DWARKA INFRAWORLD BUILDTECH PVT LTD , NEW DELHI vs. ACIT CIRCLE 7 (1) , DELHI

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ITA 6521/DEL/2025Status: DisposedITAT Delhi24 July 2026AY 2018-196 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 found significant factual mistakes in the orders and notices issued by the Assessing Officer, which did not pertain to the assessee. Consequently, the assumption of jurisdiction under Section 147 was deemed flawed.

What were the facts?

The Assessing Officer reopened the assessment under Section 147 based on information suggesting unexplained transactions between the assessee and another company. The assessee challenged the assumption of jurisdiction, citing factual errors in the reopening notices and orders.

What were the issues?

Whether the Assessing Officer validly assumed jurisdiction under Section 147 of the Income-tax Act, 1961, given factual inaccuracies in the reopening process.

Which sections of the Income-tax Act were involved?

Section 147,Section 148A(b),Section 148A(d)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “A”: NEW DELHI

Before: SHRI VIKAS AWASTHY & SHRI M. BALAGANESH

आदेश / ORDER PER M. BALAGANESH, A. M.: 1. The appeal in ITA No.6521/Del/2025 for AY 2018-19, arises out of the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘ld. CIT(A)’, in short] in dated 12.09.2025 against the order of assessment passed u/s 147 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 21.03.2023 by the Assessing Officer, ACIT, Circle-7(1), Delhi (hereinafter referred to as ‘ld. AO’).

2.

Ground No. 2 raised by the assessee is stated to be not pressed by the ld AR at the time of hearing. The same is reckoned as a statement made from the Bar and accordingly dismissed as not pressed.

3.

Ground Nos. 1, 3 and 4 raised by the assessee are challenging the assumption of jurisdiction u/s 147 of the Act. Since this goes to the root of the matter, we deem fit to take up the same first for adjudication.

4.

We have heard the rival submissions and perused the material available on record. The assessee company had filed its return of income for AY 2018-19 on 31.10.2018 declaring loss of Rs.14,82,474. The ld AO categorically states at page 1 para 2 of the assessment order that the case of the assessee was reopened u/s 147 of the Act for the reason that information was received on Insight Portal that assessee company had indulged in the following transactions:-

“Information has been received from the ITO (Inv), Unit-4, New Delhi wherein it is stated that "Mr. Subharansh Rai (PAN-AGCPR5577M) was the director of the assessee company and another company namely M/s Etherex Infotech Pvt Ltd. In case of the assessee company the assessee is filing its return regularly but in the case of M/s Etherex Infotech Pvt Ltd, no return is being filed. Further, as per statement recorded on 31.08.2021 of the director Mr. Subharansh Rai, it is stated by him that he is trying to close the company M/s Etherex Infotech Pvt Ltd but he failed to provide any proof for applying for closure and also there are may debit/credit transaction between the assessee company and M/s Etherex Infotech Pvt Ltd. Further, it is noted by the ITO (Inv), Unit-4, New Delhi that the there is a deposit of Rs. 58,08,500/- with AU Small Finance Bank Ltd for which assessee has failed to provide any explanation and the assessee also provide the detail of loss (-) Rs. 14,82,474/-claimed by the assessee as per ITR. Thus, the assessee indulged in transaction having value of Rs. 72,90,974/- which is remained unexplained."

5.

Notice u/s 148A(b) of the Act stood issued to the assessee on 19.03.2022 by stating as under:-

6.

Order u/s 148A(d) of the Act was passed on 31.03.2022, which is as under:-

7.

It could be seen from the aforesaid order u/s 148A(d) of the Act, there are several mistakes factually committed by the ld AO. First the return of income details mentioned in para 3 thereon does not relate to assessee herein at all. Further the figures mentioned in para 5, thereon does not find its place in notice issued u/s 148A(b) of the Act dated 19.03.2022. Accordingly, the conclusion drawn in para 7 of the order u/s 148A(d) of the Act referred supra also does not Page | 5 pertain / relate to the assessee herein at all. Hence, the entire reopening has been done based on complete incorrect facts not pertaining / relating to assessee herein. Hence, the very assumption of jurisdiction is completely flawed in the case and accordingly we have no hesitation to quash the assessment framed u/s 147 of the Act dated 31.03.2023 as void ab initio. Accordingly, the ground No. 1, 3 and 4 raised by the assessee are allowed.

8.

Since the entire reassessment is quashed on invalid assumption of jurisdiction, adjudication of other grounds raised by the assessee become academic in nature and hence they are left often.

9.

In the result, the appeal of the assessee is partly allowed.

Order pronounced in the open court on 24/07/2026.

-Sd/- -Sd/- (VIKAS AWASTHY) (M. BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 24/07/2026 A K Keot Copy forwarded to 1. Applicant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi

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