DCIT, DELHI JHANDEWALAN vs. GPA CAPITAL FOODS PRIVATE LIMITED, DELHI

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “B”: NEW DELHI BEFORE MS MADHUMITA ROY, JUDICIAL MEMBER AND SHRI KRINWANT SAHAY, ACCOUNTANT MEMBER

ITA Nos. 16/Del/2026 (A.Y 2017-18) ITA Nos. 9159/Del/2025 (A.Y 2018-19)

GPA Capital Foods Private Vs. DCIT Limited. Room No. 323, ARA F-1734-1735, DSIDC Centre, Jhandewalan Industrial Area, Narela New Delhi New Delhi

(Appellant) (Respondent) PAN: AAJCA1965A

ITA Nos. 1145/Del/2026 (A.Y 2017-18) ITA Nos. 1146/Del/2026 (A.Y 2018-19)

DCIT Vs. GPA Capital Foods Private Room No. 323, ARA Limited. F-1734-1735, Centre, Jhandewalan DSIDC Industrial Area, New Delhi Narela New Delhi

(Appellant) (Respondent) PAN: AAJCA1965A Assessee by : Shri Suresh Gupta, CA Revenue by: Shri Mahendra Singh, Sr DR

Date of Hearing 24/30/06/2026 Date of pronouncement 27/07/2026 O R D E R PER MADHUMITA ROY, J. M.: The captioned appeals filed by the assessee and the Revenue

are directed against the different orders passed by the Ld.

Commissioner of Income-tax (Appeals)-29, New Delhi [hereinafter

referred to as the Ld. CIT(A)] under Section 250 of the Income Tax

2 GPA Capital Foods Pvt. Ltd. Vs. DCIT Act, 1961 (hereinafter referred to as ‘the Act’) arising out of the

Assessment Orders passed by the Assessment Unit, Income-tax

Department (hereinafter referred to as ‘the ld. AO’) under Section

147 of the Income Tax Act, 1991 (‘Act’ for short) for Assessment Year

2017-18 and 2018-19 respectively.

ITA No. 9159/Del/2025 (A.Y 2018-19) (Assessee’s Appeal)

proceeding as invalid and without jurisdictionaland further that

without compliance with the legal requirements of the provision of

Section 147/148//148A/151/149 and Explanation 2 of Section 148

of the Act. The Assessee in the year under consideration on the

basis of information received in relation to a search conducted under

Section 132 of the Act dated 17.11.2021 on Galaxy Group Sh.

Pradeep Indra Prasad Agrawal and entry providers of Sh. Deepak

Agarwal and Sh. Himanshu Verma by the Investigating Wing that

the Assessee had entered into the transactions with one M/s CEA

Consultants P. Ltd. amounting to Rs. 1,91,95,250/- during the year

under considerationis a paper company controlled and managed by

Deepak Agarwal and Himanshu Verma felicitating accommodation

entries, notice under Section 148 of the Act was issued on the

Assessee namely GPA Capital Foods Pvt. Ltd, having PAN No.

AAJCA1956A, the Assessee before us. The said notice under Section

3 GPA Capital Foods Pvt. Ltd. Vs. DCIT 148 dated 27.03.2024 mentioned accommodation entries obtained

by the Assessee in the form of receipts/payments to the tune of Rs.

2,50,00,000/- from the entities controlled as above. Such notice

was issued upon approval Explanation 2 of Section 148 of the

Assessee from the CCIT, prior approval and approval of the specified

authority in the light of Section 151(ii) of the Act.

has drawn our attention to page Nos. 66 to 68 of the Paper Book

filedbefore us containing the said notice dated 27/03/2024 issued

under Section 148 of the Act for reopening of assessment against the

Assessee .Relying on this particular notice it was submitted by the

Ld. Counsel that the foundational reason for reopening of

assessment is the loan transaction of another entity namely M/s

GPA Food Private Limited having PAN No. AAECG2324G to the tune

of Rs. 2,50,00,000/- and on the returned income shown by the

Assessee therein at Rs. 5,30,50,600/- filed on 29/01/2018, whereas

the return filed by the Assessee before us of Rs. 3,00,74,890/- and it

was filed on 22.09.2018 appearing at the very first paragraph of the

assessment order dated 20.03.2021 appearing at Page 55 of the

Paper Book filed before us having different PAN. Such original

assessment was done under Section 143(3) r.w. Section 143(3A) and

143(3B) of the Act dated 20.03.2021. Thus, it is evident that the

4 GPA Capital Foods Pvt. Ltd. Vs. DCIT loan transaction referred by the Ld. A.O. in reopening of assessment

is not the Assessee namely M/s GPA Capital Foods Pvt. Ltd. having

PAN No. AAJCA1965A who has filed its return on 22.09.2018 of an

income declaring an income of Rs. 3,00,74,890/-. The loan

transaction in question is on a company being GPA Food Private

Limited, PAN No. AAECG2324G declaring return of income on

29.01.2018 at Rs. 5,30,50,600/- and therefore, the entire recording

of reason for reopening of assessment is total non application of

mind, and thus, not sustainable in the eyes of law and labile to be

quashed as was the crux of the submission made by the Ld. AR. He

has further submitted that the Ld. A.O. proceeded with the reason of

escapement of income of Rs. 2,50,00,000/- whereupon notice under

Section 142(1) of the Act on 03.09.2024 was issued appearing at

Page 73 to 76 of the paper book filed before us. The Assessee by and

under is submission dated 02/01/2025 and 13.02.2025 explained

that there was no such transaction of Rs. 2,50,00,000/- by the

Assessee with the entities in question appearing at Pages 100 to 196

and Pages 197 to 204.

finding and that too on the basis of completely different assessee and

thus, proceeding under Section 148 of the Act is invalid and,

therefore, liable to be set aside. In this regard, the Ld. DR relied

5 GPA Capital Foods Pvt. Ltd. Vs. DCIT upon the order of the Ld. A.O. and the Ld. CIT(A). Further income

escaping assessment recorded is only of 35,00,000/- which is less

than Rs. 50,00,000/- which is the prescribed monetary limit under

Section 149(1) (b) of the Act and thus, the reassessment is without

jurisdiction as argued by the Ld. AR.

Advocate appearingfor the Assessee further argued that since the

reassessment proceeding has been initiated after the expiry of three

years from the end of the relevant assessment year i.e. 2018-19, the

Ld. A.O. was not justifying in proceeding with the assessment in

deficiencies of provision of Section 149(1)(b) of the Act and thus, not

sustainable. In this regard, he has relied upon the Judgment

passed by the Co-ordinate Bench of the Tribunal in the case of

Devendra Singh vs. Dy CIT in ITA No. 4715/Del/2025 dated

27.11.2025 reported in 2025 (12) TMI 590-ITAT, Delhi.

made by the Ld. AR neither been able to rely upon any Judgment

contrary to the ratio laid down as above in the favour of the

Assessee.

the facts and circumstances of the case since the reopening of

assessment was made on the basis of notice issued under Section Page | 5

6 GPA Capital Foods Pvt. Ltd. Vs. DCIT 148 of the Act dated 27.03.2024 completely on wrong finding of

factbeing transaction entered into different assessee and further that

the escapement of assessment, if any, is less than 50,00,000/- and

further that there was no mentioning of income represented in the

form of asset in compliance with the condition of Section 151 of the

Act, the initiation of proceeding is found to be bad, illegal, erroneous

and thus, liable to be quashed. Consequently, the entire proceeding

is vitiated, void ab initio and thus, quashed.

ITA No. 1146/Del/2026 (A.Y 2018-19) (Department’s Appeal)

addressed and decided in favour of the Assessee, the appeal

preferred by the revenue is found to have no merit and dismissed.

ITA No.16/Del/2026 (A.Y 2017-18) (Assessee’s Appeal) 9. By way of appeal, the assessee has challenged the order passed

by the Ld. CIT(A) in not considering the impugned reassessment

proceedings as invalid, without jurisdiction, and without complying

the legal requirements of the provisions of section

147/148/151/148A/149 r.w.s. Explanation-II of Section 148 of the

Act. In fact, before the ld. CIT(A) this particular aspect of the matter

duly raised by the Assessee that the information on the basis of

which the assessment was initiated was nothing but search on the

third party carried on 20.07.2022 wherein the information pertains

7 GPA Capital Foods Pvt. Ltd. Vs. DCIT to the assessee have been considered incriminating while computing

income in the hands of the assessee. Since, search was conducted

after 01.04.2021 amendment under the Finance Act, 2021 shall

apply wherein it has been strictly directed to be followed that where

the material found in the third-party search is relied upon for

making assessment, department is required to issue notice following

the provisions laid down on the 2nd proviso to Section 148 r.w.s.

proviso (c) to Section 148 of the Act and therefore, prior approval

from the PCIT is a mandatory obligation on the part of the

authorities below for initiation of proceedings under Section 148 of

the Act. Such failure on the part of the department makes the

reassessment void, unsustainable, and thus, needs to be quashed as

argued by the Ld. Counsel appearing for the assessee was not taken

into consideration is in proper perspective as it also appears from

order impugned though the same was raised before the Ld. CIT(A).

Such legal and factual aspect of the matter has not been able to be

controverted by the Ld. DR.

absence of compliance of legal provision discussed hereinabove, the

order impugned is found to be not sustainable in law and the entire

proceedings is therefore liable to be quashed. We order accordingly.

8 GPA Capital Foods Pvt. Ltd. Vs. DCIT ITA No. 1145/Del/2026 (A.Y 2017-18) (Department’s Appeal) 11. Since, we have passed order in favour of the assessee quashing

the entire assessment as vitiated, the Department’s appeal becomes

infructuous and thus dismissed infructuous.

Order pronounced in the open court on 27/07/2026.

Sd/- Sd/- (KRINWANT SAHAY) (MADHUMITA ROY) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 27/07/2026 R. Naheed, Sr PS Copy forwarded to