DCIT Vs Ankur Mittal (ITAT Delhi)
AO can’t travel beyond 263 directions: ITAT Delhi upholds deletion of ₹12.12 cr u/s 69C; sustains ₹1.16 lakh u/s 69A
Delhi Tribunal dismissed both the Revenue’s appeal and the assessee’s cross-objection. The Tribunal held that while giving effect to a revision u/s 263, the AO must strictly confine himself to the specific directions issued by the PCIT. In the present case, the PCIT had only directed examination of the applicability of section 40A(3) r/w Rule 6DD and related verifications. However, the AO travelled beyond the mandate and made a massive addition of ₹12.12 crore u/s 69C towards alleged cash purchases. The CIT(A) deleted the said addition, noting that purchases were from farmers through APMC, supported by Form 6R, mandi shulk/vikas shulk payments, and recorded in regular books, and that section 69C was wrongly invoked. The Tribunal affirmed this view, holding that non-compliance with 263 directions renders such additions unsustainable.
On cash deposits, the CIT(A) had examined sources in detail and restricted the addition u/s 69A to ₹1.16 lakh after allowing explained components such as rent receipts, withdrawals, agricultural income and opening cash. The Tribunal found no infirmity and sustained the restricted addition. Consequently, the Revenue’s appeal as well as the assessee’s cross-objection were dismissed.
FULL TEXT OF THE ORDER OF ITAT DELHI
The Revenue has filed the appeal and Assessee has filed the Cross Objection challenging the order dated 23-12-2024 passed by National Faceless Appeal Centre Delhi (in short NFAC) passed assessment order dated 27-03-2023 of the Assessing Officer for A.Y. 2017-18 under the section 143(3) r.w.s 263 of the Income Tax Act, 1961(In short “the Act”).
