Ardent Steels Private Limited Vs PCIT (ITAT Raipur)
ITAT Quashes 263 Order as PCIT Withheld Adverse Material & Ignored Evidence of Genuine Purchases
Assessment for A.Y. 2020-21 was completed u/s 143(3) r.w.s. 144B making only a minor disallowance of cess. PCIT later invoked revision u/s 263 alleging that Assessee’s purchases of ₹3.94 crore from M/s B B Medicare Pvt. Ltd. were bogus, treating the supplier as a “shell company” based on a SEBI list & assuming its iron ore trading licence was suspended. PCIT held AO failed to make proper enquiry & set aside the assessment.
Assessee demonstrated that all details—purchase invoices, ledger, bank statements, transit passes, quantitative records, MCA master data & valid licence (active 06.08.2018 to 05.08.2023)—were already on record & even submitted before PCIT. Despite this, PCIT:
- Relied on external information (SEBI list, licence suspension data, wrong location of supplier),
- Did not provide this adverse material to Assessee despite specific request,
- Ignored Assessee’s evidences proving genuineness of purchases,
- Drew conclusions on mere presumption.
ITAT held that using undisclosed material & not confronting the Assessee violates principles of natural justice (audi alteram partem) as laid down by SC in Amitabh Bachchan & Chhattisgarh HC in Sun & Sun Inframetric (2024) 460 ITR 258. PCIT’s action of proceeding on external data without examining evidence on record made the 263 order illegal, bad in law & unsustainable.
