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IN THE INCOME-TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT

BEFORE MS. SUCHITRA RAGHUNATH KAMBLE, JUDICIAL MEMBER &

SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER

आयकर अपील स.ं /ITA No.812/SRT/2025

Assessment Year: 2017-18

(Hybrid hearing)

Nanalal Jewellers, Vs. PCIT,

Mota Bazar, Dist- Navsari, Valsad

Gujarat - 396445

èथायीलेखासं./जीआइआरसं./PAN/GIR No: AACFN0542L

(अपीलाथ(cid:334)/Appellant) ((cid:366)(cid:529)थ(cid:334) /Respondent)

Appellant by Shri Darshit J Naik, CA

Respondent by Shri Ajay Uke, Sr. DR

Date of Hearing 20/11/2025

Date of Pronouncement 31/12/2025

आदेश / O R D E R

PER BIJAYANANDA PRUSETH, AM:

This appeal by the assessee emanates from the order passed under

section 263 of the Income-tax Act, 1961 (in short, ‘the Act’), dated 30.07.2025,

by the learned Principal Commissioner of Income-tax, Valsad [in short ld. PCIT’]

for the assessment year (AY) 2017-18.

2. The grounds of appeal raised by the assessee are as under:

“1. The order passed u/s 263 is barred by limitation and deserves to be quashed.

2. The learned Pr.CIT erred in passing an order u/s 263 when the jurisdictional

conditions were not satisfied.

3. The learned Pr.CIT erred in assuming jurisdiction u/s 263 even though a

detailed inquiry was carried out by the Assessing Officer on the issue pertaining

to the cash deposits made by the appellant company during the year under

consideration.

4. The learned Pr.CIT erred in assuming jurisdiction u/s 263 merely on the basis

of a difference of opinion with the Assessing Office.

ITA No.812/SRT/2025/AY 2017-18

Nanalal Jewellers

5. On the facts and in the circumstances of the case as well as law on the

subject, the learned Pr.CIT has erred in invoking this powers/authority under

section 263 of the Income Tax Act, 1961, and the order passed by him u/s 263 is

without jurisdiction.

6. On the facts and in the circumstances of the case as well as law on the

subject, the learned Pr.CIT has failed to appreciate that the assessment order

passed by the ACIT, Navsari Circle, Navasari (hereinafter referred to as the AO)

was neither “erroneous” nor “prejudicial to the interest of the revenue” and thus

the very invocation of power under section 263 is wholly illegal and beyond

jurisdiction.

7. On the facts and in the circumstances of the case as well as law on the

subject, the learned Pr.CIT has erred in invoking powers under section 263 and

passing order holding the assessment order to be “erroneous” and “prejudicial”

without even justifying, which of the two phraseology used in section2 63 is

applicable and as to how the order of assessment is “erroneous” causing “loss to

the revenue”.

8. On the facts and in the circumstances of the case as well as law on the

subject, the learned Pr.CIT has erred in holding that the AO has failed to make

proper enquiry into the facts of the case and on that ground in further holding

that the assessment order dated 31/12/2019, passed by the AO u/s 143(3), is

erroneous as well as prejudicial to the interest of revenue and in cancelling the

assessment with the direction to the AO to reframe the assessment.

9. On the facts and in the circumstances of the case as well as law on the

subject, the learned Pr.CIT has failed to appreciate that assessment order dated

31/12/2019, as had been passed by the AO in accordance with the law and the

learned CIT could not have held the said order to be “erroneous and prejudicial

to the interest of revenue” within the meaning of Section 263.

10. On the facts and in the circumstances of the case as well as law on the

subject. In response to the notice under section 263, the appellant had made

detailed submissions on the issue that had been taken up in the notice/s 263 and

for the reason that the learned Pr.CIT has failed to carry out his statutory

obligation to deal with the decide such issue, the order under section2 63 stands

wholly vitiated and the same deserves to be quashed.

11. For various reasons and on different grounds, the order u/s 263 passed by

the Pr.CIT is bad in fact and law of the case and requires to