ACIT Vs Ajay Kumar (ITAT Delhi)
AO Cannot Travel Beyond Scope of Section 263 Directions – ITAT Upholds Deletion of Fresh Additions
The Delhi ITAT dismissed the Revenue’s appeal and upheld the CIT(A)’s order deleting additions made by the Assessing Officer while passing order u/s 143(3) r.w.s. 263 in the case of the assessee. The Tribunal held that once the Principal CIT had set aside the original assessment only for limited verification of agricultural income credited to the capital account, the AO could not expand the scope of proceedings and once again estimate business profits or revisit additions already adjudicated in earlier appellate proceedings.
The ITAT noted that the issue relating to estimation of net profit on turnover had already been decided in the original appellate proceedings where the CIT(A) had reduced the profit rate from 8% to 3%. Despite this, the AO again estimated profit at 8% while giving effect to the section 263 order. Similarly, the AO revisited addition u/s 68 relating to ₹49 lakh though that issue was not part of the PCIT’s revision directions and had already been partly deleted in earlier appellate proceedings. The Tribunal held that the AO exceeded the jurisdiction conferred under section 263 by re-examining matters beyond the limited remand directions. Finding no infirmity in the CIT(A)’s order deleting both additions, the ITAT dismissed the Revenue’s appeal in entirety.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal is filed by the revenue against the order of Ld. CIT(A)/NFAC, Delhi dated 28.05.2025 for the A.Y. 2014-15, arising out of the assessment order passed u/s.143(3) r.w.s. 263 of the Act.
