RAVI CHOPRA,DELHI vs. ITO, WARD 61(2), DELHI

1 ITA No. 7201/Del/2025 Ravi Chopra

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI BENCH ‘C’: NEW DELHI BEFORE YOGESH KUMAR U.S., JUDICIAL MEMBER AND SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITA No. 4748/Del/2025 (A.Y 2023-24) Ravi Chopra, Vs Income Tax Officer 9/54, Basement Ward 61(2) Vikram Vihar, Lajpat Nagar-IV Delhi New Delhi-110024 PAN: AADPC9425E Appellant Respondent Assessee by Sh. Sandeep Sapra, Adv Revenue by Sh. Om Prakash, Sr. DR Date of Hearing 25/03/2026 Date of Pronouncement 15/05/2026

ORDER PER YOGESH KUMAR, U.S. JM: The present appeal is filed by the Assessee against the order of Ld.

Commissioner of Income Tax (Appeals/ National Faceless Appeal Centre

(‘Ld. CIT(A)/NFAC’ for short), New Delhi dated 25/09/2025 for the

Assessment Year 2011-12.

2 ITA No. 7201/Del/2025 Ravi Chopra c) There is no close nexus or live link between the material and reason to believe that income had escaped assessment. d) No approval has been obtained from the competent authority u/s 151 of the Act. 2. That without prejudice to Ground No. 1 above, the impugned assessment order dated 27/12/2018 for Assessment Year 2011-12 passed u/s 143(3)/147 of the Act deserves to be quashed/annulles as mandatory notice u/s 143(2) of the Act was not issued to the Appellant pursuant to filing of the income tax return.

for the year under consideration declaring an income of Rs. 4,32,400/-.

The assessment was reopened on the basis of information regarding

‘large cash deposits in Assessee’s bank account’. An assessment order

came to be passed under Section 143(3) r.w. Section 147 of the Act on

27/12/2018 by making an addition of Rs. 1,80,15,000/- under Section

68 of the Income Tax Act, 1961 ('Act' for short) treating the cash deposits

made in the bank accounts as unexplained. Aggrieved by the

assessment order dated 27/12/2018, Assessee preferred an Appeal

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before the Ld. CIT(A). The Ld. CIT(A) vide order dated 25/09/2025,

dismissed the Appeal of the Assessee. As against the order of the Ld.

CIT(A), Assessee preferred the captioned Appeal.

the Assessee submitted that the impugned assessment order should

have been quashed by the Ld. CIT(A) as there is no application of mind

on the part of the A.O. so as to come to an independent satisfaction that

he had ‘reason to believe’ that income had escaped assessment. Further

submitted that there is no close nexus or live link between the material

and the reason to believe that, the income has escaped assessment. The

Ld. Counsel submitted that the A.O. initiated proceedings u/s 147/148

of the Act merely on suspicion for making ‘fishing and roving’ enquiry

and not because he had ‘reason to believe’ that income had escaped

assessment. The Ld. Counsel has also relied on the Judgment of Hon'ble

Supreme Court in the case of Kelvinator India Ltd. (2010) 320 ITR

561(S.C). Further submitted that the proceedings under Section

147/148 of the Act has been initiated merely on the basis of information

received from Investigating Wing, New Delhi and the A.O. has not made

any independent enquiries. Thus, submitted that the assessment order

is required to be quashed at the hands of the Tribunal. In order to

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support the said contention, the Ld. Assessee's Representative relied on

plethora of judicial precedents and sought for allowing the Ground No. 1

of the Assessee.

case of the Assessee was rightly reopened based on the information

received from Investigating Wing which has done throughInvestigation

and provided the information which ultimately resulted in making the

addition, therefore, submitted that the Ground No. 1 of the Assessee is

devoid of merits. Thus, sought for dismissal of Ground No. 1 of the

Assessee.

on record. The case of the Assessee was reopened based on the

information received from Investigating Wing, New Delhi. The case of the

Assessee was reopened after recording reasons for reopening on

26/03/2018. For the sake of ready reference reasons so recorded is

reproduced as under:-

“ Brief details of information collected/received by the AO: Information vide letter F.No. ITO (Inv.)/U-3/STR/2017-18/1035 dated 13.03.2018 has been received from Income Tax Officer (Inv.), Unit-3, New Delhi, and further from ITO ward 61(1) New Delhi, It is stated that there has been frequent high value cash deposits followed by high value clearing and RTGS debits against assessee's own accounts in other banks. During the course of investigation,

5 ITA No. 7201/Del/2025 Ravi Chopra

information was called for against which no compliance was made by the assessee. Analysis of the Bank statement of the mentioned account revealed that there are frequent entries of cash deposits in Axis Bank and the amount is transferred to Sh. Ravi Chopra/ Ravi Chopra Loan. During F.Y. 2010-11, total credit in his accounts showed at Rs.1,57,25,000/-. As per returns of income for A.Y. 2011-12, Gross Total income is Rs. 2,94,600/- only arising out of Income from business & profession at Rs.2,05,680/- and other sources at Rs.88,920/-. Analysis of information collected/received:

After analyzing the information reviewed, it has been observed that there are high chances that income has escaped assessment that requires scrutiny.

Enquiries made by the AO as sequel to information collected/received :

In consequence to the information received from wing, Copies of ITR of F.Y. 2010-11 & 2011-12 were taken and it was analyzed along with AIR of the assessee. Findings of the AO:

Upon analysis of the above facts and information, it is gathered that the Gross total income declared by the assessee in A.Y. 2011-12 does not appears satisfactory in support of such huge cash deposits followed by high value clearing and RTGS debits. appears satisfactory in support of such huge cash deposits followed by

Basis of forming reason to believe and details of escapement of income:

In view of the above discussion and having apparent documentary evidence keeping the above facts in view, I have reason to believe that an amount of at least Rs.1,57,25,000/- chargeable to tax has escaped assessment in case of the assessee within the meaning of section 147 of Income Tax Act, 1961 by reason of the failure on the part of the assessee to disclose fully and truly all material facts necessary for it's assessment for A.Y. 2011-12 and the case is fit for reopening the assessment u/s 147 by issuance of notice u/s 148 of the Income Tax Act, 1961.

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Submitted to the Pr. Commissioner of Income Tax, Delhi-21, New Delhi for kind approval for issuance of notice u/s 148 of the Income Tax Act, 1961 for the A.Y. 2011-12, in this case.”

analyzing the information received, it has been observed that there are

high chances that income has escaped assessment that requires

scrutiny’.Thus, it is evident that the A.O. had suspicion that there are

high chances ‘that income has escaped assessment’ therefore, the A.O.

has initiated proceedings under Section 147/148 of the Act merely on

suspicion for making ‘fishing and rowing’ enquiries and not because of

the A.O. had ‘reasons to believe that the income had escaped

assessment’.

Ltd. (supra) held as under:-

“Amendment made by the Amending Act, 1989, to reintroduce the expression reason to believe' in Section 147. A number of representations were received against the omission of the words 'reason to believe' from Section 147 and their substitution by the 'opinion' of the Assessing officer. It was pointed out that the meaning the expression, reason to believe' had been explained in number of court ruling in the past and was well settled and its omission from section 147 would give arbitrary powers to the assessing officer to reopen past assessment on mere change of opinion. To allay these fears, the Amending Act, 1989, has again amended section 147 to reintroduce the expression 'has reason to believe' in place of the words 'for reasons to be recorded by him in writing, is of the opinion'. Other provisions of the new section 147, however remain the same"

7 ITA No. 7201/Del/2025 Ravi Chopra

326, the Hon'ble High Court of Gujarat held as under:-

“By now it is well settled that even in a case where the original assessment is made without scrutiny, the requirement of the Assessing Officer forming the belief that income chargeable to tax has escaped assessment, would apply. Reference in this respect can be made of the judgment in the case of Inductotherm (India) P. Ltd. vs M. Gopalan, Deputy CIT reported in [2013]

356 ITR 481 (Guj.). It is equally well settled that the notice of reopening can be supported on the basis of reasons recorded by the Assessing Officer. He cannot supplement such reasons. The third principle of law which is equally well settled, and which would apply in the present case is that reopening of the assessment would not be permitted for a fishing or a roving inquiry. This can as well be seen as part of the first requirement of the Assessing Officer having reason to believe that income chargeable to tax has escaped assessment. In other words, notice of reopening which is issued barely for making fishing inquiry, would not satisfy this requirement. With this background, we may revert to the reasons recorded by the Assessing Officer Information from the Value Added Tax Department of Mumbai was placed for his consideration. This information contained list of allegedly bogus purchases made by various beneficiaries from hawala dealers. The assessee was one of them. As per the information, he had made purchase worth Rs. 3.21 crores (rounded off) from such hawala dealers during the financial year 2008-09. According to the Assessing Officer, this information "need deep verification".

If on the basis of information made available to him and upon applying his mind to such information, the Assessing Officer had formed a belief that income chargeable to tax has escaped assessment, the court would have readily allowed him to reassess the income. In the present case however, he recorded that the information required deep verification. In plain terms therefore, the notice was being issued for such verification. His later recitation of the mandatory words that he believed that income chargeable to tax has escaped assessment, would not cure this fundamental defect".

8 ITA No. 7201/Del/2025 Ravi Chopra

443, the Jurisdictional Delhi High Court held as under:

"The impugned notices must also be set aside as the AO had no reason to believe that the income of the assessee for the relevant assessment years had escaped assessment. Concededly, the AO had no tangible material in regard to any of the transactions pertaining to the relevant assessment years. Although the AO may have entertained a suspicion that the assessee's income has escaped assessment, such suspicion could not form the basis of initiating proceedings u/s 147 of the Act. A reason to believe-not reason to suspectis the precondition for exercise of jurisdiction u/s 147 or the Act."

under Section 147/148 of the Act has been initiated merely on the basis

of Information received from Investigating Wing, New Delhi and A.O. has

not made any independent enquiries by himself. It is also settled law that

initiation of proceedings u/s 147/148 merely on the basis of information

received from the Investigation Wing without AO making any

independent enquiries himself is bad in law. Further an information

received from Investigation Wing cannot be said to be tangible material

so as to form a belief that income has escaped assessment.

the Jurisdictional High Court Delhi held as under:

9 ITA No. 7201/Del/2025 Ravi Chopra

"As in the above case, even in the present case, the court in unable to discern the link between the tangible material and the formation of the reasons to believe that income had escaped assessment. In the present case too, the information received from the Investigation Wing cannot be said to be tangible material per se without a further inquiry being undertaken by the Assessing Officer."

395 ITR 677 the Jurisdictional Delhi High Court held as under:-

"In the present case, as already noticed, the reasons to believe contain not the reasons but the conclusions of the Assessing Officer one after the other. There is no independent application of mind by the Assessing Officer to the tangible material which forms the basis of the reasons to believe that income has escaped assessment. The conclusions of the Assessing Officer are at best a reproduction of the conclusion in the investigation report. Indeed, it is a "borrowed satisfaction". The reasons fail to demonstrate the link between the tangible material and formation of the reason to believe that income has escaped assessment".

proceedings u/s 147/148 have been initiated merely on the ground of

cash deposits in appellant's bank account. In other words, there is no

tangible material resulting in escapement of income and therefore the

initiation of proceedings u/s 147/148 of the Act is bad in law. The said

ratio has been fortified in the case of PCIT vs. Meenakshi Overseas (P)

Ltd. (2017) 395 ITR 677, wherein the Hon'ble High Court of Delhi held as

under:-

10 ITA No. 7201/Del/2025 Ravi Chopra

"Recently in Agya Ram vs CIT 386 ITR 545 (Delhi High Court), it was emphasized that the reasons to believe "should have a link with an objective fact in the form of information or materials on record." It was further emphasized that "mere allegation in reasons cannot be treated equivalent to material in eyes of law. Mere receipt of information from any source would not by itself tantamount to reason to believe that income chargeable to tax has escaped assessment."

precedents mentioned above, we find merit in the Ground No. 1 of the

Assessee, accordingly, Ground No. 1 of the Assessee is allowed.

without prejudice to Ground No. 1 contending that the order dated

27/12/2018 for Assessment Year 2011-12 passed under Section

143(3)/147 of the Act is liable to be quashed as there is no notice under

Section143(2) of the Act has been issued for the year under

consideration. The Ld. Counsel for the Assessee has taken us through

Page No. 1 of the paper book and submitted that the notice issued by the

A.O. dated 19/11/2018 under Section 143(2) of the Act has been

mentioned as ‘A.Y 2010-11’, therefore, sought for allowing the Ground

No. 2. The Ld. Counsel has also relied on the following judicial

precedents:

11 ITA No. 7201/Del/2025 Ravi Chopra i. CIT vs. Laxman Das Khandelwal 417 ITR 325 (Supreme Court),

ii ACIT vs. Hotel Blue Moon 321 ITR 362 (Supreme Court)

iii. PCIT vs. Staunch Marketing Pvt Ltd 404 ITR 299 (Jurisdictional Delhi HC)

mentioning of Assessment Year 2010-11 in the notice dated 09/11/2018

under Section 143(2) of the Act is a typographical error and further

submitted that the Assessee had participated in the assessment

proceedings and the addition has been made on its merits, therefore, in

which stage, the Assessee cannot take up such grounds, thus sought for

dismissal of Ground No. 2 of the Assessee.

on record. Admittedly, the notice under Section 143(2) of the Act has

been issued for Assessment Year 2010-11 and not for Assessment Year

2011-12 which ultimately resulted in framing the impugned Assessment

Order for the year under consideration. For the sake of ready reference

the Notice dated 19/11/2018 issued u/s 143(2) of the Act for

Assessment Year 2010-11 is reproduced as under:-

12 ITA No. 7201/Del/2025 Ravi Chopra

quashed if the assessment so framed without issuing notice under

Secitdon143(2) of the Act as held in the case of CIT vs. Laxman Das

Khandelwal (Supra), ACIT vs. Hotel Blue Moon (supra) and PCIT vs.

Staunch Marketing Pvt. Ltd (supra).

13 ITA No. 7201/Del/2025 Ravi Chopra

also Jurisdictional High Courtmentioned above, we are of the opinion

that the assessmentframedunder Section 143(3) /147 of the Act dated

27/12/2018 is liable to be quashed as there was no notice issued under

Section 143(2) of the Act for the year under consideration. Accordingly,

Ground No. 2 of the Assessee is allowed.

quashed the assessment order, other grounds of Appeal raised by the

Assessee requires no adjudication.

Order pronounced in the open court on 15th May, 2026

Sd/- Sd/-

(MANISH AGARWAL) (YOGESH KUMAR U.S.) ACCOUNTANT MEMBER JUDICIAL MEMBER Date:- 15 .05.2026 Reshma Naheed, Sr.P.S Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT

ASSISTANT REGISTRAR ITAT, NEW DELHI

14 ITA No. 7201/Del/2025 Ravi Chopra