NKC Projects Private Limited Vs PCIT (ITAT Delhi)
ITAT Delhi strikes down PCIT’s 263 order – NKC Projects gets full relief; revision beyond show-cause held invalid
NKC Projects Pvt. Ltd. appealed against the revision order passed u/s 263 by PCIT setting aside its scrutiny assessment u/s 143(3) r.w.s. 144B for AY 2020-21.
AO had examined all major aspects – stock valuation, TDS, unsecured loans, ICDS, & expenses — before accepting the returned income. PCIT initially issued notice on four points (creditors, bad debts, PF/ESI, & increase in expenses) but in the final order introduced new issues like ICDS non-compliance, stock difference, refund mismatch, & non-filer purchases, which were never in the show-cause notice.
Tribunal held that PCIT had exceeded jurisdiction by including fresh issues without giving opportunity to Assessee. Following Shail Gas Pvt. Ltd. & Delhi HC precedents, it ruled that 263 proceedings must be confined strictly to matters in the notice.
On merits too, AO had made detailed verifications of creditors & PF/ESI payments; his view was plausible & not erroneous. New allegations based on later data could not justify revision.
Result: Order u/s 263 quashed. AO’s scrutiny found proper & reasoned; PCIT’s revision held beyond jurisdiction & not prejudicial to Revenue.
