DIRIYAV SUTHAR,JODHPUR vs. ITO, WARD-3(1), JODHPUR

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ITA 650/JODH/2024Status: DisposedITAT Jodhpur02 June 2026AY 2014-156 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that reopening the assessment after four years on the same material, without any failure on the part of the assessee to disclose material facts, amounts to a change of opinion and is impermissible in law. The assumption of jurisdiction by the AO was deemed illegal and void ab initio.

What were the facts?

The assessee's assessment for AY 2014-15 was reopened after four years under Section 148. The original assessment under Section 143(3) had already examined the issue of gifts received from close relatives.

What were the issues?

Whether reassessment proceedings initiated after four years are valid when the original assessment was a scrutiny assessment that examined the same issue, and if it amounts to a change of opinion.

Which sections of the Income-tax Act were involved?

Section 148,Section 143(3),Section 147,Section 56(2)(vii),Section 234A,Section 234B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, JODHPUR BENCH, JODHPUR

For Appellant: Shri Amit Kothari, CA (Physical), Shri Vaibhav Agarwal, Addl. CIT-DR (Virtual)

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE DR. MITHA LAL MEENA, HON’BLE ACCOUNTANT MEMBER AND SHRI SUDHIR PAREEK, HON’BLE JUDICIAL MEMBER ITA No. 650/Jodh/2024 (Assessment Year – 2014-15) Diriyav Suthar Income Tax Officer, Ward-3(1) 5, ZSA BJS Colony, Jodhpur Jodhpur-342001 PAN No. BAQPS 2600 M Assessee by Shri Amit Kothari, CA (Physical) Shri Vaibhav Agarwal, Addl. CIT-DR (Virtual) Revenue by Date of Hearing 13 / 05 / 2026 Date of Pronouncement 02 / 06 / 2026 ORDER PER DR. MITHA LAL MEENA, A.M.: This appeal by assessee is filed against the order of National Faceless Appeal Centre Delhi [hereinafter referred to as NFAC/ CIT(A)] dated 21.06.2024 with respect to assessment year 2014-15.

2.

The appellant has raised following grounds of appeal:

1.

The Id.CIT(A) has erred in sustaining the order passed by the Id. AO which is bad in law and bad on facts. The proceedings-initiated u/s 148 is bad in law and bad on facts. The proceedings-initiated u/s 148 are barred by limitation of time, and is also on the basis of change of opinion which does not give a valid jurisdiction. The proceedings are contrary to the principles of natural justice. 2. The Id. CIT(A) has erred in sustained addition of Rs. 13,00,000/- u/s 56(2) (vii) for gift received from close relative. The addition so confirmed is bad in law and bad on facts. 3. The interest charged u/s 234A and 234B is bad in law and bad on facts. 4. The appellant crave liberty to add, amend, alter, modify, delete any of the ground of appeal on or before its hearing before your honours.

2 ITA No. 650/Jodh/2024 Asst. Year: 2014-15 3. In ground no. 1, the appellant challenged validity of the assessment order as the assessment proceedings initiated vide notice u/s 148 was barred by limitation of time.

4.

At the outset, the ld. Counsel for the assessee has submitted that the assessee has filed return of income for the assessment year 2014-15 on 31.03.2015 and the assessment order was passed u/s 143(3) dated 22.12.2016 after detailed scrutiny assessment on the issue of the gift received from the close relatives had been specifically examined by the AO during the original assessment proceedings (APB Pgs. 6-7). The AR further submitted that the notice u/s 148 was issued on 13.03.2021 seeking to reopen without specific reason to belief, the completed assessment u/s 143(3) of the Act, on the same issue without any fresh material is liable to be rejected on change of opinion.

5.

Thus, the reassessment proceedings initiated on 31.03.201 has been challenged as being without jurisdiction, barred by limitation and based merely on change of opinion. The AR has contended that in the present case where under the provisions of Section 147 as applicable to assessment year 2014-15, where the assessment has already been completed u/s 143(3), no assessment can be made after expiry of four years from the end of the relevant assessment year unless there was failure on the part of the assessee to disclose fully and

3 ITA No. 650/Jodh/2024 Asst. Year: 2014-15 truly all material facts necessary for assessment. The AR argued that for the assessment year 2014-15, the relevant assessment year ended on 31.03.2015 and the period of four years expired on 31.03.2019. Since the impugned notice u/s 148 was issued only on 31.03.2021. the reassessment is admittedly beyond four years from the end of the assessment year. Therefore, the condition precedent contained in the first proviso to Section 147 becomes mandatory to be complied with.

6.

In the present case, all the primary facts relating to the gifts recived from relatives had already been disclosed during the original scrutiny assessment proceedings. The Assessing Officer had examined the same and thereafter framed assessment u/s 143(3). Once the issue was examined in scrutiny proceedings, reopening on the very same material amounts to mere change of opinion, which is impermissible in law. In support, the Ld. AR placed reliance on the judgment delivered by Hon’ble Bombay High Court recently reiterated that reopening beyond four years without any failure to disclose material facts and in absence of fresh tangible material is invalid and amounts to change of opinion. The Ld. AR further submitted that various High Courts had consistently held that reassessment notices issued for assessment year 2014-15 after expiry of limitation are unsustainable where scrutiny assessment had already been completed and all materials facts were disclosed.

4 ITA No. 650/Jodh/2024 Asst. Year: 2014-15 7. The Ld. AR further submitted that the assessment proceedings further liable to be quashed because the reasons recorded do not establish any failure on the part of the assessee to disclose fully and truly all material facts. Mere reproduction of information already available on record cannot confer jurisdiction u/s 147 after expiry of four years.

8.

The Ld. AR has placed reliance on the following judicial precedents to support the appellant’s case:

 CIT Vs. Kelvinator of India Ltd. – 320 ITR 561 (SC)/228 CTR (SC) 488.  Calcutta Discount Co. Ltd. Vs. ITO – 41 ITR 191 (SC)  Hindustan Lever Ltd. Vs. R.B. Wadkar – 268 ITR 332 (Bom.)  German Remedies Ltd. Vs. DCIT – 287 ITR 494 (Bom.)  Asian Paints Ltd. Vs. DCIT – 308 ITR 195 (Bom.)  CIT Vs. Foramer France – 264 ITR 566 (SC)  Haryana Acrylic Manufacturing Co. Vs. CIT – 308 ITR 38 (Del.) 9. The Ld. DR on the other hand relied on the impugner order.

10.

We have heard both the sides, perused the material on record, impugned order and the case law cited before us. Admittedly, the assessment of the assessee has been reopened after expiry of four years from the end of the relevant assessment year without pointing out any material facts in the reasons recorded to establish that there was any failure on the part of the assessee to disclose fully or truly all material facts in the reasons recorded by

5 ITA No. 650/Jodh/2024 Asst. Year: 2014-15 the AO. It is noted that all the primary facts relying to the issue of the gift received from the relative has already been disclosed during the original scrutiny proceedings and this issue was examined in detail by the AO while framing the original assessment order u/s 143(3). Since, the appellant assessee has disclosed all the material facts fully and truly necessary for the assessment and that the issue was examined in the original scrutiny proceedings by the AO and, therefore, we hold that such reopening of the assessment on same material facts tantamount to mere change of opinion, which is impermissible in law.

11.

Hon’ble Supreme Court in the case of Commissioner of Income Tax Vs. Kelvinator of India Ltd. (supra) held that reassessment cannot be resorted to merely on change of opinion and there must be “tangible material” for reopening of completed assessments. The Court has categorically observed that Section 147 does not permit review of an assessment order under the garb of reassessment.

12.

In the case of Haryana Acrylic Manufacturing Co. Vs. CIT (supra), the Hon’ble Delhi High Court has observed that reassessment in the cases where following true disclosure of the facts of the assessee, the validity of the notice issued beyond four years u/s 148 is held without jurisdiction.

6 ITA No. 650/Jodh/2024 Asst. Year: 2014-15 13. Respectfully following the Apex Court in the case of Kelvinator India Ltd. (supra) and Delhi High Court in the case of Haryana Acrylic Manufacturing Co. (supra), we hold that in the present case, the assumption of jurisdiction by the AO u/s 147 is illegal, void ab initio and liable to be quashed. Accordingly, the reassessment order is annulled.

13.

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

Order pronounced in the open court on 02/06/2026.

Sd/- Sd/- (SUDHIR PAREEK) (DR. MITHA LAL MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated : 02/06/2026. True Copy Nimisha Sr. PS Copies to : (1) The appellant. (2) The respondent. (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File BY ORDER,

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