ANJU CHOPRA,GURGAON vs. CIT APPEAL, GHAZIABAD

PDF · subscribers
ITA 3772/DEL/2025Status: DisposedITAT Delhi09 September 2026AY 2011-1216 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the AO is permitted to make additions on issues not explicitly stated in the reasons for reopening, but only if the original escaped income forming the basis of reassessment continues to exist. In this case, the AO made an addition on an issue not part of the recorded reasons, and the original basis for reassessment was not substantiated, thus violating principles of natural justice and settled legal principles.

What were the facts?

The Assessing Officer (AO) initiated reassessment proceedings based on information about a cash deposit of Rs. 10,60,000/-. However, the AO ultimately made an addition of Rs. 94,25,720/- without proper notice or opportunity to the assessee, who is a senior citizen with health issues. The assessee contended that the addition was beyond the scope of the reasons recorded for reopening.

What were the issues?

Whether the AO can make additions beyond the scope of the reasons recorded for reassessment, and whether the assessment order passed without proper notice and opportunity violates principles of natural justice.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 144,Section 271(1)(c),Section 69A,Section 151

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH, ‘F’: NEW DELHI

Before: SHRI RAJ KUMAR CHAUHAN

For Appellant: Shri P. C. Yadav, Adv, Shri R K Vashiyh, Adv. and Shri Pankaj Goel, Adv
For Respondent: Ms. Harpreet Kaur Hansra, Sr. DR
Hearing: 23.06.2026Pronounced: 09.09.2026

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH, ‘F’: NEW DELHI BEFORE SHRI RAJ KUMAR CHAUHAN, JUDICIAL MEMBER AND SHRI AMITABH SHUKLA, ACCOUNTANT MEMBER ITA No.3772/Del/2025 [Assessment Year: 2011-12] And ITA No.1532/Del/2026 [Assessment Year: 2011-12] ANJU CHOPRA CIT APPEAL 1605, TOWER K, CGO, COMPLEX-1, THE PALM DRIVE, SEC-66, Vs PURANI HAPUR CHUNGI, GURGAON-122002, GHAZIABAD, HARYANA UTTAR PRADESH-201003 PAN:ADHPC0285B Appellant Respondent Assessee by Shri P. C. Yadav, Adv. Shri R K Vashiyh, Adv. and Shri Pankaj Goel, Adv. Revenue by Ms. Harpreet Kaur Hansra, Sr. DR Date of Hearing 23.06.2026 Date of Pronouncement 09.09.2026 ORDER PER AMITABH SHUKLA, AM,

Both appeals have been preferred by the same assessee against the order dated 12.01.2024 of the Commissioner of Income Tax (Appeals)/ National Faceless Appeal Centre, New Delhi, [hereinafter referred to as ‘ld. CIT(A)’] arising out of assessment order dated 18.12.2018 passed u/s 144 r.w.s. 147 and penalty order dated 12.06.2019 passed u/s 271(1)(c) of the

ITA No.3772/Del/2025 & ITA No.1532/Del/2026 Income Tax Act, 1961 pertaining to Assessment Year 2011-12. The word ‘Act’ herein this order would mean Income Tax Act, 1961.

2.

The Registry has identified a delay of 433 and 683 days in ITA No.3772/Del/2025 and 1532/Del/2026, respectively in filing of these appeals before the tribunal. In its affidavit the assessee, has pleaded that she is a senior citizen lady suffering from several health issues, inter alia, including knee problem, lower back/spinal cord problem and has been under constant medical supervision. As she is not fairly conversant with electronic communication the e-mail of revenue authorities could not be timely attended. It was submitted that the professional also did not timely appraise the appellant of her pending statutory requirements. All these activities contributed to the delay which was neither willful nor wanton. The assessee submitted that there will not be case of any non-compliance now. The Ld. DR did not object to the condonation of delay. We have considered the justification put forth by the assessee and we are satisfied with their adequacy. We are also conscious of the fact that no litigant gains by intentionally delaying its own matters. That being the case, we hereby quote Collector, Land & Acquisition vs. Mst. Katiji & Others (1987) 167 ITR 471 (SC). Accordingly, we hereby condone the delay and proceed to adjudicate this appeal.

Page 2 of 16

ITA No.3772/Del/2025 & ITA No.1532/Del/2026 ITA No.3772/Del/2025

3.

The assessee has raised following revised grounds of appeal in ITA No.3772/Del/2025:-

1.

That on the facts and circumstances of the case, the Ld. CIT (A) has erred in upholding the impugned ex-parte order addition of Rs.94.25.720/- which is exorbitant and arbitrary passed bv Ld. A.O, without affording proper opportunity of being heard, being without service of proper notices, it is erroneous and against the facts and laws and in gross disregard to principles of natural justice. 2. That the reasons recorded for reopening were limited to an alleged escapement of income amounting to Rs. 10,60,000/-as approval taken u/s 151 from the PCIT, however, the Assessing Officer has ultimately made an addition of Rs. 94,25,720/-, which is wholly beyond the scope of the recorded reasons. Such an action is arbitrary, without jurisdiction, and contrary to settled legal principles that reassessment proceedings must be confined to the reasons recorded. 3. That on the facts and circumstances of the case, the Ld. CIT (A) was not justified in upholding the validity of the assessment order passed u/s 144 even though same was passed without issuing mandatory notice and absence of proper service of notices without giving rebuttal opportunity of being heard and is against the natural justice. 4. That It is further submitted that the appellant, being a bed-ridden lady for the last about eight years due to serious health issues in spine, she is unable to move, was genuinelv prevented by sufficient cause from filing the requisite documents and effectively contesting the proceedings. 5. That the impugned orders passed by the learned lower authorities are wholly unsustainable in the eyes of law as the same have been passed ex-parte, proceedings were conducted in violation of the settled principles of natural justice, particularly audi alteram partem. Hence, the impugned orders deserve to be set aside on this ground alone. 6. That the appellant has already moved an application before the learned tribunal seeking permission to lead additional evidence on medical grounds. It is further submitted that no proper and effective service of notice was ever affected upon the appellant. Hence addition may liable to be deleted. 7. That the all the receipts and payment in the bank are completely corroborated with documents filed as additional evidence before the Page 3 of 16

ITA No.3772/Del/2025 & ITA No.1532/Del/2026 Hon'ble Bench. And appellant want to disclosed her income by way of additional evidence. 8. That on the facts and circumstances of the case, the Ld. CIT (A) was not justified in upholding the addition of Rs. 94,25,720/- u/s 69A on the alleged ground of unexplained investment without appreciating the Debit side of the Bank as same amount has been invested in purchase of House as Rs.94,50,000/- in EMAAR MGF Land Ltd. However, the Ld.CIT (A) failed completely to appreciate the same disregarding bank statement on record. 9. That in the absence of any director indirect material or evidence, the presumption regarding alleged cash payment of Rs. 94,25,720/- towards purchase of property and the amount of Rs.94,50,000 of the sale of property, is highly misconceived and based on conjectures and surmises. 10. That the reference to bank statements and material in the absence of any opportunity of cross examination is irrelevant and extraneous and in total disregard to principles of natural justice. 4. The ld. Counsel for the assessee, Shri P.C. Yadav, submitted that the appellant has raised through revised grounds of appeal couple of legal issues which strike at the very root of the matter. Thus, attention was invited to ground of appeal no.2, whereby, a challenge has been raised regarding the disconnect between the reasons recorded for reopening and the re- assessment order passed u/s 147 of the Act.

5.

The ld. Counsel invited our attention to the brief facts of the case. It was submitted that the assessee is an Individual lady aged about 65-year-old and she is deriving income from house property in the impugned year. The AO on the basis of an information from NMS, alleging that the assessee has deposited a cash of Rs 10,60,000/- in her bank account, assumed the jurisdiction of section 148 of the Act. Notice u/s 148 dated 27.03.2018 was issued to the assessee for impugned year. The ld. Assessing Officer Page 4 of 16

ITA No.3772/Del/2025 & ITA No.1532/Del/2026 completed the assessment making an addition of Rs.94,25,720/- through his order dated 18.12.2018. For the purposes of full clarity on the subject, the reasons recorded by the ld. Assessing Officer dated 22.03.2018 are as under:-

Page 5 of 16

ITA No.3772/Del/2025 & ITA No.1532/Del/2026 6. Further, the assessment order u/s 147/144 dated 18.12.2018 is as under:-

Page 6 of 16

ITA No.3772/Del/2025 & ITA No.1532/Del/2026

Page 7 of 16

ITA No.3772/Del/2025 & ITA No.1532/Del/2026

Page 8 of 16

ITA No.3772/Del/2025 & ITA No.1532/Del/2026

7.

The ld. Counsel for the assessee vehemently argued through its revised ground of appeal no.2, that the ld. Assessing Officer has exhibited a total non-application of mind while recording the reasons dated 22.03.2018. It was stated that the appellant had vehemently denied that it had any account in Punjab National Bank referred by the ld. Assessing Officer in his impugned reasons. The ld. Counsel argued that without prejudice to the same even though the ld. Assessing Officer has reproduced reasons in his assessment order, he did not make any addition of the alleged cash deposit amount of Rs.10,60,000/- in the assessment order. The ld. Counsel argued that perusal of the assessment order alludes that there is no even of whimper Page 9 of 16

ITA No.3772/Del/2025 & ITA No.1532/Del/2026 of any mention to the said alleged cash deposit amount of Rs.10,60,000/- for which re-assessment proceedings u/s 147/148 were initiated. The ld. Counsel placing reliance upon judicial precedents argued that it is trite law that an Assessing Officer is required to make addition qua reasons recorded and not of any other amount. It was further alternatively argued that the cash deposit per se cannot assume the character of income. The ld. Counsel invited our attention to decision of Hon’ble Bombay High Court in the case of Jet Airways 331 ITR 236, of Hon’ble Delhi High Court in case of Ranbaxy Laboratories 336 ITR 331 and of Hon’ble Co-ordinate Bench of the Jodhpur Tribunal in the case of Devendra Gupta 97 ITD 581. It was accordingly argued that it has been consistently held in the referred judicial precedents that no addition is permissible on issues which were not part of the original reasons. It was stated that any other item of income can be added only as addendum to the issue which was part of the reasons recorded.

8.

The ld. DR, Ms. Harpreet Kaur Hansra, would like to make us believe on the correctness of the assessment order. Relying upon a report received from the ld. Assessing Officer, it was argued that the addition was made on the basis of information from the I/C Wing of Ghaziabad and also that the assessee had not complied with the statutory notices. It was argued that the addition of Rs.94,25,720/- was based upon the information received from ICICI Bank Ltd. alluding towards investments with EMMAR MGF Land Ltd. Page 10 of 16

ITA No.3772/Del/2025 & ITA No.1532/Del/2026 9. We have heard rival submissions in the light of material placed on records. It is undisputed facts on record that the addition of Rs.94,25,720/- made by the ld. Assessing Officer on account of some information received from the ICICI Bank does not forms part of reasons recorded dated 22.03.2018. It is also an equally undisputed fact on record that the cash deposit of Rs.10,60,000/- which figures in the reasons recorded, do not find any mention in the order u/s 147/148 dated 18.12.2018. We have noted that Hon’ble Bombay High Court in Jet Airways (supra):

“22. We have approached the issue of interpretation that has arisen for decision in these appeals. both as a matter of first principle, based on the language used in s. 147(1) and on the basis of the precedent on the subject. We agree with the submissions which has been urged on behalf of the assessee that s. 147(1) as it stands postulates that upon the formation of a reason to believe that income chargeable to tax has escaped assessment for any assessment vear, the AO may assess or reassess such income "and also" any other income chargeable to tax which comes to his notice subsequently during the proceedings as having escaped assessment. The words "and also" are used in a cumulative and conjunctive sense. To read these words as being in the alternative would be to rewrite the language used by Parliament. Our view has been supported by the background which led to the insertion of Expln. 3 to s. 147. Parliament must be regarded as being aware of the interpretation that was placed on the words "and also" by the Rajasthan High Court in Shri Ram Singh (supra). Parliament has not taken away the basis of that decision. While it is open to Parliament, having regard to the plenitude of its legislative powers to do so, the provisions of s. 147(1) as they stood after the amendment of 1st April, 1989 continue to hold the field. 23. In that view of the matter and for the reasons that we have indicated, we do not regard the decision of the Tribunal in the present case as being in error. The question of law Page 11 of 16

ITA No.3772/Del/2025 & ITA No.1532/Del/2026 shall, accordingly, stand answered against the Revenue and in favour of the assessee. The appeal is, accordingly, dismissed. There shall be no order as to costs.” 10. Further, in the case of Ranbaxy Laboratories, Hon’ble Delhi High Court has held as under:-

“18. We are in complete agreement with the reasoning of the Division Bench of Bombay High Court in the case of Jaganmohan Rao (supra) [sic-Jet Airways (I) Ltd. (supra)]. We may also note that the heading of s. 147 is "Income escaping assessment" and that of s. 148 "Issue of notice where income escaped assessment". Sec. 148 is supplementary and complimentary to s. 147. Sub-s. (2) of s. 148 mandates reasons for issuance of notice by the AO and sub-s. (1) thereof mandates service of notice to the assessee before the AO proceeds to assess, reassess or recompute escaped income. Sec. 147 mandates recording of reasons to believe by the AO that the income chargeable to tax has escaped assessment. All these conditions are required to be fulfilled to assess or reassess the escaped income chargeable to tax. As per Expin. 3 if during the course of these proceedings the AO comes to conclusion that some items have escaped assessment, then notwithstanding that those items were not included in the reasons to believe as recorded for initiation of the proceedings and the notice, he would be competent to make assessment of those items. However, the legislature could not be presumed to have intended to give blanket powers to the AO that on assuming jurisdiction under s. 147 regarding assessment or reassessment of escaped income, he would keep on making roving inquiry and thereby including different items of income not connected or related with the reasons to believe, on the basis of which he assumed jurisdiction. For every new issue coming before AO during the course of proceedings of required to issue a fresh notice under s. 148. assessment or reassessment of escaped income, and which he intends to take into account, he would be 19. In the present case, as is noted above, the AO was satisfied with the justifications given by the assessee regarding the items viz., club fees, gifts and presents and provision for leave encashment, but, however, during the assessment proceedings, he found the deduction under ss. 80HH and 80-l as claimed by the assessee to be not admissible. He consequently while not making additions on those items of club fees, gifts and presents, etc., proceeded to make deductions under ss. 80Hand 80-1 and. accordingly reduced the claim on these accounts.

Page 12 of 16

ITA No.3772/Del/2025 & ITA No.1532/Del/2026 20. The very basis of initiation of proceedings for which reasons to believe were recorded were income escaping assessment in respect of items of club fees, gifts and presents, etc., but the same having not been done, the AO proceeded to reduce the claim of deduction under ss. 80HH and 80-l which as per our discussion was not permissible. Had the AO proceeded not (sic) to make disallowance in respect of the items of club fees, gifts and presents, etc., then in view of our discussion as above, he would have been justified as per Expln. 3 to reduce the claim of deduction under ss. 80HH and 80-1 as well. 21. In view of our above discussions, the Tribunal was right in holding that the AO had the jurisdiction to reassess issues other than the issues in respect of which proceedings are initiated but he was not so justified when the reasons for the initiation of those proceedings ceased to survive. Consequently, we answer the first part of question in affirmative in favour of Revenue and the second part of the question against the Revenue. 22. The present appeal is accordingly allowed.” 11. Similarly, Hon’ble Jodhpur Tribunal in the case of Dr Devender Gupta Vs ITO 97 ITD 581(Jodh) has observed as under:-

“…We are conscious of the elongation of the scope of reassessment by Direct Tax laws (Amendment) Act, 1987, w.e.f. 1st April, 1989. However, we find that s. 147 mandates the basic condition that 'if the AO has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of ss. 148;to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section........ A bare perusal of this section reveals that there is no bar on the powers of the AO to put to" tax 'any other income chargeable to tax which has escaped assessment and which subsequently comes to his notice in the course of proceedings'. However, the important words prefixing are "and also" which succeed to any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of ss. 148 to 153, assess or reassess such income". On a plain reading of the section, it becomes abundantly clear that existence of income for which the AO formed belief to have escaped assessment is precondition for including any other income chargeable to tax escaping assessment and coming to the notice of the AO subsequently in the course of proceedings. Unless and until "such income" as giving reasons to form belief for escaping assessment continues to exist and constitutes the subject-matter of Page 13 of 16

ITA No.3772/Del/2025 & ITA No.1532/Del/2026 assessment unders.147, no "other income" coming to the notice of the AO during the course of proceedings can be roped in. The obvious reason is the distinction in the ambit of regular assessment under s. 143(3) and reassessment under s. 147. Whereas the former section empowers the AO to make assessment when the return is filed under s. 139 or in response to notice unders. 142(1) if he considers it necessary or expedient to ensure that the assessee had not understated income or has not computed excess loss or has not underpaid the tax in any manner, s. 147 envisages the prima facie belief of the AO that income chargeable to tax has escaped assessment/in order to invoke the power unders. 147 he has to form reason to believe for escapement of income. Unless such reasons positively exist, no cognizance can be taken of the provisions enshrined in later sections, as they create the foundation for assuming jurisdiction under s. 147. Coming back to the point in issue, we find that all the reasons recorded by the AO for issuance of notice under s. 148 were non-existent…” 12. Thus, we have noted that the underline conclusion drawn and ratio laid down in the above decision is that whereas an Assessing Officer is authorized to add an amount not referred in the reasons recorded however he can do so only adding such new amount/issue in conjunction with escaped income referred in the reasons recorded and not otherwise. Accordingly, we are of the considered view that in respectful compliance to the cited judicial precedents, the order u/s 147/144 dated 18.12.2018 suffers from the patent mistake of an addition being made on an issue which was not part of the reasons recorded. Consequently, we set-aside and quash the order of lower authorities and allow the revised legal ground of appeal no.2 of the assessee.

13.

As the assessee has succeeded qua revised legal ground of appeal no.2, all other grounds of appeal raised by the assessee both on legal

Page 14 of 16

ITA No.3772/Del/2025 & ITA No.1532/Del/2026 challenges as well as merits of the addition have become academic in nature and hence kept open.

14.

In the result, the appeal of the assessee in ITA No.3772/Del/2025 is allowed.

ITA No.1532/Del/2026

15.

The appeal of the assessee in ITA No.3772/Del/2025 is allowed in respect of quantum addition of Rs.94,25,720/-. It is trite law that when a foundation being assessment order in this case is removed, the superstructure being the penalty order in this case would also not survive., Accordingly, corresponding appeal of the assessee in ITA NO.1532/Del/2026 challenging invocation of penalty u/s 271(1)(c) of the Act is also allowed and the penalty ordered to be deleted.

16.

In the result, the appeal in ITA No.1532/Del/2026 is allowed.

17.

Finally, both appeals of the assessee are allowed.

Order pronounced in the open court on 09th September, 2026.

Sd/- Sd/- [RAJ KUMAR CHAUHAN] [AMITABH SHUKLA] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated:. 09.09.2026 Shekhar Copy forwarded to: 1. Appellant 2. Respondent 3. PCIT Page 15 of 16

ITA No.3772/Del/2025 & ITA No.1532/Del/2026 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi

Page 16 of 16

More judgments on Section 147

All 49,210 judgments and leading authorities on Section 147 →

Recent GST High Court judgments

Search GST case law →