Revisional proceedings under Section 263 of the Income Tax Act cannot be initiated against an assessment order that is void ab initio due to an invalid notice under Section 148 issued by an officer lacking requisite pecuniary jurisdiction.

ORDER

PER AMITABH SHUKLA, AM,

This appeal by the assessee is directed against the order of Principal Commissioner of Income Tax, Delhi-4 [hereinafter referred to as ‘ld. PCIT] dated 10.03.2025 arising out of assessment order dated 15.03.2023 passed under section 147 of the Income Tax Act, 1961, for the Assessment Year 2018-19.

The word ‘Act’ herein this order would mean Income Tax Act, 1961.

2. The assessee has raised following grounds of appeal:-

1. On the facts and circumstances of case and in law, the Id. PCIT - 4, New Delhi erred in initiating proceedings under section 263 of Income Tax Act, 1961 (Act) by wrongly assuming jurisdiction under section 263 of the Act and hence, the order passed by the Ld. CIT under section 263 of Act is bad in law, without jurisdiction and barred by limitation.

2. On the facts and circumstances of case and in law, the ld. PCIT erred in setting aside the assessment and has also erred in holding that the original assessment order passed by the Assessing Officer under section 147 r.w.s 143(3) of Act was erroneous and prejudicial to the interest of the revenue.

3. On the facts and circumstances of case and in law, the directions issued by the Ld. PCIT under section 263 of Act are erroneous, vague, ambiguous and untenable and, therefore the order u/s 263 of the Act passed by the Ld. PCIT is liable to be quashed

4. On the facts and circumstances of the case and in law, the Id. PCIT erred in stating that the assessment passed by the assessing officer was without making inquiries or verification which should have been made.

5. On the facts and circumstances of the case and in law, the various allegations/remarks made/adverse inference drawn by the ld. PCIT are erroneous.

6. On the facts and circumstances of case and in law, the Ld. PCIT erred in mentioning that issue of alleged bogus purchase of Rs. 4,22,74,671/-should be added u/s 69C r.w.s 115BBE instead of section 37 as assessed by the AO.

7. On the facts and circumstances of case and in law, the order passed by PCIT u/s 263 is liable to be quashed as the original assessment order itself is bad in law and without jurisdiction.

3. The principal contest raised by the appellant assessee through the above grounds of appeal is regarding the validity of order under section 263 of the Act dated 10.03.2025 passed by PCIT-4, Delhi. Brief factual matrix of the case as discerned from records is that Return declaring Income of Rs.40,70,350/- was filed by the assessee on 15.10.2018. The case was selected for scrutiny on account of some credible information with the ld. AO received from Investigation Wing, that the assessee had taken accommodation entries in the form of bogus purchases. The ld. AO proceeded to add an amount of Rs.4,22,74,671/- on account of bogus purchase u/s 37 of the Act vide his order u/s 147 r.w.s. 144B, dated 15.03.2023. Subsequently, ld. PCIT-4, Delhi, held the view that the ld. AO should have made addition u/s 69C of the Act and exposed the income to the higher rate of taxation. Consequently, order u/s 263 dated 10.03.2025 was passed setting aside the assessment order dated 15.03.2023 (supra) and issuing directions to ld. AO to treat the amount of Rs.4,22,74,671/- on account of bogus purchase u/s 69C of the Act r.w.s. 115BBE of the Act.

4. Heard the rival parties and perused the material available on record. Before us, the principal argument taken by the ld. Counsel for the assessee on legal grounds is that the ld. PCIT has incorrectly assumed the revisionary jurisdiction under section 263 of the Act. The ld. Counsel has placed on record before us its Return of Income filed dated 15.10.2018 and 22.04.2022 both declaring income of Rs.40,70,349/-. It has been argued that in terms of CBDT Instruction No.01 of 2011, the jurisdiction over its case was rested with a