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Judgment
PER AMITABH SHUKLA, AM
This appeal filed by the Assessee is directed against the order of Ld. Pr. Commissioner of Income Tax-4, New Delhi, dated 27.11.2025 arising out of assessment order dated 26.05.2023 passed under section u/s 263 of the Act for the Assessment Year 2015-16. The word ‘Act’ herein this order would mean Income Tax Act, 1961.
The appellant has raised following grounds of appeal:-
1.That having regard to facts & circumstances of the case, Ld. PCIT has erred in law and on facts in assuming jurisdiction u/s 263 of Income Tax Act, 1961 and has erred in holding the reassessment order dated 26-05-2023 as erroneous as well as prejudicial to the interest of revenue and that too by recording incorrect facts and findings and in violation of principles of natural justice.
2.That having regard to facts & circumstances of the case, Ld. PCIT has erred in law and on facts in setting aside the order passed by the assessing officer u/s 147 dated 26-05-2023 with the direction to pass a fresh order after conducting required enquiries and verification and that too by recording incorrect facts and findings and without observing the principles of natural justice.
3.In any view of the matter and in any case, order passed under section 263 is bad in law and against the facts and circumstances of the case & is barred by limitation.
4.That having regard to the facts and circumstances of the case, Ld. Pr. CIT has erred in law and on facts in assuming jurisdiction u/s 263 which is bad in law inter alia for the reason that the reassessment order passed u/s 147 dated 26.05.2023 which is sought to be revised u/s 263 itself was invalid on various grounds and thus proceedings initiated u/s 263 against the invalid reassessment order is clearly bad in law.
The only issue arising from the above-mentioned grounds of appeal is regarding the action of the Ld. PCIT, Delhi-4, in exercising his revisionary authority u/s 263 vide his order dated 27.11.2025.
Heard rival parties and perused the material available on record.
As per the brief factual matrix, Return of Income declaring income of Rs.6,89,810/- for AY 2015-16 was filed by the assessee on 31.08.2015. Subsequently, notice u/s 148 r.w.s. 147 was issued to the assessee on 21.07.2022. Through the reassessment proceedings, it was premised that the appellant assessee had obtained bogus accommodation entries aggregating to Rs.3,42,47,683/-through transaction pertaining to sale of shares of one M/s Negotium International Trade Ltd., a company identified as penny stock company. The ld. Assessing Officer completed action u/s 143(3) r.w.s. 147 through his order dated 26.05.2023 accepting the returned income of Rs.6,89,810/-. Subsequently, the ld. PCIT-4, Delhi, concluded in his order u/s 263 dated 27.11.2025 that the order dated 26.05.2023 was based upon a case of no enquiries being conducted in assessee’s claim. The ld. PCIT concluded that the said order dated 26.05.2023 was erroneous in so far as it was prejudicial to the interest of the revenue under section 263 and directed the ld. Assessing Officer to re-adjudicate the matter after holding requisite enquiries. Instructions were also issued to the Assessing Officer to also examine the submissions of the assessee that the notice u/s 148 and consequent assessment order is barred and void ab initio in view of the decision of the Hon’ble Apex Court in the case of Rajeev Bansal.
It is the case of the ld. Counsel for the assessee that in view of the decision of the Hon’ble Apex Court in the case of Rajeev Bansal, the notice u/s 148 and consequent assessment order is barred and void ab initio. It has been accordingly argued that a barred assessment cannot be revisited for exercise of any revisionary authority u/s 263. It was accordingly requested that the order u/s 263 be set-aside and quashed as the same does not enjoys mandate of law.
The ld. DR would like to make us belief on the correctness of the order of the ld. PCIT.
The issue that has thus emerged in the present appeal is as to whether the ld. PCIT had the authority to exercise any revisionary authority u/s 263 in respect of an reassessment order which was void ab initio. In this regard, we have noted that this Tribunal in the case of Shri Pankaj Jain in its order in ITA No.1524/DEL/2026 has dealt the controversy regarding maintainability of reassessment proceedings u/s 147/148 for AY 2015-16. It has been noted that the Revenue has itself conceded before the Hon’ble Apex Court during proceedings in the case of Rajeev Bansal that it shall drop all reassessment proceedings u/s 148 for AY 2015-16, where notices u/s 148 were issued after 01.04.2021. Thus, in the said decision it was held
“……2. At the outset, ld. Counsel for the assessee invited our attention to the fact that the order u/s 143(3) r.w.s. 147 dated 24.03.2023 for AY 2015-16 is non-maintainable as the same is based upon notice u/s 148 dated 29.03.2022. The ld. Counsel drew our attention to the decision of Hon’ble Apex Court in the case of Rajeev Bansal submitting that in the impugned case Revenue has unequivocally conceded that no action shall be taken for AY 2015-16 and that all notices issued after 01.04.2021 shall be dropped. The ld. Counsel drew our further attention to the fact that apart from few Co-ordinate Benches of this Tribunal, Hon’ble Delhi High Court in the case of Make Mytrip India Pvt. Ltd., Pratishtha Garg and IBIBO Group Pvt. Ltd., Hon’ble Bombay High Court in the case of Hemant Dwarkanath Zemse, etc. have followed the impugned decisions of Hon’ble Apex Court to quash assessment proceedings for AY 2015-16.
3.The ld. DR placed reliance upon the orders of the lower authorities.
4.We have heard rival submissions in the light of material placed on record. We have noted that the Revenue has indeed conceded before the Hon’ble Apex Court in the case of Shri Rajeev Bansal that it would not be pursuing cases reopened AY 2015-16 in which notice u/s 148 have been issued after 01.04.2021. Relevant part of the judgement of Hon’ble Apex Court in the case of Shri Rajeev Bansal in Civil Appeal No. Civil Appeal No 8629 of 2024 dated 03rd October, 2024 are reproduced hereunder:-
“….19. Mr N Venkataraman, learned Additional Solicitor General of India, made the following submissions on behalf of the Revenue:
a. Parliament enacted TOLA as a free-standing legislation to provide relief and relaxation to both the assesses and the Revenue during the time of COVID-
"......19. TOLA seeks to relax actions and proceedings that could not be completed or complied with within the original time limits specified under the Income Tax Act;
b. Section 149 of the new regime provides three crucial benefits to the assesses: (i) the four-year time limit for all situations has been reduced to three years; (ii) the first proviso to Section 149 ensures that re-assessment for previous assessment years cannot be undertaken beyond six years; and
(iii)the monetary threshold of Rupees fifty lakhs will apply to the re- assessment for previous assessment years;
c. The relaxations provided under Section 3(1) of TOLA apply “notwithstanding anything contained in the specified Act.” Section 3(1), therefore, overrides the time limits for issuing a notice under Section 148 read with Section 149 of the Income Tax Act;
d. TOLA does not extend the life of the old regime. It merely provides a relaxation for the completion or compliance of actions following the procedure laid down under the new regime;
e. The Finance Act 2021 substituted the old regime for re-assessment with a new regime. The first proviso to Section 149 does not expressly bar the application of TOLA. Section 3 of TOLA applies to the entire Income Tax Act, including Sections 149 and 151 of the new regime. Once the first proviso to Section 149(1)(b) is read with TOLA, then all the notices issued between 1 April 2021 and 30 June 2021 pertaining to assessment years 2013-2014, 2014-2015, 2015-2016, 2016-2017, and 2017-2018 will be within the period of limitation as explained in the tabulation below:
Assessment Within 3 Years Expiry of Limitation read Within six Expiry of Limitation Year with TOLA for (2) Years read with TOLA for (4) (1) (2) (3) (4) (5) 2013-2014 31-3-2017 TOLA not applicable 31-3-2020 30-6-2021 2014-2015 31-3-2018 TOLA not applicable 31-3-2021 30-6-2021 2015-2016 31-3-2019 TOLA not applicable 31-3-2022 TOLA not applicable 2016-2017 31-3-2020 30-6-2021 31-3-2023 TOLA not applicable
f. The Revenue concedes that for the assessment year 2015-16, all notices issued on or after 1 April 2021 will have to be dropped as they will not fall for completion during the period prescribed under TOLA….”
5.We have further noted that the impugned decision of Hon’ble Apex Court have been followed by few Co-ordinate Benches of this Tribunal, Hon’ble jurisdictional High Court in its decision in the case of, Make Mytrip India Pvt. Ltd., Pratishtha Garg and IBIBO Group Pvt. Ltd., Hon’ble Bombay High Court in the case of Hemant Dwarkanath Zemse, etc. We have noted from order of Ld. AO u/s 147/144 dated 24.03.2023 on page-2 that notice u/s 148 was issued to the appellant on 29.03.2022. Accordingly, as the facts of the case are identical to decision of Hon’ble Apex Court in the case of Rajiv Bansal(supra) and therefore in respectful compliance to the impugned decision, we quash the notice u/s 148 dated 29.03.2022 and consequent assessment order u/s 147 r.w.s. 144 dated 24.03.2022.
6.In the result, the appeal of the assessee is allowed…..”
It is an undisputed fact on records that the ld. PCIT-4, Delhi exercised his revisionary power u/s 263 for appellant assessee pertaining to re-assessment year 2015-16. It is also a facts on records that in the said case, notice u/s 148 was issued after 01.04.2021. Thus, in the light of above facts, the appellant’s case for year under consideration fell within the purview of decision in the case of Rajeev Bansal(supra). It goes on to establish therefore that no reassessment was permissible in the case of the appellant for AY 2015-16 qua notice u/s 148 issued after 01.04.2021. In the present case, these facts were brought to the knowledge of the Ld. PCIT. In the instant case, as the reassessment proceedings per se for AY 2015-16 was not legally permissible, there cannot be a case of exercising authority u/s 263 for the said assessment year. Accordingly, we are of the considered view that the ld. PCIT did not had any revisionary authority u/s 263 for AY 2015-16. We are also of the considered view that he ought to have decided this legal issue himself and not passed on the responsibility to the ld. Assessing Officer. Consequently, we set-aside and quash the order u/s 263 of the Act dated 27.11.2025 passed by ld. PCIT-4, Delhi. The appeal of the assessee is accordingly allowed.
In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 29th July, 2026.