ACIT, NEW DELHI vs. SUNANDA POLYMERS, NEW DELHI

PDF · subscribers
ITA 5819/DEL/2025Status: DisposedITAT Delhi17 July 2026AY 2016-174 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the Revenue had not challenged the CIT(A)'s finding regarding the invalidity of the reassessment proceedings. Therefore, the CIT(A)'s order quashing the reassessment order became final.

What were the facts?

The Assessing Officer (AO) made additions to the assessee's income based on reassessment proceedings initiated under Section 147. The CIT(A) deleted these additions, holding that the reassessment was initiated on a wrong presumption and without application of mind.

What were the issues?

The primary issue was whether the reassessment proceedings initiated by the AO were valid. The Revenue failed to challenge the CIT(A)'s decision that the reassessment was unsustainable in law.

Which sections of the Income-tax Act were involved?

Section 147,Section 143,Section 144B,Section 37,Section 148A,Section 250,Section 253(2)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘E’: NEW DELHI

For Appellant: Shri Ashwani Kumar, CA
For Respondent: Shri. Tarun Sarda, Sr. DR
Hearing: 08/07/2026Pronounced: 17/07/2026

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘E’: NEW DELHI BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENT AND SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITA No.5819/Del/2025 (ASSESSMENT YEAR 2016-17) ACIT, Sunanda Polymers 43/4, 1st Floor, New Delhi Vs. East Patel Nagar, New Delhi. (Appellant) (Respondent) Assessee by Shri Ashwani Kumar, CA Sh. Ankur Agarwal, CA Department by Shri. Tarun Sarda, Sr. DR. Date of Hearing 08/07/2026 Date of Pronouncement 17/07/2026 O R D E R PER MANISH AGARWAL, AM: This appeal is filed by the Revenue against the order of Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [Ld. CIT(A)] dated 24.06.2025 u/s 250 of the Income Tax Act, 1961 (“the Act” in short) arising out of the assessment order passed u/s 147 r.w.s.144(B) of the Act for Assessment Year 2016-17.

2.

Briefly stated the facts are that the assessment order was passed u/s 147 r.w.s 143 of the Act dated 18.05.2023 wherein the total addition of Rs. 3,05,67,087/- was made to the total income of Rs. 77,57,074/- vide order dated 13.12.2019 and, accordingly, total income of the assessee was recomputed at Rs.3,83,24,161/-.

2 ITA No.5819/Del/2025 ACIT vs. Sunanda Polymers 3. Against the said order, assessee preferred an appeal before the Ld. CIT(A) wherein the assessee has challenged the reopening of the assessment and further challenged the additions so made on merits. The Ld. CIT(A) in terms of the order dated 24.06.2025 has deleted the additions as well as holding the reopening of the assessment u/s 147 is not correct as it was initiated on wrong presumption and without application of mind.

4.

Against the said order, the Revenue filed the appeal before the Tribunal by taking following grounds of appeal: “1. Whether on the facts and in the circumstances of the case the Ld. CIT was justified in deleting the addition of Rs. 3,03,07,932/- on account of bogus purchase disallowed u/s 37 of the Act despite the fact that the kingpin of the entire scheme of providing accommodation entries i.e. Shri Ashok Gupta has categorically stated in the statement recorded on oath that the transactions entered through the entities i.e. M/s. Parth International, M/s. Ridhi Sidhi Impex, SA Agro International and M/s. Gunn Enterprises are nothing but accommodation entries and no genuine business of purchase and sale occurred. He has also submitted that, no physical transactions of goods occurred and these trades were just entries provided to the beneficiaries to enable them to book bogus transactions in their respective books 2. Whether on the facts and in the circumstances of the case the Ld. CIT was justified in deleting the addition of Rs. 2,59,155/- that assessee has earned through cash commission from giving bogus sales entries of Rs. 2,59,15,478/-, reflected in the P&L A/c and taken into consideration while computing the total income despite the fact that the assessee is privy to the scheme and in such type of Bogus/agreed arrangement cash is exchanged in form of commission. 3. The above grounds are independent and without prejudice to one another. 4. That the appellant craves the right to add, delete, amend or abandon any of the grounds at the time or before the actual hearing of the case.”

5.

During the course of hearing in terms of letter dated 14.05.2026 an authorization is filed stating that one additional ground of appeal is preferred which reads as under:

3 ITA No.5819/Del/2025 ACIT vs. Sunanda Polymers “1. Whether on facts and in circumstances of the case, Id CIT(A) was justified in taking the stand that the AO had not followed the principle of natural justice by not providing opportunity to cross examine the statement of Shri Ashok Gupta In the case of Nath International Sales & Anothers v. Union of India adjudicated by the Delhi High Court on January 7, 1992 (citation air 1992 del 295), the key finding was that the right to cross-examination is not an absolute right in every administrative action.”

6.

Heard the parties and perused the materials available on record. It is observed that the Ld. CIT(A) in terms of the order dated 24.06.2025 has held the reopening made as not sustainable in the eyes of law by making following observations in Para 9.7 and 9.8 of the order:

“9.7 The appellant further stated that whatever the so-called person(s) stated in their statement is no gospel truth and cannot be applied blindly to all the persons who have made purchase and sales from that alleged parties. In the light of above discussion and by considering the facts of the case, I am of the opinion that the reassessment proceedings u/s 148A was initiated on the wrong assumption by over- looking the fact of appellant and without application of mind. Thus, order passed u/s 147 r.w.s. 1448 is unsustainable in law and the addition made is deleted. Hence the grounds, raised by the appellant is allowed. 9.8 Considering the above facts and circumstances, I am of the opinion that the addition made by the AO is not acceptable since the reassessment proceedings u/s 148A was initiated on the wrong assumption by over-looking the fact of appellant and without application of mind. Thus, order passed u/s 147 r.w.s. 144B is unsustainable in law.”

7.

As could be observed from the grounds of appeal taken as reproduced herein above, the Revenue has not challenged the order of the Ld. CIT(A) on the issue of validity of the reopening of assessment u/s 148 of the Act nor any ground of appeal was raised by the revenue. It is further relevant to state that on early occasions, adjournment was taken by the Revenue for filing additional grounds of appeal on the issue of reopening. Even after providing two opportunities, the Revenue has failed to challenge the observations of Ld. CIT(A) holding the reopening of the assessment as invalid and in terms of email letter dated 19.05.2026 by the DCIT, Circle-49(1), New

4 ITA No.5819/Del/2025 ACIT vs. Sunanda Polymers Delhi as filed before us and reproduced herein above, the Revenue has intended to challenge the order of Ld. CIT(A) on the ground of cross examination. Thus, the order of Ld. CIT(A) quashing the reassessment order by holding the reassessment proceeding initiated u/s 147 of the Act as invalid, become final. It is also relevant to state that except the authorization filed by Ld. DCIT u/s 253(2) no formal additional ground of appeal was filed by the Assessing officer. Under these circumstances, we are not inclined to interfere in the order of Ld. CIT(A) who quashed the reassessment order by holding reopening as not sustainable in the eyes of law against which observations have not been challenged by the Revenue. Accordingly, appeal of the Revenue is dismissed.

8.

In the result, appeal filed by the Revenue is dismissed. Order pronounced in the open Court on 17.07.2026.

Sd/- Sd/- - (MAHAVIR SINGH) (MANISH AGARWAL) VICE PRESIDENT ACCOUNTANT MEMBER Dated: 17.07.2026. *PK, Sr. PS* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI

More judgments on Section 147

All 49,210 judgments and leading authorities on Section 147 →

Recent GST High Court judgments

Search GST case law →