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Judgment
Per Raj Kumar Chauhan, Judicial Member:
The appeal of the asse ssee is d irected against the order dated 19.03 .202 5 of ld. PCIT-1, Delhi passed u/ s 263 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) wherein asse ssment order dated 21.03.2023 was held as erroneous so far as found to be prejudicial to the interest of the Revenue and accord ing ly AO is directed to invoke provision of section 69C of the Act o n the addition made in the assessment order on account o f bogus purchases amo unting to Rs.24,08,172/- and apply special tax rate of 60% in accordance with the provisio n of sectio n 115BBE of the Act.
The assessee has filed an application seeking condonation of delay of 192 days in filing the present appeal. The contents of the applicatio n are reproduced as under:
We have consid ered the contents of the condonation application and the submissions made by the ld. AR. We find that the assesse e has satisfactorily explained the reasons for the delay. In view of the principles laid down by the Hon'ble Supreme Co urt in Collector, Land Acquisition vs. Mst. Katiji & Ors. (1987) 167 ITR 471 (SC), wherein it has been held that a liberal approach should be adopted while considering applications for condonation of delay to substantial justice, we are satisfied that the assessee has shown sufficient cause. Accordingly, the delay of 192 days in filing the instant appeal is condoned in the larger interest of justice, and the appeal is admitted for ad judication on merits.
Facts in brief as culled out from the orders author ities below are that the asse ssee co mpany filed orig inal return of income on 01.10.2018 declaring total income of Rs.10,39,370/-for A.Y. 2018-19. The case was reopened u/s 147 of the Act on the basis of information rece ived through insight Portal noticing that the assesse e has made bogus purchase s to the tune of Rs.24,08,172/-. It was stated that the information pertains to a show-cause issued by DGGI, G urugram w ith regard to the bogus purchases amounting to Rs.24 ,08,172/- and vide show-cause notice dated 15.03.2022 of the Act u/s 14 8A(b) of the Act. The assessee was asked to explain why notice u/s 148 of the Act should not be issued for A.Y . 2018-19. According ly, notice u/s 148 of the Act date d 30.03.2022 was issued and served through IT BA on the e-mail registered with the Department and in response to the notice u/s 148 of the Act, the assessee filed return on 08.0 4.2022 declaring total income of Rs.10,39,370/-. Vario us no tices as mentioned in Para 2.1 of the assessme nt order were issue d on various dates, to which only part reply was filed. T he ld. AO proceeded to make additio n on account of bogus purchases to the tune of Rs.24,08,172/- in respect of alleged purchases made from RCI Industries and Technolog ies Ltd. on the ground that the assessee has no t furnished the delivery challans regarding the physical receipt of the goods from RCI Industrie s and Technologies Ltd. It was further observed that the assessee has failed to submit acknow ledged receipt of the delivery goods from the books of account of RCI Ind ustries and Techno log ies Ltd. regarding the actual tr ansactio ns carried out with the assessee company. The ld. AO further observed that the entity from which the transactions were carried out by the assessee were no t fo und engaged in any genuine b usiness activity and the notice issued u/s 133(6) of the Act to RCI Industries and Technologies Ltd. was not comp lied and not responded and no response was filed by RCI Industr ies to the no tice u/s 133(6) of the Act. Hence, the ld. Assessing Officer treated the transaction of the assessee with RCI Ind ustries and Techno logies Ltd. as not genuine and accordingly passed the assessment order u/s 143(3) r.w.s. 147 r.w.s. 144B of the Act.
The assessee/appellant has challenged the said order before the ld. CIT(A) in appeal u/s 250 of the Act. However, in the meantime, the ld. PCIT, on perusal of the assessment record, has noticed that bogus purchases to the tune of Rs.24,08,172/- made by the assessee from RCI Industries and Technologies Ltd. were disallo wed and added to the total income because the assessee has failed to discharge its onus of submitting suppo rting documents in support of said purchases. The ld. PCIT was o f the opinion that, in v iew of the non-responsiveness of the seller company, the transaction should have been added as unexplained expenditure u/s 69C of the Act and sho uld have been taxed under special provision of Section 115BBE of the Act. It is therefore observed by ld. P CIT that the mistake has resulted into short levy of tax to the extent of Rs. 19,84,897/- including interest. Accordingly, show-cause notice u/s 263 of the Act was issued dated 18.10.2024 to the assessee who has replied the same vide reply dated 07.11.2024. In the reply, the assessee has explained the transaction in detail, stating that it has purchased copper wire rod weighing 5906 kg from RCI Industries and Technologies Ltd. It was further explained that the copper wire rod was d ispatched by RCI Industries and Technolog ies Ltd. from its manufacturing unit at 10/128/IV, Vishnu Gali, Vishwas Nagar, Delhi to our manufacturing unit situated at G-950, DSIDC Indl. Area, Narela, Delhi and the material was transported within Delhi thro ugh local tr ansport. It was further stated that the freight was paid by RCI Industries and Technolog ies Ltd. as per agreed terms and the payment was made against aforesaid invoice to RC I Industries and Techno logies Ltd. through RTG S on 17.07.2017 fro m bank account maintained in Bank of Ind ia for Rs.28,41,642/-. It is further explained that the GST input credit of Rs.4,33 ,470/- was duly allow ed to the assessee by GST Department and no mismatch occurred in that regard because the GST retur ns filed by the asse ssee were duly accepted. The assessee has also produced the certificate from RCI Industries and Techno logie s Ltd. in respect of genuineness of the transaction. It was therefore submitted that the whole allegation of bogus purchases was based on suspicion and surmises and conjectures and are not supported by any material evidence. The assessee has fur ther claimed that it has filed ledger account of RCI Ind ustries and Technologies Ltd. appearing in their books of account for financial year 2017-18, which was d uly confirmed by RCI Industries and Techno logy Ltd. and as such, the genuine ness and correctne ss of the transaction has been established. It was further stated that in the absence of any response having no t been received from RCI Industries and Technology Ltd., in pur suance to notice u/s 133(6) of the Act, the transaction with the assessee cannot be doubted as the said fact does not make the transaction as a bogus transaction. Despite the onus having been discharged by the asse ssee with regard to genuineness of the tr ansaction, as narrated above, the ld. PCIT has set aside the assessment order by making the following ob servation/directions contained in para 7.9 & 8 as under:
“7 .9 Ther efor e, i n view of above facts and circumstances, in as muc h as AO has not menti oned i n the ass essme nt order, as to under which pr ovisions of the Act, the said additi on of Rs. 24,08,172/- was made, a nd t her eafte r has not applied t he correct rate of tax of 60% o n such additi on as specified under provisions of S .115BBE of t he Act, but has applied normal tax rate of just 30%, t he assessment order passed by AO is held as erroneous so far as it is obser ved to be prej udicial to the i nterest of the Revenue. Accor di ngly, the AO is directed t o i nvo ke provisions of s .69C of t he Act, on the addition made on acco unt of bogus purchas es, amounti ng to Rs.24,08,172/- and apply s pecial tax rate of 60% in accordance wi th the provisions of S.115BBE read with s. 69C of the Act, on the addition m ade on a ccount of bogus purc has es , amounting t o Rs .24,08,172/-.
8.In li ght of the provisions o f S ecti on 263 of t he I T Act, the above order u/s 147 read wi th s ecti on 144B of the Inc ome tax Act dated 21-03 -2023, for A Y 2018-19, is held to be errone ous , i n so far as i t is prej udicial to the inte rest of revenue unde r the ambit of the provisions of section 263 of the I. T. Act, on t he issues hi ghli ght ed in this order abov e. The Assessing Officer is di rect ed to pass an order u/s 263 r.w.s. 147 and 144B of the I. T. Act, 1961 and tak e nec essar y reme dial action o n vari ous issues i nvolved, a s di re cted i n the or der and sp ecific ally in para 7.9 of the or der. ”
Aggrieved by the impug ned order, the assesse e is in appeal before the Tribunal and has raised the following grounds of appeal:
“1 . On the basis of facts and circumstances of the case, the order passed under section 263 of the Income Tax Act, 1961 (“the Act”) by the learned Pri ncipal Commissi o ner of Income Tax (Central), Del hi -1 (“PC IT”) is bad both i n the eye of law and fac ts.
2.On the fac ts and circumstances of t he case, the revision order passed under s ec tion 263 by the l earned PCIT holding t hat the r e-assess ment or der passe d under section 147 r.w.s. 144B of the Act by t he Ass essment Unit, Income Tax Departm ent, Nati onal faceless assessment centr e (“herei naf ter referred to as AO”) as err oneous and prejudicial to the i nterest of the r evenue, is illegal, wit hout jurisdicti on and void-ab-i nitio and liable to be quashed.
3.On the fac ts and circumstances of t he case, the revision order passed under s ecti on 263 of t he Act by the lear ned PCIT is illegal and invali d as t he reass essme nt order passed under section 147 r.w. s. 144B of the Act is neit her 'erro neous ' nor 'prejudicial to t he i nter est of t he rev enue.
4.O n t he facts and circumstanc es of the case, t he revision order passed under s ecti on 263 of t he Act by the lear ned PCIT is illegal and invali d as t he reass essme nt order passed under section 147 r.w. s. 144B of the Act is itself is illegal, invalid, wi thout jurisdiction and liable to be quas hed.
5.O n t he facts and circumstanc es of the case, t he lear ned PCIT has erred bot h on facts a nd i n law in passi ng the order des pite t he reassessment order passed under sec tion 147 r.w.s. 144B of the Act b y t he AO do not fall within t he requi rements of Explanati on 2 to Secti on 263 of the Act and hence said order c annot be dee med to be erroneous so far as it is prejudicial to t he inte rest of the rev enue.
6.O n t he facts and circumstanc es of the case, t he lear ned PCIT has erred bot h on facts a nd i n law in passi ng an order unde r secti o n 263 o f the Act s ol ely for the purpose of substituting his own opi nion on the concer ned issues in place of the v iew adopte d by t he lear ned AO after independent application of mind.
7.O n t he facts and circumstanc es of the case, t he lear ned PCIT has erred bot h on facts a nd i n law in ignoring the s ettled la w that wher e two views a re possible and the AO has ta ken one view which the PCIT does not agr ee, it cannot b e treated as a n e rroneous order or prejudici al to the i nteres ts of the Revenue.
8.On the fac ts and circumstances of t he case, the revision order passed under Secti on 263 of the Act by t he lear ned PC IT i s illegal a nd without j urisdiction, as reass essme nt order passed unde r section 147 r.w.s. 1446 sought to be revised by the PCIT is subject matter of the appeal filed before the Hon’ble CIT(A ).
9.On the fac ts and circumstances of t he case, the lear ned PCIT has erred bot h on facts a nd i n law in directi ng the Ass essing of fi cer to invoke the provisions of section 69C of the Act on the disall owance of purchases alre ady made i n the reassess ment order passed under section 147 r.w.s. 144B of the Act and apply the special rat e of 60% in accordanc e wit h the provisio ns of s ection 115BBE r.w.s. 69C of the Act.
10.On the fac ts and circumstances of t he case, the lear ned PCIT has erred bot h on facts a nd i n law in invoki ng revi sionary j urisdiction and directi ng the A O to revise the rea ss essme nt order despi te the fact that the provisions of s ection 69C are not applicable to the said tr ansaction and accordi ngly, pro visio ns of s ection 115BBE are also not applicable.
11.On the fac ts and circumstances of t he case, the lear ned PCIT has erred bot h on facts a nd i n law in passi ng t he order despite the f act that t he purchases made by the asse ssee are genui ne and have been m ade duri ng the normal course of business and therefore additi on made by the AO i n the r eas se ssment order is itself is illegal , invalid and unsustai nabl e and liable to be del eted.
12.The a ppell ant craves leaves to add, amend or alt er any of t he grounds .”
On perusal of the grounds of appeal, we have noticed that the assessee/appellant has challenged the impugned order on three issues enumerated as under:
Whether the ld. PCIT has illegally assumed the jurisdiction u/s 263 of the Act, which is contrary to the settled legal princip les and legal precedents therein.
Whether the ld. PCIT has erred both in facts and in law ignoring the se ttled law that w here two views are possible on a debatable issue and the AO has taken one possible view which the PCIT has not agree and as such the assessment order canno t be treated as erroneous or prejudicial to the interest of the Revenue.
Whether the ld. PCIT has erred in directing the Assessing Officer to invoke the provisions of section 69C of the Act on the disallowance of the purchases already made in the re-assessme nt o rder passed u/s 147 r.w.s. 144B of the Act and to apply the special rate of 60 % in accordance with provision o f section 115 BBE r.w .s. 69C of the Act.
Regarding issue No. 1, During the argument, the ld. AR for the assessee/appellant has raised a legal challeng e to invoking the power of the ld . PC IT u/s 263 on the gro und that the ld. PCIT has issued the direction contr ary to the contents and spirit of the notice issued u/s 263 of the Act because the direction issued were beyond the scope o f the notice and as such the assessee has been prejudiced as principle of natural justice has not been followed by the ld. PCIT . It is further argued that the impugned addition by the Assessing Officer has already been challenged before the ld. C IT(A) in appeal and invoking the jur isdiction u/s 263 of the Act is co ntrary to the settled legal principle and legal precedents there in.
Invocation of Explanation 2 to Section 263 is invalid in the absence of specific mention of the same in the show-cause notice u/s 263 placed at page 168-169 of the paper book as nothing is mentioned in the said notice with r egard to the Explanatio n 2 or alleging any lack of enquiry by the ld. AO. The ld. AR has relied upon various cases in that regard, including ITAT De lhi in Ashok Kumar Jain vs. PCIT , Ghaziabad, 2025(6) TMI 648, order dated 06.06 .2025, alo ng with ITAT Delhi in Chrysilla Builders & Developers Pvt. Ltd . vs. PCIT-2, New Delhi, 2025(5) TMI 705 , order dated 07 .05.2025.
It is further argued that the impugned order is not legally sustainable on the ground that the alleged addition made in the assessment order has already been challenged in appeal by the assessee and the issue on the basis of which sectio n 263 jurisdiction has been exercised is directly subject matter o f the appeal before the ld. CIT(A) . Therefore, the revisional proceedings u/s 263 were barred by virtue of Clause (c) of Explanatio n 1 to section 263 of the Act. In support of these arguments, the ld. AR for applicant has re lied upon the case of Mumbai Tribunal in MP Trading C ompany vs. PCIT, Mumbai-20, 2026(8) TMI 478, order dated 04 .08.2026. The observatio n of the ld. co-ordinate bench co ntained in paras 34, 35, 36 & 37 are re levant and extracted below as under:
“34.We obse rve tha t i dentical issue came up for consideratio n before the Ho n'ble Madras Hi gh C our t in the case of R enuka Philip (Smt ) v. ITO ( 2018) 409 ITR 567 (Mad.), wherei n the H on'bl e High Court held as under:
“21.With rega rd t o the me rits of t he case, the l earned counsel for t he as sessee referr ed to a decision of t he Division B ench of this Court i n D r. Smt. P.K. V asa nthi Rangarajan v. CIT [2012) 23 taxmann.com 299/209 Taxman 628 (Mad.), wher ei n, the Ho n'ble Division Bench held that t here is no i nhibiti on i n the assess ee claiming the benefit of invest ment made i n four flats thereby gai ni ng the benefit under Secti on 54 F of t he Act. The Court took not e of t he deci sion in TA No. 656 of 2005 dated 04.01.2012. However, we are not exami ni ng the m erits of the matter at this j unct ure since, we are only called upon to ans wer t he Substantial Question of Law with regar d t o t he assumpti on of j uri sdiction of the Commissioner under Secti on 263 of the Act. The power under S ecti on 263 of the Act i s not exercisable under certain circumstances. In this re gard, we refer t o Secti on 263(1) explanation 1(c), whic h reads as follows:
"R evision of order s prej udicial t o r evenue 263(1 )... (a) to (b)** (c ) Where any order r efe rr ed to in this s ub-s ecti on and passed by the Ass essi ng Offic er had b een t he subject matter of any appeal [filed on or before or after the 1st day of June, 1988], the powe rs of t he Commissi o ner under t his Sub-s ec tion shall ext end and shall be deemed al ways to have extended to such matt ers as had not b een considered and decided i n suc h appeal."
22.The above explanation mak es it clear that when the appeal is pending before the Commissio ner, t he exerci se of jurisdi ction under Se ctio n 263 of t he Act i s barr ed. T he Co mmi ssioner i n the order dat ed 14.03.2012 state s that the appeal pertai ns to t he claim made by the ass essee under Secti on 54 of t he Act and it has got nothi ng to do with t he order pass ed by the Assessi ng Officer under S ecti on 54F of the Act . The said findi ng rendered by the Commi ssioner is wholly unsustai nable, si nce the assess ee went on appeal agai nst t he r e-assess ment or der dat ed 31.12.2009 stati ng t hat his claim for deduction under Secti on 54 of the Act s houl d b e accepted.
23.Ther efore, in t he p rocess of consideri ng as t o what relie f the assessee is entitled to, the Assessi ng Offic er held that the assess ee is enti tled to claim deduc ti on under S ecti on 54F of t he Ac t and assi gned cer tai n reasons for that. Therefore, the lar ger issue was pendi ng before t he Commissio ner of Appeals, and i n such circums tances, the Commis sioner could not exerci se power under Section 263 of the Act on acco unt of the statutory bar. Theref ore, on this ground also, the ass umption of jurisdiction unde r Secti on 263 of the Act was wholly err oneous.”
35.Similarly, in the cas e of CIT vs. Vam Resorts and Ho tels Pvt. Ltd. [418 ITR 723], the Hon' bl e Allahabad High C ourt held as under:
“As, clause (c) of Explanati on 1 to section 263 of t he Act provides t hat when an appeal is pending before the Commissioner , the exercise of jurisdiction under section 263 of t he Act by the Commi ssi oner of Income-tax is barred. Thus, i n the prese nt cas e, t he Commissi o ner of Income-tax wrongly exer cised jurisdictio n under section 263 of the Act by re mandi ng bac k the matter t o t he assessi ng authority on March 25, 2013, while t he appe al was decided by t he Commissi o ner of Inc ome-tax (Appeals) on June 5, 2013. Thus, t he order pass ed by the Income tax Appellat e Tribunal does not suffer fr om any irre gulari ty and needs no interferenc e. ”
36.Similar view has been take n by t he Mumbai Bench of the Tribunal in the cas e of Cupi d Diamonds (P) Ltd . vs. DCIT i n ITA N o.478/Mum/2025 dated 11.08.2025, to whic h one of us (Hon’ble AM) was a par ty .
37.The ratio of the above decisions squar ely applies to the facts of t he assessee's cas e. The lar ger issue as to whether t he purc has es made by the assesse e fr om M/s Mahade v Enter pri ses and M/s Tirupa ti Trade rs w ere genui ne or not, or whet her the profit el eme nt embe dded therei n should be estimat ed at 25%, was already t he subject ma tter of appeal before the Ld. CIT(A). Ther efore, si nc e the lar ger issue was pendi ng before t he Ld. CIT(A), we hold that the Ld. PCIT was barred from invoki ng revisi onal juris diction by vi rtue of claus e (c) of Explanati on 1 to sec tion 263 of the Act. The refore, we hold t hat to the ext ent of treati ng the assess ment or der as erroneous and pr ejudicial to t he i nterests of t he Revenue i n r espect of purc has es made f rom M/s Mahadev Ente rpri ses and M/s Tirupati Trad ers , the order of the Ld. PCIT is bad i n la w.”
Similarly, in the case in hand, the assessee has already filed appeal before the ld. CIT(A) challenging the treating of the purchases made by the assessee as bogus purchases. Since, the said issue, whether the addition on account of bogus purchases is valid or no t is pending consideration before the ld. CIT(A), therefore, the jurisdiction of the ld. PCIT, in our opinio n, is barred by the provisio n of Clause (c) of Explanation 1 to Section 263 of the Act. Hence, the issue No . 1 is according ly decided in favour of the assessee and against the department.
Regarding issue No. 2, it is an admitted fact that the additio n if to be made on account of bogus purchases in the factual matr ix of the case in hand is a debatable issue and the ld. Assessing Officer has take n a possible v iew by making additio n on account of bogus purchases. Therefore, the ld. PCIT is not legally entitled to substitute his o wn vie w and take a differe nt view from the AO . In support of argument, ld. AR has relied upon the case o f Malabar Industrial Co mpany Ltd . vs. CIT 2000(2) TMI 10 (SC), wherein it was held that where two views are possib le and the ITO has taken one view with which the Commissioner does no t agree, it cannot be treated as an erroneous order prejudicial to the interest of the Revenue unless the view taken by the ITO is unsustainable in law. In the case in hand, the view adopted by the AO is we ll within the permissible views recognized by judicial authorities and therefore cannot be ter med as erroneo us, therefore, the impugned action of the ld. PCIT invoking section 2 63 is nothing but an attempt to substitute the views taken by the ITO w hich is not permissible in law . T herefore, we are of the considered opinio n that the ld. PCIT by invoking jurisdiction u/s 263 of the Act has attempted to substitute his own views to the possible view taken by the Assessing Officer in the given facts of the case, w hich o therwise cannot be termed as illegal or unlawful view and is thus a legally permissible view taken after due consideration of the fact and circumstances by the ld Assessing Officer. Issue No. 2 is accordingly decided in favour of the assessee and against the Revenue.
Regarding issue No . 3, the ld. AR has submitted that the ld. PCIT exercised the jurisd iction illegally by directing the Assessing Officer to invoke the provision of section 69C r.w.s. 115BBE of the Act and further to apply special rate of 60% for charg ing the tax against the alleged bogus purchases involved in the case in hand. T he ld. AR submitted that the provisio ns of section 69C are not attracted in the case of the assessee because the necessary conditio ns of invoking section 69C are not fulfilled. It is sub mitted that the assessee has already placed on record the copy of the purchase invoice from RCI Industries & Technologies Ltd . (paper book page 49), copy of the bank statement reflecting amount demitted (paper book page 50-51), copy of GST Registration Certificate of RCI Industries & Techno log ies Ltd. (paper book page 52-58) and copy of the master Data of RCI Industries & Technologies Ltd. (paper book page 57). It is further submitte d that the purchases have been duly reflected in the P&L account o f the assessee and the refore, the expenditure on purchases made by the assessee b earing sour ce of such expenditure is also explained, there fore, sectio n 69C cannot be invoked. It is therefore, submitted that the expenditure made by the assessee on the purchases made from RCI Industries & Technologies Ltd . is duly explaine d and the so urces of the such expenditure s is also explained and has not been do ubted during the assessment proceedings and as such issuing direction to the Assessing Officer to invoke section 69C of the Act in the case of the assessee is per se illegal and contrary to the statutory provision as we ll as settled legal precedents. The ld. AR relied the case of Delhi Tribunal in ITA No .226/Del/2025 order dated 30.01.2026 in support of his arguments wherein the case of Garg Acrylics Ltd. Vs. DCIT in ITA No. 2562/Del/2023 dated 30.09.2024 was referred and relied. It was held in the above case that w here the transaction has been duly accounted in the books of account of the assessee and the payments made therein were sourced out of accounted source of asse ssee company, then invoking of section 6 9C of the act was not permissible for making addition on acco unt of bogus purchases. It is further argued that ld. DR had highly relied upon the case of N.K. Proteins Ltd. Vs. DCIT (2016) 72 taxmann.co m 289 along with Bombay High Court decisio n in the case of Kanak Impex India Pvt. Ltd. in IT A No. 791/2021 order dated 03.03.2025 and submitted that the said legal precedents has decided in favour of the Reve nue for making 1 00% addition of bogus purchases and further any addition made on account bogus purchase will fall within the scope of section 69C of the Act. In that reg ard, the ld. AR argued that the case of N. K. Industries as well as Kanak Impex India Pvt. Ltd. (supra) were distinguishab le on facts because in N. K. Industries Ltd., the facts were no t similar to the facts of the case in hand because in the case in hand, the impugne d assessment or der is subject matter of appeal before the ld. CIT(A). And for that reason, the usurping of the jurisdiction by the PCIT u/s 263 of the Act is not legal as it is against the settled legal precedents. Regarding the case of Kanak Imp acts India Pvt. Ltd. (supra) , it is sub mitted that the said case has been distinguished on facts by various decisions o f the co-ordinate Benches o f the Bombay Tribunal because in the said case before the Hon'ble Bombay High Court, it was an ex-parte proceedings where assessee has not appeared to conte st the appeal. And for that reason, the said decisio n is also distinguishable o n facts and is not applicable to the case in hand. The argume nts ad vanced by the ld. AR in that regard, in our opinion, are forceful and legally acceptable because both the cases, N.K. Industrie s Ltd. (supra) and Kanak Impex India (supra) are distinguishable on facts from the facts of the case in hand. According ly, we hold that issuing direction u/s 263 to the AO to invoke section 69C r.w.s. 115BBE of the Act despite pende ncy of the appeal against the alleged addition made by the AO is no t legally permissible in the eyes of law. The issue No. 3 is accordingly decided in favour of the assessee and against the Revenue .
In the view of our above observation and decision on the issues involved in the case, the appeal of the assessee is allowed and the impugned order u/s 263 is set aside.
In the result, the appeal of the assessee is allowed.