PAWAN KUMAR KHANDELWAL,GIRIDIH vs. ITO, GIRIDIH

Shri Devesh Poddar, ld AR appeared for the assessee and Shri Sandipan Khan, ld Sr DR appeared for the revenue.

The assessee has raised additional ground common for all the three assessment years, which reads as follows:

On receipt of the additional ground, same was put to ld Sr DR for the response of the revenue vide order sheet recording dated 6.1.2026, same reads as follows:

The assessee has also filed written submission on 08.01.2026, which reads as follows:

The revenue had filed its response on 15.4.2026, which reads as follows:

As the response of the revenue was found to be not covering the issue, which has been raised by the assessee, the Revenue was directed to file a fresh report on 9.7.2026 vide order sheet, which reads as follows:

The revenue thereafter has filed its response on 29.7.2026, which reads as follows:

It was submitted by ld AR that in respect of reopening the assessee is relying upon the circular/instructions issued by CBDT dated 4.3.2021 as also the clarificatory circular/instructions issued on 12.3.2021, which read as under:

It was the submission that in the case of the assessee, the information for the purpose of reopening was sent to the Assessing Officer by the DDIT/ADIT (Inv) Dhanbad on 29.1.2021 and same was received in the office of the Assessing Officer on 2.2.2021. Notice u/s.148 for the assessment year 2014-15 was issued on 26.3.2021 and for the assessment year 2015-16 and 2016-17 issued on 27.3.2021. It was the submission that the Circular/Instruction No.F No.225/40/2021/ITA-II issued on 4.3.2021 is a circular issued by CBDT in respect of categories of cases to be considered as potential cases for taking action u/s.148 of the Act by 31.3.2021 for the assessment years 2013-14 to 2017-18 by the Jurisdictional Assessing Officer.

It was the submission that in para 2, the CBDT has categorically mentioned that “no other category of cases, except the above, shall be considered for taking action u/s.148 of the Act by the JAO”. It was the submission that by the circular/instruction issued on 12.3.2021, the CBDT had clarified that the potential cases at point No.1(iii) of the circular/instruction dated 4.3.2021 mean the cases

It was a further submission that the information in the case of the assessee had been provided by the DDIT/ADIT(Inv), Dhanbad prior to 4.3.2021 and, therefore, notice issued u/s.148 of the Act on the basis of such information’s issued in the case of the assessee for the assessment years 2014-15, 2015-16 and 2016- 17 on 26 & 27.3.2021 were invalid and it violates the circular issued by CBDT dated 12.3.2021 and, therefore, is liable to be quashed. The AR drew our attention to Page 07 – 12 of the paper books which was the copy of the information sent by DDIT(Inv) Dhanbad to the AO vide letter dated 29.1.2021 which has been received in the office of the AO on 2.2.2021. The same reads as follows:-

In reply, ld Sr DR drew our attention to the “Insight verification portal” for all the three years, which reads as follows:

It needs to be mentioned here that this information was provided to the Tribunal but ld Sr DR refused to provide the same to the assessee. It was informed to ld Sr DR that the principles of natural justice require that if any information is going to be used in adjudicating an issue, the information must be available to all the persons connected to the case and he was directed to provide the information to the assessee, which has then done. Ld Sr DR though reluctant to provide the information on the ground that this is an Insight documents, which view was overridden by the Tribunal and directed to provide to the assessee. It was submitted by ld Sr DR that as per the Insight portal, the information was uploaded by the DDIT/ADIT(Inv) Dhanbad on 7.3.2021. It was the submission that the notice issued u/s.148 is on the basis of this information and as this information had been uploaded on 7.3.2021 after 4.3.2021 being the date of circular, and thus notice issued u/s.148 is liable to be upheld.

At this point, ld AR of the assessee was asked to provide the reasons recorded for reopening the assessment and the reasons have been provided for the assessment years 2014-15, 2015-16 and 2016-17. While providing us with the copy of the reasons recorded, the AR stressed that the reasons recorded are based on the physical information received by the AO on 2.2.2021 and not on the information as uploaded in the Insight Portal. He further submitted that the reasons for flagging the information in the Insight Portal is nothing but a way to communicating the same to the concerned AO’s for further action as per the law. The reasons recorded reads as follows:

Ld Sr DR also relied upon the decision of Hon’ble Delhi High Court in the case of CIT vs Safetag International India Pvt Ltd, [2011] 332 ITR 622 (Delhi) which has been referred by the ld CIT(A) in para 7.2. of his order to submit that if the assessee has not raised any objection during the assessment proceedings, he does not have any right to raise it further.

We have considered the rival submissions. The ground raised by the assessee in the additional ground are clearly legal grounds and this ground goes to the root of the assessment. It must be reiterated here that the Income tax laws being fiscal laws are substantially complicated. It is not a subject which is easily grasped by the common man. The fact that various views get explained by various Hon’ble High Courts and matters reached the Hon’ble Supreme Court for consideration itself shows the intricacy and complexity of the tax laws. A plain reading of the tax laws would give one meaning but the reading of this law with the facts of each case can give a different interpretation. The Hon’ble Supreme Court in the case of NTPC, 229 ITR 383 (SC) has categorically held that an appellate Tribunal has jurisdiction to entertain an additional ground of law not raised earlier, provided the relevant facts are already on record and do not require fresh investigation. The circular/instructions issued by CBDT dated 4.3.2021 and further clarificatory circular/instruction issued on 12.3.2021 prima facie shows that the reopening is invalid.

A perusal of the reasons recorded for the purpose of reopening which have been extracted above, shows that in para 2 and 5 for the assessment year 2014-15, the alleged income which has escaped assessment is Rs.1,41,89,843. However, the Insight portal alleges undisclosed income of Rs.1,08,74,913/-. Notice u/s.148 of the Act for the assessment year 2014- 15 admittedly is not mentioned any figure. For the assessment year 2015- 16 in the reasons recorded, the figure shows Rs.54,73,670/-, whereas the Insight portal shows Rs.92,04,260/-. For the assessment year 2016-17, the reasons recorded shows the figure of Rs.66,63,818/-, whereas in Insight Portal shows, the figures show Rs.29,48,292/-. Though it has been argued that the figures in Insight Portal are uploaded by DDIT/ADIT(Inv) Dhanbad, the question remains as to how the figures mentioned in the reasons recorded tally with those which have been provided in the physical form by DDIT/ADIT(Inv) Dhanbad on 29.1.2021 and not with that of the information flagged in the Insight Portal.

During dictation of the order in the open court, ld Sr DR submitted that Insight Portal also refers to a PDF. It was the submission that these figures could be in PDF. It must be mentioned here that said PDF has not been brought before the Bench nor has it been shown anywhere earlier. Even assuming that PDF contains such figures, the very basis of the information in such Insight portal itself is being questioned as to PDF is

Admittedly, the reasons recorded do not refer to Insight portal information. The figures had not been tallied with the Insight Portal information. There is no way to link the said information on the basis of which the Assessing Officer has issued notice u/s.148 of the Act or recorded the reasons for the purpose of reopening the assessment with Insight Portal information. However, it is noted that the figures mentioned in the reasons recorded tallies with those mentioned in the 3rd page of the physical information provided by the DDIT/ADIT(Inv) Dhanbad on 29.1.2021 in the physical form. This being so, we are left with no other option but to hold that the reopening has been done on the basis of the physical information made available to the Assessing Officer vide letter dated 29.1.2021 and received on 2.2.2021, which is prior to 4.3.2021. Consequently, in view of the circular issued by CBDT dated 4.3.2021 read with clarificatory circular issued on 12.3.2021, the notices issued on 26.3.2021 & 27.03.2021 is in violation of circular/instructions issued by CBDT referred to supra. Consequently, notice u/s.148 stands quashed and consequential assessments also stands quashed. Hence, additional ground raised by the assessee stands allowed. The other grounds as raised by the assessee are not being adjudicated insofar as the additional ground has been allowed and assessments have been quashed.

In the result, appeals of the assessee stand allowed.