PRABHAT NARAIN AND COMPANY,BUDAUN, UTTAR PRADESH vs. ITO 2(3), BUDAUN, BUDAUN, UTTAR PRADESH

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ITA 7138/DEL/2026Status: DisposedITAT Delhi02 September 2026AY 2018-193 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that reassessment proceedings are not sustainable if no additions are made on the grounds that led to the reopening. Therefore, the impugned reassessment order was quashed.

What were the facts?

The Assessing Officer initiated reassessment proceedings under Section 147 based on cash deposits and interest income. However, the final assessment order only involved a disallowance under Section 40A(3) and made no additions related to the original reasons for reopening.

What were the issues?

The primary issue was the validity of the reassessment proceedings initiated by the Assessing Officer. The Tribunal examined whether the assessment order addressed the reasons for reopening.

Which sections of the Income-tax Act were involved?

Section 147,Section 40A(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’, NEW DELHI

Before: Sh. Satbeer Singh Godara

Hearing: 02.09.2026Pronounced: 02.09.2026

1 7138/Del/2026 Prabhat Narain and Company

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘SMC’, NEW DELHI Before Sh. Satbeer Singh Godara, Judicial Member

ITA No.7138/Del/2026 : Asstt. Year : 2018-19 Vs ITO Prabhat Narain And Company, Budaun 2 (3) Uttar Pradesh Budaun (APPELLANT) (RESPONDENT) PAN No.AAJFP4424E

Assessee by: None Revenue by : Sh. Manoj Kumar, Sr. DR Date of Hearing: 02.09.2026 Date of Pronouncement: 02.09.2026

ORDER This assessee’s appeal for Assessment Year, arises against the NFAC, Delhi DIN & order No. ITBA /NFAC /S /250 /2025-26/1083678129(1) dated 15.12.2025, in proceedings u/s 147 of the Income Tax Act, 1961 (in short “the Act”). Case called twice. None appears at the assessee’s behest. He is accordingly proceeded ex-parte. 3. For the reasons stated in the assesses’s condonation averments, delay of 123 days in filing of instant appeal is

2 7138/Del/2026 Prabhat Narain and Company

hereby condoned in light of Collector, Land & Acquisition vs. Mst. Katiji & Others (1987) 167 ITR 471 (SC).

4.

The assessee/ appellant raised the first and foremost issue of the validity of the impugned reopening itself. A perusal of the case records reveals with the able assistance coming from the Revenue side that the learned Assessing Officer had initiated Section 148/147 proceedings against the assessee vide notice issued on 25.03.2022 regarding his cash deposits of Rs.1,27,00,000/-in M/s interest received of Rs.26,000/- whereas his assessment order passed on 20.03.2023 ended up in involving section 40A(3) disallowance of Rs.24,32,989/- only.

5.

This being the clinching factual position, I hereby quote Ranbaxy Laboratories Ltd. vs. Union of India (2011) 336 ITR 136 (Del.) and CIT vs. Jet Airways (India) Ltd. (2011) 331 ITR 236 (Bom.) to conclude that once the learned assessing authority has not made any addition qua the above sole reason of reopening, the same is not sustainable in law. Quashed accordingly in very terms therefore.

3 7138/Del/2026 Prabhat Narain and Company

6.

This assessee’s appeal is allowed in above terms.

Order Pronounced in the Open Court on 02/09/2026.

Sd/- (Satbeer Singh Godara) Judicial Member Dated: 21/09/2026 *NEHA, Sr. PS* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR

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