JASWANT SINGH RATHORE,BALOTRA vs. ITO, BALOTRA

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ITA 415/JODH/2025Status: DisposedITAT Jodhpur07 August 2026AY 2016-176 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the reopening of assessment under section 147 was invalid as it was based on a mere change of opinion. The issue regarding receipts was already examined and accepted during the original assessment.

What were the facts?

The assessee's return for AY 2016-17 was accepted under section 143(3). Later, the AO reopened the assessment under section 147 based on information that actual receipts were much higher than declared. The AO added back estimated profits, which was partially reduced by the CIT(A).

What were the issues?

Whether the reopening of assessment under Section 147 was valid when the issue was already examined during the original assessment under Section 143(3)?

Which sections of the Income-tax Act were involved?

Section 147,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, JODHPUR BENCH, JODHPUR

For Appellant: Shri Rajendra Jain (Advocate) and Smt. Raksha Birla CA, (Physically)
For Respondent: Ms. Nidhi Nair, Addl. CIT-DR

PER: SHRI SAKTIJIT DEY; V.P. :

This is an appeal by the assessee against order dated 17-03-2025 passed by National Faceless Appeal Centre (NFAC), for the Assessment Year 2016-17.

2.

In the grounds raised, the assessee has challenged the validity of reopening of assessment as also the addition of Rs.39,26,388/-.

3 Briefly, the facts are, the assessee is a resident individual. For the assessment year under dispute, assessee filed his return of income on

2 ITA No. 415 /Jodh/2025 (Assessment Year: 2016-17) 31.08.2016, declaring income of Rs.6,35,620/-. Assessee's case was selected for scrutiny, and assessment under section 143(3) of the Act was completed, accepting the return of income. Subsequently, based on information received that as against actual receipts of Rs.6,84,86,924/-, the assessee has shown receipts of Rs.30,47,120/-, the Assessing Officer reopened the assessment under section 147 of the Income Tax Act, 1961 (in short ‘the Act’). In course of assessment proceedings, the Assessing Officer called upon the assessee to explain why the receipts of Rs.6,54,39,804/- should not be brought to tax. In response, the assessee submitted that the receipts referred to by the Assessing Officer were not his income, hence cannot be taxed at his hands. The Assessing Officer, however, did not accept the contention of the assessee. Being of the view that the actual receipts of the assessee are to the tune of Rs.6,54,39,804/- , he estimated profit at 8% and added back an amount of Rs.52,35,184/-. The assessee challenged the aforesaid addition before the first appellate authority.

4.

After considering submissions of the assessee in the context of facts and materials on record, the first appellate authority granted partial relief to the assessee by estimating profit at 6% as against 8%. Thus, the addition was reduced to Rs.39,26,388/-.

3 ITA No. 415 /Jodh/2025 (Assessment Year: 2016-17) 5. Before us, learned counsel appearing for the assessee submitted that the assessment having been reopened on a mere change of opinion is invalid. He submitted, at the time of original assessment, complete details were not only filed, but the Assessing Officer made full enquiry. In this context he drew our attention to notices issued under section 143(2) of the Act and 143(1) of the Act in course of original assessment proceeding. Thus, he submitted, the Assessing Officer at the time of original assessment having fully enquired into the issue and accepted the claim of the assessee, reopening of assessment on very same issue is illegal and invalid.

6.

Learned Departmental Representative (DR) relied upon the observations of Assessing Officer and learned First Appellate Authority.

7.

We have considered rival submissions and perused the materials on record. At the outset, we propose to deal with the legal issue challenging the validity of reopening of assessment under section 147 of the Act. Admittedly, the Assessing Officer has reopened the assessment under section 147 of the Act alleging escapement of income due to non-disclosure of receipts of Rs.6,54,39,804/-. In this context, it needs to be observed that assessment in case of the assessee was originally completed under section 143(3) of the Act

4 ITA No. 415 /Jodh/2025 (Assessment Year: 2016-17) vide order dated 12.11.2018. The materials on record reveal that assessee’s case was originally selected for limited scrutiny to examine the following:

“Whether contract receipt/fees have been correctly offered for tax.”

8.

In the annexure attached to notice issued 142(1) of the Act on 16-10- 2018, the Assessing Officer had directed the assessee to furnish the following:

“Please described your nature of business and furnish explanation supported with details & documents regarding receipt u/s. 194C (as per 26AS) are more than the receipts shown in the ITR and also explain whether contract receipt/fees have been correctly offered for tax.”

9.

In reply to the query raised, the assessee had explained the nature of his business, stating that he merely arranges the transporters and acts as an intermediary and recipient. The assessee collects freight on behalf of the truck owners and pays it back to the truck owners. Similarly, assessee collects water pollution charges on behalf of the collecting agency and pays back to them. In the said reply, the assessee has furnished the freight account for the year ended 31.03.2016, which demonstrates that the assessee has shown the receipt of Rs.6,54,39,804/- and the payments made towards water pollution cess, motor freight, unloading charges, etc. Thus, as can be seen from the aforesaid facts and materials placed on record, the issue on which the

5 ITA No. 415 /Jodh/2025 (Assessment Year: 2016-17) assessment was reopened was fully enquired into and examined at the time of original assessment, and after accepting assessee's submissions, assessment was completed under section 143(3) of the Act. Thus, in our view, the reopening of assessment under section 147 of the Act, in the facts of the present appeal, is based on a mere change of opinion. Accordingly, we hold that the initiation of proceedings under section 147 of the Act is invalid. Hence, the impugned assessment orders need to be quashed. Accordingly, we do so. Resultantly, the order of the first appellate authority is set aside. Since we have allowed the legal ground, the other grounds are kept open.

10.

In the result, appeal is allowed as indicated above.

Order pronounced in open court on 07/08/2026.

Sd/- Sd/- (Saktijit Dey) (Makarand Vasant Mahadeokar) Accountant Member Vice President

Dated : 07/08/ 2026. AKS/- True Copy

6 ITA No. 415 /Jodh/2025 (Assessment Year: 2016-17)

Copies to : (1) The appellant. (2) The respondent. (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File

BY ORDER,

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