court and the judicial positions in the matter that stand indicated by the ratios of the other judicial authorities. The order of assessment will therefore to incorporate the position as to whether any of these ratios are pari materia applicable on the facts of the case of this assessee. The Assessing Officer shall take these facts into consideration and proceed to carry out the assessment and pass accordingly. Needless to say, if the binding ratios are so applicable there would be no case of assessment of any impugned noticed that no inquiry was carried out by the Assessing Officer on the issue of carry forward and set off of Printed from counselvise.com loss and therefore, the assessment order was deemed to be erroneous in so far as prejudicial to the interest of the Revenue in terms of Explanation 2 to section 263 of the Act. The relevant finding of the Ld. PCIT is reproduced as under: “14. It is clear from the non of the applicability of Section 79 of the Act in the matter of the allowing of the carry forward if and as applicable) in AY 2017 successor Assessment Years that the necessary inquiries and investigation have NOT been carried out during the impugned assessment proceedings in the m carried out. Therefore, the assessee's contention about the non applicability of the revisionary power u/s 263 of the Act on the facts of this case are not acceptable and are rejected. The matter in hand involves the disallowa losses (and their set off if and as applicable) brought forward from the AY 2012- facts presented by the Department before the assessee show that the shares of Ms. Vidya Joshi held 50% apiece of the shares of the assessee company in the FY 2015-16 had reduced to 0.63% in the FY 2016 those of their son, Shri Sachin Joshi, who held 0% of the shares in FY 2015-16 stood enhanced to argument based on facts made here is that from the FY 2015 the impugned FY 2016 Individuals above stood changed from 50%, 50% and 0% to 0.63%, 0.63% and 88.06% respectively with a Solution FZC introduced in holding a shareholding percentage of 10.68% in the impugned FY 2016 The statutory position here is that since the shareholding pattern had changed substantially as above in FY 2016 losses brought forward from that earlier years should NOT have been so allowed to be carried forward in the AY 2017 mandate of Section 79 of the Act. Therefore, these brought forward losses would NOT be available for set off against the incomes assessed for the impugned AY 2017 carried forward losses, if determined as available, would not be allowed to be carried forward for set offs against any taxable incomes for the succeeding AYs 2018 22. Viiking Media and Entertainment Pvt. Ltd ITA No. 3414 & loss and therefore, the assessment order was deemed to be erroneous in so far as prejudicial to the interest of the Revenue in on 2 to section 263 of the Act. The relevant finding of the Ld. PCIT is reproduced as under: 14. It is clear from the non-examination by the Assessing Officer of the applicability of Section 79 of the Act in the matter of the allowing of the carry forward of Business losses (and their set off if and as applicable) in AY 2017-18 and onwards thereafter to the successor Assessment Years that the necessary inquiries and investigation have NOT been carried out during the impugned assessment proceedings in the manner these were to have been carried out. Therefore, the assessee's contention about the non applicability of the revisionary power u/s 263 of the Act on the facts of this case are not acceptable and are rejected. The matter in hand involves the disallowance u/s. 79 of the Act of business losses (and their set off if and as applicable) brought forward from -13 and 2013-14 in the impugned AY 2017 facts presented by the Department before the assessee show that the shares of Ms. Vidya Joshi and Shri Jagdish Prasad Joshi, who held 50% apiece of the shares of the assessee company in the FY 16 had reduced to 0.63% in the FY 2016-17 apiece while those of their son, Shri Sachin Joshi, who held 0% of the shares in 16 stood enhanced to 88.06% in FY 2016 argument based on facts made here is that from the FY 2015 the impugned FY 2016-17, the percentage share holdings of the 3 Individuals above stood changed from 50%, 50% and 0% to 0.63%, 0.63% and 88.06% respectively with a new shareholder Viz. M/s. Solution FZC introduced in holding a shareholding percentage of 10.68% in the impugned FY 2016-17. The statutory position here is that since the shareholding pattern had changed substantially as above in FY 2016-17, the business losses brought forward from that earlier years should NOT have been so allowed to be carried forward in the AY 2017 mandate of Section 79 of the Act. Therefore, these brought forward losses would NOT be available for set off against the incomes assessed for the impugned AY 2017-18. Also, any portion of these carried forward losses, if determined as available, would not be allowed to be carried forward for set offs against any taxable incomes for the succeeding AYs 2018-19,2019-20, 2020 Viiking Media and Entertainment Pvt. Ltd 6 & 3430 to 3433/MUM/2025 loss and therefore, the assessment order was deemed to be erroneous in so far as prejudicial to the interest of the Revenue in on 2 to section 263 of the Act. The relevant examination by the Assessing Officer of the applicability of Section 79 of the Act in the matter of the of Business losses (and their set off 18 and onwards thereafter to the successor Assessment Years that the necessary inquiries and investigation have NOT been carried out during the impugned anner these were to have been carried out. Therefore, the assessee's contention about the non- applicability of the revisionary power u/s 263 of the Act on the facts of this case are not acceptable and are rejected. The matter nce u/s. 79 of the Act of business losses (and their set off if and as applicable) brought forward from 14 in the impugned AY 2017-18. The facts presented by the Department before the assessee show that and Shri Jagdish Prasad Joshi, who held 50% apiece of the shares of the assessee company in the FY 17 apiece while those of their son, Shri Sachin Joshi, who held 0% of the shares in 88.06% in FY 2016- 17. The argument based on facts made here is that from the FY 2015-16 to 17, the percentage share holdings of the 3 Individuals above stood changed from 50%, 50% and 0% to 0.63%, new shareholder Viz. M/s. Solution FZC introduced in holding a shareholding percentage of The statutory position here is that since the shareholding pattern 17, the business losses brought forward from that earlier years should NOT have been so allowed to be carried forward in the AY 2017-18 per the mandate of Section 79 of the Act. Therefore, these brought forward losses would NOT be available for set off against the incomes 18. Also, any portion of these carried forward losses, if determined as available, would not be allowed to be carried forward for set offs against any taxable 20, 2020-21, 2021- Printed from counselvise.com 15. From the above discussions, it is clear that the AO has failed to decide on the matters in reference in consonance with the applicable and binding statutory provisions and legal positions and/or accounting standards and reporting requirements and/or logical and arithmetical inconsistencies. Hence, these matters have been and remain unverified and unexamined by the Assessing Officer (AO) as well as have been and remain unexplained by the assessee during the course of the above stated assessment proceedings for the AY 2017 A.O. is erroneous and prejudicial to the interests of revenue for the reasons as mentioned above. Therefore, action under inder Section Section: Section 263 of the Income Tax Act, 1961 is necessary. 16. Considering the facts and circumstances of the case as detailed above and the applicable and binding judicial ratios and precedents as presented, I hold that the assessment order passed u/s 143(3) r.w.s153A of the Act dated 01.04.2022 by the Assessing Officer is at this time erroneous and prejudicial to the interests of Revenue, within the meaning of Section 263 of the Act, 1961, in that the merits of the impugned matter of the carry forward of business losses from earlier years should not be allowed to be carried forward and set off, if and as applicable, in AY 2017-18 as well as the carry forward of these losses or any part of these to the successor Assessment Years u/s 79 of the Act, have not been correctly and comprehensively examined by the Assessing applicable statutory mandates. Inquiries and investigations that were required to be carried out by the Assessing Officer have not been carried out thereby attracting squarely the applicability of Explanation 2 of Section 263 of the Act. I assessment order passed u/s 143(3) r.w.s. 153A of the Act dated 01.04.2022 for this AY 2017 direction to complete the assessment order de novo afresh after conducting necessary verification and e matters involved including those identified and detailed above being the examination of the allowability of the set offs in this A.Y. 2017-18 of the business losses of Rs. 4,23,00,687/ forward from the earlier years when vie prism of Section 79 of the Act and after affording proper opportunity to the assessee. 4. Before us, the Ld. counsel for the assessee filed a Paper Book containing pages 1 to 102. The Ld. counsel supported the submission made befo Viiking Media and Entertainment Pvt. Ltd ITA No. 3414 & 15. From the above discussions, it is clear that the AO has failed to decide on the matters in reference in consonance with the applicable and binding statutory provisions and legal positions and/or accounting standards and reporting requirements and/or logical and arithmetical inconsistencies. Hence, these matters have been and remain unverified and unexamined by the Assessing Officer (AO) as well as have been and remain unexplained by the assessee during the course of the above stated assessment dings for the AY 2017-18. Thus, the order passed by the A.O. is erroneous and prejudicial to the interests of revenue for the reasons as mentioned above. Therefore, action under inder Section Section: Section 263 of the Income Tax Act, 1961 is necessary. 6. Considering the facts and circumstances of the case as detailed above and the applicable and binding judicial ratios and precedents as presented, I hold that the assessment order passed u/s 143(3) r.w.s153A of the Act dated 01.04.2022 by the fficer is at this time erroneous and prejudicial to the interests of Revenue, within the meaning of Section 263 of the Act, 1961, in that the merits of the impugned matter of the carry forward of business losses from earlier years should not be be carried forward and set off, if and as applicable, in 18 as well as the carry forward of these losses or any part of these to the successor Assessment Years u/s 79 of the Act, have not been correctly and comprehensively examined by the Assessing Officer per the applicable statutory mandates. Inquiries and investigations that were required to be carried out by the Assessing Officer have not been carried out thereby attracting squarely the applicability of Explanation 2 of Section 263 of the Act. I therefore, set aside the assessment order passed u/s 143(3) r.w.s. 153A of the Act dated 01.04.2022 for this AY 2017-18 to the Assessing Officer with a direction to complete the assessment order de novo afresh after conducting necessary verification and enquiries on all of the matters involved including those identified and detailed above being the examination of the allowability of the set offs in this A.Y. 18 of the business losses of Rs. 4,23,00,687/ forward from the earlier years when viewed through the lens and prism of Section 79 of the Act and after affording proper opportunity to the assessee.” Before us, the Ld. counsel for the assessee filed a Paper Book containing pages 1 to 102. The Ld. counsel supported the submission made before the Ld. PCIT. Viiking Media and Entertainment Pvt. Ltd 7 & 3430 to 3433/MUM/2025 15. From the above discussions, it is clear that the AO has failed to decide on the matters in reference in consonance with the applicable and binding statutory provisions and legal positions and/or accounting standards and reporting requirements and/or logical and arithmetical inconsistencies. Hence, these matters have been and remain unverified and unexamined by the Assessing Officer (AO) as well as have been and remain unexplained by the assessee during the course of the above stated assessment 18. Thus, the order passed by the A.O. is erroneous and prejudicial to the interests of revenue for the reasons as mentioned above. Therefore, action under inder Section Section: Section 263 of the Income Tax Act, 1961 is necessary. 6. Considering the facts and circumstances of the case as detailed above and the applicable and binding judicial ratios and precedents as presented, I hold that the assessment order passed u/s 143(3) r.w.s153A of the Act dated 01.04.2022 by the fficer is at this time erroneous and prejudicial to the interests of Revenue, within the meaning of Section 263 of the Act, 1961, in that the merits of the impugned matter of the carry forward of business losses from earlier years should not be be carried forward and set off, if and as applicable, in 18 as well as the carry forward of these losses or any Assessment Years u/s 79 of the Act, have not been correctly and Officer per the applicable statutory mandates. Inquiries and investigations that were required to be carried out by the Assessing Officer have not been carried out thereby attracting squarely the applicability of therefore, set aside the assessment order passed u/s 143(3) r.w.s. 153A of the Act dated 18 to the Assessing Officer with a direction to complete the assessment order de novo afresh after nquiries on all of the matters involved including those identified and detailed above being the examination of the allowability of the set offs in this A.Y. 18 of the business losses of Rs. 4,23,00,687/- carried wed through the lens and prism of Section 79 of the Act and after affording proper Before us, the Ld. counsel for the assessee filed a Paper Book containing pages 1 to 102. The Ld. counsel supported the Printed from counselvise.com 5. We have heard rival submissions of the parties and peru the relevant material the AO’s failure to pursue a query to its logical conclusion renders the assessment \"erroneous and prejudic Section 263. 5.1 In the case, the Ld. PCIT issued show cause notice u/s 263 of the Act for the reason that Assessing Officer had inquiry on the issue of carry forward and set off of the loss of earlier years despite there being change in the shareholding assessee company by 5.2 The Ld. counsel for the assessee referred to notice u/s 142(1) of the Act dated 18.12.2021 book page 30 to 35. On perusal of the said questionnaire, we find that the Assessing Officer had in shareholding and eligibility of the carry forward of the lo the earlier years. The relevant questionnaire is reproduced as under: “3. It is seen from your ITR for the relevant year that during the year under consideration, 100% shareholding has been changed from Shri Jagdish Joshi & Smt. Vidhya Joshi to Shr Solution FZC. Therefore, during the year 100% shareholding of the assessee company has changed. As there is change in shareholding having voting rights exceeding 51%, set earlier years losses are not allowable in provision of Section 79 of the Act. In this regard, you are hereby asked to show cause as to why your claim of carry or set-off of the losses incurred in any year prior to the A.Y. 2017 18 of Rs.45,69,04,080/ of Section 79 of the Act Viiking Media and Entertainment Pvt. Ltd ITA No. 3414 & We have heard rival submissions of the parties and peru the relevant material on record. The core issue before us is whether the AO’s failure to pursue a query to its logical conclusion renders the assessment \"erroneous and prejudicial\" within the meaning of case, the Ld. PCIT issued show cause notice u/s 263 of eason that Assessing Officer had inquiry on the issue of carry forward and set off of the loss of earlier years despite there being change in the shareholding assessee company by more than 50%. The Ld. counsel for the assessee referred to notice u/s 142(1) the Act dated 18.12.2021, a copy which is available on paper book page 30 to 35. On perusal of the said questionnaire, we find sing Officer had asked the assessee regarding change in shareholding and eligibility of the carry forward of the lo the earlier years. The relevant questionnaire is reproduced as 3. It is seen from your ITR for the relevant year that during the year under consideration, 100% shareholding has been changed from Shri Jagdish Joshi & Smt. Vidhya Joshi to Shri Sachiin Joshi & Solution FZC. Therefore, during the year 100% shareholding of the assessee company has changed. As there is change in shareholding having voting rights exceeding 51%, set-off and carry forward of earlier years losses are not allowable in accordance with the provision of Section 79 of the Act. In this regard, you are hereby asked to show cause as to why your claim of carry-forward and / off of the losses incurred in any year prior to the A.Y. 2017 18 of Rs.45,69,04,080/- should not be rejected as per the provision of Section 79 of the Act.” Viiking Media and Entertainment Pvt. Ltd 8 & 3430 to 3433/MUM/2025 We have heard rival submissions of the parties and perused The core issue before us is whether the AO’s failure to pursue a query to its logical conclusion renders ial\" within the meaning of case, the Ld. PCIT issued show cause notice u/s 263 of not carried out inquiry on the issue of carry forward and set off of the loss of earlier years despite there being change in the shareholding of the The Ld. counsel for the assessee referred to notice u/s 142(1) a copy which is available on paper book page 30 to 35. On perusal of the said questionnaire, we find asked the assessee regarding change in shareholding and eligibility of the carry forward of the losses of the earlier years. The relevant questionnaire is reproduced as 3. It is seen from your ITR for the relevant year that during the year under consideration, 100% shareholding has been changed from i Sachiin Joshi & Solution FZC. Therefore, during the year 100% shareholding of the assessee company has changed. As there is change in shareholding off and carry forward of accordance with the provision of Section 79 of the Act. In this regard, you are hereby forward and / off of the losses incurred in any year prior to the A.Y. 2017- be rejected as per the provision Printed from counselvise.com 5.3 The assessee filed a reply of the query letter dated 22.03.2022 which is available on Paper Book page 36. perusal of the Assessee’s reply, we find a conspicuous silence on this specific query. Curiously, despite the Assessee’s failure to respond, the AO proceeded to allow the claim of carry forward of losses. issuance of a query does not constitute an \"inquiry.\" An inquiry is a cognitive process that requires the AO to apply his mind to the response received. Where a specific show issued by the AO but left subsequently ignored by the AO in the final order, it constitutes a classic case of \"non brings the case squarely within the ambit of Section 263, which deems an order to be erron prejudicial if it is passed without making inquiries which \"ought to have been made.\" 5.4 As far as issue on the merit is concerned though the Assessing Officer has filed submission before the Ld. PCIT that case of the assessee is not covered u/s to be examined properly in the light of the evidences not filed before the ld AO the matter to the file of the Assessing Officer for proper verification of the documentary evidence in support thereof and then decide the Viiking Media and Entertainment Pvt. Ltd ITA No. 3414 & The assessee filed a reply of the query letter dated 22.03.2022 which is available on Paper Book page 36. perusal of the Assessee’s reply, we find a conspicuous silence ific query. Curiously, despite the Assessee’s failure to respond, the AO proceeded to allow the claim of carry forward of losses. It is a settled principle of law that the mere issuance of a query does not constitute an \"inquiry.\" An inquiry is a cognitive process that requires the AO to apply his mind to the response received. Where a specific show issued by the AO but left unaddressed by the Assessee and subsequently ignored by the AO in the final order, it constitutes a classic case of \"non-application of mind.\" This brings the case squarely within the ambit of Explanation 2 to , which deems an order to be erron prejudicial if it is passed without making inquiries which \"ought to have been made.\" As far as issue on the merit is concerned though the Assessing Officer has filed submission before the Ld. PCIT that case of the assessee is not covered u/s 79 of the Act but that entire issue need properly in the light of the evidences not filed before the ld AO and therefore, the Ld. CIT(A) has set aside the matter to the file of the Assessing Officer for proper verification documentary evidence in support thereof and then decide the Viiking Media and Entertainment Pvt. Ltd 9 & 3430 to 3433/MUM/2025 The assessee filed a reply of the query letter dated 22.03.2022 However, upon perusal of the Assessee’s reply, we find a conspicuous silence ific query. Curiously, despite the Assessee’s failure to respond, the AO proceeded to allow the claim of carry It is a settled principle of law that the mere issuance of a query does not constitute an \"inquiry.\" An inquiry is a cognitive process that requires the AO to apply his mind to the response received. Where a specific show-cause is unaddressed by the Assessee and subsequently ignored by the AO in the final order, it application of mind.\" This Explanation 2 to , which deems an order to be erroneous and prejudicial if it is passed without making inquiries which As far as issue on the merit is concerned though the Assessing Officer has filed submission before the Ld. PCIT that case of the 79 of the Act but that entire issue need properly in the light of the evidences, which were and therefore, the Ld. CIT(A) has set aside the matter to the file of the Assessing Officer for proper verification documentary evidence in support thereof and then decide the Printed from counselvise.com issue in accordance with law. We do not find any infirmity in the said direction of the Ld. PCIT. 5.5 As far as contention of the Ld. counsel for the assessee that this being unabated assessment incriminating material qua the assessment year under consideration and therefore, Supreme court in the case of Abhisar Buildwell P Ltd 454 ITR 212(SC), the Assessing Officer was not required to make on the issue other than the incriminating relied on the decision of Shark Mines and Minerals pvt ltd 151 taxmann.com 71 (ori) and submitted that the ld PCIT cannot do something that the Assessing Officer could have not in that case the Tribunal set aside the order of the revision order of the Commissioner on the ground that scrutiny was in respect of excess liability shown and disallowance under section 40A(3), was regarding FIFO method of valuation of closing stock adopted by assessee and these were unconnected issues, assessment order could not be held to be erroneous and prejudicial to interest of revenue when Assessing Officer could n issues forming subject matter of limited scrutiny. Tribunal quashing the revision order is affirmed byb the Hon’ble High Court. Thus, ratio of said decision is not applicable over the facts of the case. Viiking Media and Entertainment Pvt. Ltd ITA No. 3414 & issue in accordance with law. We do not find any infirmity in the direction of the Ld. PCIT. As far as contention of the Ld. counsel for the assessee that this being unabated assessment year and there was no incriminating material qua the assessment year under consideration and therefore, following the decision of Hon’ble Supreme court in the case of Abhisar Buildwell P Ltd 454 ITR the Assessing Officer was not required to make on the issue other than the incriminating material, the ld Counsel relied on the decision of Shark Mines and Minerals pvt ltd 151 taxmann.com 71 (ori) and submitted that the ld PCIT cannot do something that the Assessing Officer could have not Tribunal set aside the order of the revision order of the Commissioner on the ground that in instant case limited scrutiny was in respect of excess liability shown and disallowance under section 40A(3), whereas show cause notice under section 263 was regarding FIFO method of valuation of closing stock adopted by assessee and these were unconnected issues, assessment order could not be held to be erroneous and prejudicial to interest of revenue when Assessing Officer could not have travelled beyond issues forming subject matter of limited scrutiny. quashing the revision order is affirmed byb the Hon’ble High Court. Thus, ratio of said decision is not applicable over the Viiking Media and Entertainment Pvt. Ltd 10 & 3430 to 3433/MUM/2025 issue in accordance with law. We do not find any infirmity in the As far as contention of the Ld. counsel for the assessee that there was no incriminating material qua the assessment year under following the decision of Hon’ble Supreme court in the case of Abhisar Buildwell P Ltd 454 ITR the Assessing Officer was not required to make any inquiry material, the ld Counsel relied on the decision of Shark Mines and Minerals pvt ltd 151 taxmann.com 71 (ori) and submitted that the ld PCIT cannot do something that the Assessing Officer could have not have done. But Tribunal set aside the order of the revision order of in instant case limited scrutiny was in respect of excess liability shown and disallowance notice under section 263 was regarding FIFO method of valuation of closing stock adopted by assessee and these were unconnected issues, assessment order could not be held to be erroneous and prejudicial to interest of ot have travelled beyond issues forming subject matter of limited scrutiny. The Order of quashing the revision order is affirmed byb the Hon’ble High Court. Thus, ratio of said decision is not applicable over the Printed from counselvise.com 5.6 The Ld. Departmental Representative (DR) pointed out that in the case lot of material was seized but Assessing Officer has not made any inquiry as to whether any seized material was related the year under consideration or not and therefore, also the order of the Assessing Officer is erroneous in so far as prejudicial to the interest of the Revenue. He submitted that the Assessing Officer has not even verified this aspect incriminating material qua the assessment year of the assessee cannot be decided raise such an objection in the consequent proceedings before the Assessing Officer. The ld PCIT has rejected the contention of the assessee in this regard order, which we have already reproduced above. 5.7 Having considered submission of both parties on this issue, we concur with ld PCIT that the examine existence of seized material qua the assessment year consideration in the light of ratio of Hon’ble Supreme Court in the case of Abhisar Buildwell P Ltd (supra case squarely falls under the Explanation deemed to be erroneous in so far as prejudicial to the interest of Revenue. 5.8 Before us, the Ld. counsel for the assessee also secondary argument brought forward business losses was decided in the original Viiking Media and Entertainment Pvt. Ltd ITA No. 3414 & partmental Representative (DR) pointed out that in the case lot of material was seized but Assessing Officer has not made any inquiry as to whether any seized material was related the year under consideration or not and therefore, also the order of Assessing Officer is erroneous in so far as prejudicial to the interest of the Revenue. He submitted that the Assessing Officer has not even verified this aspect and unless it is established that no incriminating material qua the assessment year exits, of the assessee cannot be decided and the assessee is it liberty to raise such an objection in the consequent proceedings before the The ld PCIT has rejected the contention of the assessee in this regard in paragraphs 10.5 and 10.6 of order, which we have already reproduced above. Having considered submission of both parties on this issue, we concur with ld PCIT that the Assessing officer was required to examine existence of seized material qua the assessment year consideration in the light of ratio of Hon’ble Supreme Court in the case of Abhisar Buildwell P Ltd (supra), which he did not and thus under the Explanation -2 of section 263 and deemed to be erroneous in so far as prejudicial to the interest of Before us, the Ld. counsel for the assessee also that the issue of carry forward and set off of t forward business losses was decided in the original Viiking Media and Entertainment Pvt. Ltd 11 & 3430 to 3433/MUM/2025 partmental Representative (DR) pointed out that in the case lot of material was seized but Assessing Officer has not made any inquiry as to whether any seized material was related to the year under consideration or not and therefore, also the order of Assessing Officer is erroneous in so far as prejudicial to the interest of the Revenue. He submitted that the Assessing Officer has unless it is established that no exits, the objection assessee is it liberty to raise such an objection in the consequent proceedings before the The ld PCIT has rejected the contention of the 10.6 of impugned Having considered submission of both parties on this issue, officer was required to examine existence of seized material qua the assessment year under consideration in the light of ratio of Hon’ble Supreme Court in the , which he did not and thus 2 of section 263 and deemed to be erroneous in so far as prejudicial to the interest of Before us, the Ld. counsel for the assessee also advanced that the issue of carry forward and set off of t forward business losses was decided in the original Printed from counselvise.com assessment order passed on 31.12.2019 and therefore, order of revision u/s 263 of the Act could have been passed within the period of the two years from the end of the relevant order. But since this present order of the revision has been passed on 31.03.2025 therefore, said order on various judicial pronouncement plea was neither raised before the Ld. PCIT nor has it been articulated in the grounds of appeal or by way of additional grounds before this Tribunal. In the absence of a formal challenge or factual foundation laid in the lower proceedings, we refrain from adjudicating upon this limb of the argument. 6. In view of above discussion, we do not find any infirmity in the order of the Ld. PCIT on the issue in dispute and accordingly we uphold the same. 7. The parties are in agreement that the issues in the remaining appeals are identical, involving the same shareholding shifts and Section 79 implications. Therefore, our findings for AY 2017 shall apply mutatis mutandis appeal. 8. Before parting with the matter, we deem it appropriate to place on record that, by order dated imposed costs of ₹ account of its non-compliant conduct. It is noted that Viiking Media and Entertainment Pvt. Ltd ITA No. 3414 & assessment order passed on 31.12.2019 and therefore, order of revision u/s 263 of the Act could have been passed within the period of the two years from the end of the relevant order. But since sent order of the revision has been passed on 31.03.2025 order is barred by limitation. The Ld. counsel relied on various judicial pronouncements on this issue. We note that this plea was neither raised before the Ld. PCIT nor has it been articulated in the grounds of appeal or by way of additional grounds before this Tribunal. In the absence of a formal challenge or factual foundation laid in the lower proceedings, we refrain from adjudicating upon this limb of the argument. above discussion, we do not find any infirmity in the order of the Ld. PCIT on the issue in dispute and accordingly we The parties are in agreement that the issues in the remaining appeals are identical, involving the same shareholding shifts and Section 79 implications. Therefore, our findings for AY 2017 mutatis mutandis to the other assessment years under Before parting with the matter, we deem it appropriate to place on record that, by order dated 6th November, 2025, this Bench had ₹11,000/- in each case on the assessee on compliant conduct. It is noted that Viiking Media and Entertainment Pvt. Ltd 12 & 3430 to 3433/MUM/2025 assessment order passed on 31.12.2019 and therefore, order of revision u/s 263 of the Act could have been passed within the period of the two years from the end of the relevant order. But since sent order of the revision has been passed on 31.03.2025, is barred by limitation. The Ld. counsel relied We note that this plea was neither raised before the Ld. PCIT nor has it been articulated in the grounds of appeal or by way of additional grounds before this Tribunal. In the absence of a formal challenge or factual foundation laid in the lower proceedings, we refrain from above discussion, we do not find any infirmity in the order of the Ld. PCIT on the issue in dispute and accordingly we The parties are in agreement that the issues in the remaining appeals are identical, involving the same shareholding shifts and Section 79 implications. Therefore, our findings for AY 2017-18 to the other assessment years under Before parting with the matter, we deem it appropriate to place , this Bench had on the assessee on compliant conduct. It is noted that the said costs Printed from counselvise.com have since been duly the Hon’ble High Court Legal Services Authority evidencing such payment have been placed on record 9. In the result, all the appeals of the assessee are dismissed. Order pronounced in the open Court on Sd/- (SANDEEP GOSAIN JUDICIAL MEMBER Mumbai; Dated: 20/01/2026 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// Viiking Media and Entertainment Pvt. Ltd ITA No. 3414 & have since been duly deposited by the assessee on 10.11.2025 with the Hon’ble High Court Legal Services Authority, and the evidencing such payment have been placed on record In the result, all the appeals of the assessee are dismissed. ounced in the open Court on 20/01/2026. - Sd/ (SANDEEP GOSAIN) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai Viiking Media and Entertainment Pvt. Ltd 13 & 3430 to 3433/MUM/2025 deposited by the assessee on 10.11.2025 with and the receipts evidencing such payment have been placed on record. In the result, all the appeals of the assessee are dismissed. /01/2026. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER BY ORDER, (Assistant Registrar) ITAT, Mumbai Printed from counselvise.com "