ZOLIJNS DESIGNS PRIVATE LIMITED,DELHI vs. DCIT, NEW DELHI

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ITA 1622/DEL/2026Status: HeardITAT Delhi07 August 2026AY 2016-176 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 the reopening of assessment was vitiated by non-application of mind and assumption of jurisdiction on incorrect facts. The AO failed to examine the underlying material and consider the assessee's objections, making the reassessment proceedings unsustainable.

What were the facts?

The Assessing Officer (AO) reopened the assessment based on information from an 'insight portal' which indicated potential escapement of income. The AO aggregated two figures from the portal to arrive at Rs. 2,48,00,000/- as escaped income, despite the assessee pointing out factual errors and providing their own figures.

What were the issues?

Whether the reopening of assessment was valid when based on factually incorrect information and without proper application of mind by the Assessing Officer.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 148A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH, DELHI

Before: SHRI ANUBHAV SHARMA&

Hearing: 25.06.2026Pronounced: 07.08.2026

P a g e | 1 ITA No.1622/Del/2026 Zolijns Designs Pvt. Ltd. (AY: 2016-17) IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, DELHI BEFORE SHRI ANUBHAV SHARMA, JUDICIAL MEMBER & SHRI AMITABH SHUKLA, ACCOUNTANT MEMBER ITA No.1622/Del/2026 (Assessment Year: 2016-17) Zolijns Designs Private Vs. DCIT, Central Circle- 6 Limited, C-19, Jhandewalan Extension Nizamuddin West, New Delhi – 110055 New Delhi - 110013 स्थायीलेखासं./जीआइआरसं./PAN/GIR No: AAACZ3743L Appellant .. Respondent Appellant by : Sh. Rajat Garg, CA Respondent by : Sh. Balkrishan Gopal, Sr. DR Date of Hearing 25.06.2026 Date of Pronouncement 07.08.2026 O R D E R PER ANUBHAV SHARMA, JM:

This appeal preferred by the assessee against the order dated 17.12.2025 of Ld. Commissioner of Income Tax (Appeals)-24, New Delhi (hereinafter referred to as the First Appellate Authority or ‘the ld. FAA’ for short) in DIN & Order No: ITBA/APL/M/250/2025-26/1083767384(1) arising out of the assessment order dated 12.03.2025 u/s 147 of the Income

P a g e | 2 ITA No.1622/Del/2026 Zolijns Designs Pvt. Ltd. (AY: 2016-17) Tax Act, 1961 (hereinafter referred to as ‘the Act’) passed by DCIT, CC-6, New Delhi, for AY: 2016-17.

2.

On hearing both sides we find that assesse has not pressed ground No. 1.1 & 1.2 and vide ground No.2.1 assessee has challenged the assumption of jurisdiction by questioning the manner in which the jurisdiction was assumed by ld. Assessing Officer u/s 148 of the Act by recording reasons which were not on the basis of any independent inquiry and non-application of mind.

3.

In this context our attention was drawn to the fact that on the basis of information received from insight portal the case of assesse were opened and at page No. 1-2 and page No. 3-4 assessee has provided the copies of insight portal information dated 22.03.2023 and it shows that information was downloaded by two different ID by the same assessing officer and the information mentioned of two amounts one of Rs.1,41,00,000/- and other Rs.1, 07,00,000/-. At page 21-22 appellant has provided copy of notice under clause (b) of Section 148A of the Act along with annexure which forms the basis of reopening and the alleged reasons for reopening and we find that the allegation has been made of assesse receiving cash/cheques

P a g e | 3 ITA No.1622/Del/2026 Zolijns Designs Pvt. Ltd. (AY: 2016-17) amounting to Rs.2,48,00,000/- for the construction of house of Ms. Madhu Dawar and this amount was considered to be an escapement of income.

4.

It appears that the same AO who had downloaded the information from insight portal has clubbed the two values of Rs.1,41,00,000/- and Rs.1,07,00,000/- to arrive at the figure of Rs.2,48,00,000/- as escapement income while in fact it was only one of the information which was relevant. The same certainly shows non application of mind to the material on record and non-judicious approach to the issue of re-opening.

5.

We then find that assesse had responded to the notice and detailed reply was given copy of which is available at page No. 29 to 36 of the paper book and in same assesse had specifically contended that this escapement of alleged Rs.2,48,00,000/- is not supported by information relied. Assessee had stated that amount of Rs.1,28,55,232/- were received during the Financial Year 2015-16 out of which an amount of Rs.45,50,357/- was received in cash which has been recorded in the books of accounts and no other amounts was received. This discrepancy was pointed out on the basis of information from insight portal as made available to the assesse.

6.

We find that thereafter in the assessment order it is recorded that the reply of the assesse to notice u/s 148A(b) of the Act was perused and

P a g e | 4 ITA No.1622/Del/2026 Zolijns Designs Pvt. Ltd. (AY: 2016-17) examined and thereafter the proceedings were dropped on 11.04.2023 after taking prior approval of the specified authority as the case of assesse was covered under the provisions of Explanation 2 sub-clause (iv) of Section 148 of the Act. However, again instead, notice u/s 148 dt. 13.04.2023 was issued and the reasons recorded once again proceeded on the basis that income amounting to Rs. 2,48,00,000/ - had escaped assessment. Thus, despite the factual error having been specifically pointed out by the Appellant, the ld. AO proceeded to reopen the assessment on the very same incorrect premise. These facts firmly establish that the ld. AO neither examined the underlying material nor considered the objections filed by the Appellant before forming the belief of escapement of income. Since the figure of Rs. 2,48,00,000/-neither emerges from the excel sheet nor from the information supplied by the Investigation Wing, the reassessment proceedings are vitiated by non-application of mind and assumption of jurisdiction on incorrect facts. It is further pertinent to note that even as per the reassessment order ultimately passed, the addition made for the year under consideration amounts only to Rs. 1,07,00,000/-. Thus, neither the figure of Rs. 2,48,00,000/- adopted by the AO nor the figure of Rs. 1,41,00,000/-appearing in the Investigation Wing information pertains to the amount ultimately assessed for the year under consideration, which itself

P a g e | 5 ITA No.1622/Del/2026 Zolijns Designs Pvt. Ltd. (AY: 2016-17) demonstrates that the very foundation of the reopening was based on unverified and incorrect facts.

7.

Reliance is rightly placed by ld. Counsel, upon Paranjape Schemes (Construction) Ltd. VS. DCIT [2024] 160 taxmann.com 730 (Bom.), wherein the Hon'ble Bombay High Court held that where reopening is founded upon factually incorrect information and the AO proceeds without verifying the correctness thereof, the assumption of jurisdiction is unsustainable. Reliance is also placed upon CIT vs. Suren International Pvt. Ltd. [2013] 357 ITR 24 (Del.), wherein the Hon'ble Delhi High Court held that reassessment proceedings initiated on the basis of incorrect and non- existent facts are liable to be quashed. Similar principles have been reiterated in Pr. CIT vs. Meenakshi Overseas Pvt. Ltd. [2017] 395 ITR 677 (Del.), where reopening based on unverified.

8.

In the light of aforesaid we are inclined to sustain the corresponding ground. The appeal is allowed and the impugned order is quashed.

Order pronounced in the open court on 07.08.2026

Sd/- Sd/- (Amitabh Shukla) (Anubhav Sharma) ACCOUNTANT MEMBER JUDICIAL MEMBER

P a g e | 6 ITA No.1622/Del/2026 Zolijns Designs Pvt. Ltd. (AY: 2016-17)

Dated 07.08.2026 Rohit, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR

ITAT NEW DELHI

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