SANTPURIA ALLOYS PVT. LTD.,GIRIDIH vs. ACIT, C. C., DHANBAD

ITA 386/RAN/2025Status: DisposedITAT Ranchi22 May 202632 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the reassessment proceedings initiated under Sections 147/148 of the Act are bad in law and void ab initio for want of valid approval under Section 151 of the Act. The Tribunal found that the approval was issued by the PCIT, Patna, whereas the AO sought approval from the DGIT (Investigation), Patna, indicating a lack of jurisdiction and non-application of mind by the issuing authority. Furthermore, the Tribunal held that the addition made under Section 68/69A of the Act is unsustainable. The assessee had satisfactorily established the identity, genuineness, and creditworthiness of the share applicant company, M/s Smart Tradecomm Private Limited, by producing documentary evidence, including audited balance sheets and bank statements. The Revenue failed to bring any adverse material on record to rebut these evidences. The Tribunal relied on the principles laid down in Pr. CIT (Central)-1 v. NRA Iron & Steel (P.) Ltd. and Income-tax Officer vs. Cornerstone Property Investments (P.) Ltd., emphasizing that once the initial burden of proof by the assessee is discharged, the onus shifts to the Revenue to prove otherwise, which it failed to do. The assessment order passed by the AO and sustained by the CIT(A) was set aside, and the addition of Rs.4,75,00,000/- was deleted. The appeal of the assessee was allowed.

What were the facts?

The assessee, Santpuria Alloys Private Limited, filed its return of income for AY 2013-14 declaring Rs.43,31,410/-. A search operation on the assessee's group on 14.12.2022 led to reassessment proceedings. The Assessing Officer (AO) issued a notice under Section 148, alleging escapement of income. The assessee filed a revised return declaring the same income. The AO found that M/s Smart Tradecom Private Limited, with negligible financial strength and declaring a loss, invested Rs.4,75,00,000/- in the assessee company as share capital and premium. The AO treated this amount as unexplained money under Section 69A and taxed it under Section 115BBE. The CIT(A) dismissed the assessee's appeal, sustaining the addition. The assessee appealed to the ITAT.

What were the issues?

1. Whether the reassessment proceedings initiated under Section 148 of the Income-tax Act, 1961 (the Act) are bad in law for want of valid approval under Section 151 of the Act? (Mixed law and fact) 2. Whether the reassessment proceedings initiated under Section 148 of the Act are bad in law due to vague reasons recorded, failing to specify the charging section under which income escaped assessment? (Mixed law and fact) 3. Whether the addition of Rs.4,75,00,000/- as unexplained money under Section 69A of the Act, subsequently converted to Section 68 by the CIT(A), is sustainable on merits? (Mixed law and fact) Assessee's arguments: - Reopening under Section 148 is bad in law as reasons recorded are vague and do not specify the charging section (Section 68, 69, 69A, etc.), citing Pasari Casting And Rolling Mills (P) Ltd. vs. ITO. - Approval under Section 151 was mechanical and granted by an authority without jurisdiction (PCIT, Patna instead of DGIT, Patna). - The CIT(A) converted the addition from Section 69A to Section 68 without proper notice or opportunity to the assessee, violating natural justice. - M/s Smart Tradecomm Private Limited is a group company with common directors; it was a pre-existing shareholder and its investment was from liquidation of earlier investments, reflected in audited balance sheets. - Transactions were through banking channels, reflected in audited books, and statutory compliances were made. - The AO relied solely on an investigation report without independent enquiry. - No allegation that Smart Tradecomm received funds from shell companies or that the assessee routed its own unaccounted money. - Principle of consistency applies as facts haven't changed. Revenue's arguments: - Not recorded in the judgment.

Which sections of the Income-tax Act were involved?

Section 148,Section 149(1)(b)(iii),Section 69A,Section 115BBE,Section 151,Section 68,Section 147,Section 143(3),Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, — RANCHI BENCH

Before: Shri Sonjoy Sarma & Shri Ratnesh Nandan Sahay

Per Sonjoy Sarma, Judicial Member:

This appeal filed by the assessee is directed against the order dated 04.07.2025 of the Commissioner of Income Tax (Appeal) [hereinafter referred to as the ‘Ld. CIT(A)’] passed under Section 250 of the Income- tax Act, 1961 (hereinafter referred to as “the Act”) for the assessment year

2013-14. 2. Brief facts of the case are that, assessee is a Company, filed its return of income for the assessment year 2013-14 declaring total income at Rs.43,31,410/- derive from sale of sponge iron and its resi

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 148

All 35,022 judgments and leading authorities on Section 148 →

Recent GST High Court judgments

Search GST case law →