IN THE INCOME TAX APPELLATE TRIBUNAL “E” BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY, VICE PRESIDENT AND SHRI ARUN KHODPIA, ACCOUNTANT MEMBER (Assessment Year: 2020-21)

Hampi Expressways Pvt. Ltd., Principal Commissioner of

2^nd Floor, Eliphinstone Building, 10 Income Tax -1, Veer Nariman Road, Fort, Vs. Room No.330, 3^rd Floor, Aayakar Mumbai-400001 Bhavan, Maharshi Karve Road, Mumbai (Appellant) : (Respondent)

PAN NO. AADCH 6031L Appellant by : Shri Nitesh Joshi, Advocate, Shri Amey Wagle, CA Respondent by : Shri Ritesh Misra, CIT- DR (Appellant) (Respondent)

Date of Hearing : 25.09.2025 Date of Pronouncement : 25.09.2025 O R D E R Per Saktijit Dey, Vice President:

Present appeal, at the instance of the assessee, assails the order dated

31.03.2025 passed under Section (u/s.) 263 of the Income Tax Act, 1961 (hereinafter called the ‘Act’) by learned Principal Commissioner of Income Tax (PCIT), Mumbai pertaining to Assessment Year (AY) 2020-21.

2. At the outset, learned counsel appearing for the assessee submitted that the appeal can be decided on the limited issue raised in Ground No.2, which reads as under:

“2. The learned Commissioner of Income Tax erred in passing an order under section 263 without issuing any notice to the appellant.”

3. Briefly the facts are, assessee is a resident corporate entity engaged in construction and maintenance of roads, rails, bridges, tunnels, ports, harbour, runways etc. For the assessment year under dispute, assessee filed its return of income on 03.02.2021, declaring NIL income. The return of income so filed was selected for scrutiny and the Assessing Officer (AO) completed the assessment u/s. 143(3) r.w.s. 144B of the Act vide order dated 23.09.2022 accepting the income returned by the assessee. Post completion of assessment, it came to the notice of learned PCIT that in assessee’s case in A.Y. 2022-23, the Revenue audit has raised an objection with regard to allowance of assessee’s claim of depreciation on the investments made by the assessee in pursuance to Service Concession Agreement (SCA), whereunder the assessee was required to build, operate and transfer road with Toll collection rights over the concession period. Since similar claim made by the assessee in the impugned assessment year was allowed in the assessment, learned PCIT was of the view that the assessment order is erroneous and prejudicial to the interest of Revenue. Accordingly, he invoked jurisdiction u/s. 263 of the Act and passed the impugned order, setting aside the assessment order, with a direction to the AO to examine the authenticity of depreciation claimed by the assessee on the SCA.

4. Before us, learned counsel appearing for the assessee submitted that learned PCIT has passed the order u/s. 263 of the Act without issuing a show cause notice and without even providing an opportunity of hearing as mandated under sub section (1) of Section 263 of the Act.

5. Drawing our attention to sub-section 2 of Section 263 of the Act, he submitted, since, the two year period was going to expire on 31.03.2025, only for the purpose of saving limitation, learned PCIT has passed the order u/s. 263 of the Act without following the statutory mandate. Thus, he submitted, the order being without jurisdiction, should be quashed. In support, he relied upon the decision of the Hon’ble Delhi High Court in the case ‘Tulsi Tracom (P) Ltd. vs. CIT’ [2017] 86 taxmann.com 35 (Delhi).

6. Learned Departmental Representative (DR) furnished a copy of report dated 17.09.2025 received from the Office of PCIT-1, Mumbai, and submitted that before the order u/s. 263 of the Act was passed, no show cause notice was issued to the assessee. However, he submitted, non-issuance of show cause notice is a mere irregularity, which can be cured by setting aside the matter to the PCIT for passing a fresh order after complying with the principles of natural justice.

7. We have considered rival submissions and perused materials on record. We have applied our mind to the judicial prec