METRO TECHNOBUILD PVT LTD (AMALGAMATED CO.),PITAMPURA vs. ACIT RANGE -26 , NEW DELHI

The assessee was originally assessed under Section 143(3) of the Act on 31.03.2025 at Rs.3,66,210/- upon making disallowance under section 14A of the Act amounting to Rs.3,17,860/- against the returned income of Rs.48,350/-. Subsequently, the assessment was reopened under Section 147 of the Act upon issuance of notice under Section 148 of the Act dated 31.03.2019 after taking approval of the PCIT-9, Delhi, as claimed by the Revenue on the basis of information received from DDIT(Inv.), Unit-5(1), New Delhi, vide letter dated 29.03.2019 on account of accommodation entries of Rs.20 lakhs from Goyal Trading Corporation and vide another letter dated 28.03.2019 of the DDIT(Inv.) Unit-1(3), New Delhi, in regard to suspicious bank deposits in the account of the assessee for AY 2012-13. In response to notice under Section 148 of the Act, income was declared at Rs.48,350/- by the assessee which is as per the original Income Tax Return. Upon making all formalities, notices under Section 143(2) of the Act dated 11.12.2019 and under Section 142(1) of the Act dated 25.11.2019 were issued and served electronically, whereupon objections were raised on 03.12.2019 and finally disposed of vide an order dated 12.12.2019 upon making addition in the hands of the assessee and in turn confirmed by the Ld. CIT(A). Hence, the instant appeal before us.

At the time of hearing of this appeal, the Ld. Counsel for the assessee submitted before us that the reopening of assessment is not sustainable as the same is barred by limitation; reopening beyond four years from the end of the relevant assessment year. In this regard, he has referred the order under section 143(3) of the Act passed by the Ld. AO on 31.03.2015 and the notice under Section 148 of the Act dated 31.03.2019 for Assessment Year 2012-13 appearing at page 73 of the paperbook filed before us. It was further argued by him that the first and foremost condition in reopening of assessment beyond four years from the end of the relevant assessment year to note that there is escapement of assessment by the assessee in the year under consideration is not made. In fact the reason recorded as claimed by the Revenue has never been supplied to the assessee in order to justify that there was application of mind.

In this regard, the ld. DR sought for adjournment on several occasions to submit the assessment records so as to justify that the satisfaction was recorded against the assessee of escapement of assessment. Relevant to mention that the reassessment was initiated on the basis of the report of the Investigation Wing as it appears from the assessment order itself. However, email dated 21.03.2026 was duly filed by the Ld. DR being the reply made by the Ld. AO to the request made to him seeking the records of the matter including the recording of satisfaction made by the Ld. AO. The Ld. AO categorically mentioned that the assessment recorded was not traceable. Such copy of the said letter sent through email was also supplied to the ld. AR upon which it was contended by the Ld. AR that had there been any such satisfaction recorded by the AO, the same would have been certainly placed before the Bench in order to justify that sufficient satisfaction was recorded alleging escaping assessment by the assessee, in absence of which, it clearly depicts that the assessment has nothing but change of opinion that too merely on the basis of the report of the Investigation Wing as reflected in the assessment order itself. Once, the satisfaction has not been recorded fulfilling the precondition in reopening of assessment under Section 147 of the Act and notice under Section 148 of the Act in the instant case appearing at page 73 of the paper book filed before us does not show any kind of satisfaction recorded by the Ld. AO, the submission made by the Ld. AR is found to be acceptable. Relevant to mention that the Ld. DR has not been able to controvert such contentions made by the Ld. AR.

Thus, having regard to the entire aspect of the matter and in the absence of any satisfaction recorded by the ld. AO, the entire proceeding is found to be vitiated, void-ab-initio and therefore liable to be quashed. With the above observations, we, therefore, quash the assessment proceeding.

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