IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH, NAGPUR BEFORE SHRI NARENDER KUMAR CHOUDHRY, JUDICIAL MEMBER AND SHRI K.M. ROY, ACCOUNTANT, MEMBER (Assessment Year : 2018–19) Nirmalkumar Agrawal (HUF)

Shiv Sadan, Main Road ……………. Appellant Tumsar 441 912 PAN – AADHN0157N v/s Income Tax Officer ……………. Respondent Ward–2, Bhandara Assessee by : Shri Rohan Loya a/w Shri Rajesh Loya Revenue by : Shri Pankaj Kumar Date of Hearing – 23/06/2025 Date of Order – 22/09/2025

O R D E R

PER K.M. ROY, A.M.

The captioned appeal is filed by the assessee against the impugned order dated 26/03/2025, passed u/s 263 of the Income Tax Act, 1961 (for short "the Act") by the learned Principal Commissioner of Income Tax, Nagpur–2 [“the learned PCIT”] for the assessment year 2018–19.

2. The assessee has raised the following grounds:–

“(1) That the notice issued u/s 263 and the order of the Learned Pr. Commissioner of Income Tax, PCIT, Nagpur-2 passed u/s. 263 are bad in law and wrong on facts. On the facts and circumstances of the case, the learned PCIT erred in holding that assessment order passed by the AO u/s. 147 r.w.s. 144B of the IT Act, 1961 is erroneous and prejudicial to the interest of the revenue and therefore the action of the Pr. CIT, Nagpur-2 is illegal and liable to be quashed.

(2) That the learned Pr. CIT erred in law and on facts in setting aside the order of the AO passed u/s. 147 r.w.s. 144B of the Income Tax Act, 1961 with a direction to conduct enquiry and passed a fresh assessment order denovo. On the facts and circumstances of the case, the Pr. CIT erred in disregarding the facts available on assessment record that sufficient enquiry was conducted by AO by obtaining various documents which have been verified and on such basis income is assessed.

(3) That the learned AO passed the assessment order u/s.147 r.w.s.144B after conducting full enquiries and verification of record and after satisfying has passed the assessment order. On the facts available on record the learned Pr. CIT erred in holding that AO did not make enquiries and verification required in respect of financial transaction mentioned in the order u/s.263.

(4) That the learned Pr. CIT erred in law and on facts in assuming jurisdiction u/s 263 on the basis of reappraisal of evidence and holding the assessment order passed u/s 147 r.w.s. 144B of the IT Act as erroneous and prejudicial to the interest of revenue. On the facts and circumstances of the case, once the AO has taken a view while framing assessment order, revisionary powers cannot be exercised for adopting another view.

(5) That the learned Pr. CIT erred in law and on facts in not making enquiry on the submissions made before her and passing order u/s.263. On the facts and circumstances of the case, the order passed u/s.263 is therefore not in accordance with law.

(6) That for any other ground with kind permission of your honour at the time of hearing of appeal.”

3. Facts in Brief:– For the year under consideration, the assessee filed his return of income under section 139(1) of the Act on 25.08.2018 disclosing total income of ` ` 2,60,860, which includes income from capital gain and income from other sources. The Finance Intelligence Unit (FIU) had credible information which indicated that Navdurga Advisory Private Limited (NAPL) was a shell company and consequent transactions with this company were suspicious or sham entries. It was also conveyed that high value transactions were undertaken by the assessee with NAPL as it had transferred ` 40,00,000, to the assessee during the assessment year under consideration. On considering the reply of the assessee pursuant to the notice issued under section 148(b) of the Act, proceedings under section 148 were initiated vide order dated 31/03/2022. Thereafter, assessment order under section 147 r/w section 144B of the Act was passed on 24/03/2023, assessing total income at ` 4,28,820, stating that this was the returned income and income computed under section 143(1)(a) of the