Nirmalkumar Agrawal (HUF) Vs ITO (ITAT Nagpur)
Distinction Between No Enquiry & Inadequate Enquiry- Loan Verified by AO Through Bank & Financials – Tribunal Bars PCIT’s Revision
Assessee filed return declaring income of ₹2,60,860. Based on FIU information that Navdurga Advisory Pvt. Ltd. (NAPL) was a shell company, assessment was reopened u/s 147. AO after enquiry accepted that Assessee had taken a genuine loan of ₹20 lakh (not ₹40 lakh as alleged by FIU) from NAPL, verified through bank statements, confirmations & financials, & completed assessment at returned income.
PCIT initiated revision u/s 263, holding that AO had failed to conduct proper enquiries regarding the ₹40 lakh transaction, wrongly relied on another case, & incorrectly mentioned assessed income. PCIT set aside the reassessment directing AO to conduct de novo assessment.
Before Tribunal, Assessee contended that AO had issued multiple notices u/s 142(1), 133(6), obtained bank statements, ledger accounts, financials of NAPL, confirmations & replies from NAPL,& after due verification accepted the loan as genuine. It was argued that revision u/s 263 cannot be invoked merely for adopting another view, especially when AO’s enquiry was detailed & substantiated. Reliance was placed on SC ruling in PCIT v. V-Con Integrated Solutions Pvt. Ltd. (2025) & other precedents distinguishing “lack of enquiry” from “inadequate enquiry”.
