RAJIV KUMAR,DELHI vs. DCIT, CIRCLE 67(1), DELHI

ITA 3538/DEL/2026Status: DisposedITAT Delhi29 September 2026AY 2011-1212 pages
AI SummaryAllowed

What were the facts?

The assessee, Rajiv Kumar, filed an appeal against the order of the CIT(A) dated 25.02.2026, which upheld the assessment order dated 27.12.2018 passed by the AO. The assessment was made under Section 147 read with Section 143(3) of the Income Tax Act, 1961, for Assessment Year 2011-12. The AO had reopened the assessment based on AIR/CIB information indicating cash deposits of Rs. 22,50,000/- in the assessee's savings account, which appeared unverified against the returned income of Rs. 10,78,290/-. The AO made additions of Rs. 22,50,000/- under Section 69A, Rs. 23,00,000/- and Rs. 14,48,599/- under Section 68, and Rs. 36,17,955/- as Long Term Capital Gains under Section 45. The CIT(A) dismissed the assessee's appeal.

What did the Tribunal hold?

The Tribunal held that the reassessment proceedings initiated under Sections 147/148 of the Act were illegal and set aside. The primary reason for this decision was the lack of a live link or nexus between the information received (AIR/CIB data on cash deposits) and the AO's belief that income had escaped assessment. The Tribunal emphasized that the AO's belief must be based on 'reason to believe' and not mere suspicion, citing the Supreme Court's decision in ITO vs Lakhmani Mewal Das (1976). The Court held that the material available was too tenuous to provide a legally sound basis for reopening. The Tribunal also noted that the assessment could not be reopened for fishing and roving enquiries, referencing decisions from the Bombay and Punjab & Haryana High Courts. Since the entire reassessment was quashed, the grounds raised by the assessee on the merits of the additions were left undecided.

What were the issues?

1. Whether the reassessment proceedings initiated under Sections 147/148 of the Income Tax Act, 1961, are valid, considering the AO's belief was based on suspicion rather than tangible material with a live nexus to escapement of income, and whether proper approval under Section 151 was obtained. Assessee's Contention: The assessee argued that the reopening was based solely on AIR/CIB information of cash deposits, which the AO termed 'unverified' without independent enquiry or application of mind. This constituted suspicion, not 'reason to believe'. The assessee relied on decisions in Bir Bahadur Singh Sijwali v. ITO (2015) and PCIT v. Sheetal Dushyant Chaturvedi (2020) to argue that reassessment cannot be based on suspicion or for fishing enquiries. The assessee also contended that the approval under Section 151 was not properly obtained. Revenue's Contention: The judgment does not record specific arguments from the revenue regarding the validity of reassessment proceedings. However, the CIT(A) had upheld the reopening, finding a 'live nexus' between the deposit and returned income and deeming template sanction sufficient, relying on Experion Developers (P) Ltd. (2020) and Pr. CIT v. AgrohaFincap Ltd. (2025).

Which sections of the Income-tax Act were involved?

Section 147,Section 143(3),Section 69A,Section 68,Section 45,Section 250,Section 148,Section 151,Section 142(1),Section 149(2)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “A”, NEW DELHI

Before: SHRI S. RIFAUR RAHMAN & SHRI VIMAL KUMAR

For Appellant: Shri Ashwani Taneja, Adv, Adv. Sh. Divyansh Dubey, Adv
For Respondent: Shri Balkishan Gopal, Sr. DR
Hearing: 17.09.2026Pronounced: 29.09.2026

PER VIMAL KUMAR, JM:

The appeal filed by the assessee is against the order dated 25.02.2026 of the Ld. Commissioner of Income Tax (Appeals)/NFAC, Delhi [hereinafter referred to as “the CIT(A)”] u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) arising out of assessment order

P a g e | 2 Rajiv Kumar

dated 27.12.2018 of the Ld. Assessing officer / ACIT, Circle 65(1), New Delhi (hereinafter referred to as ‘the AO’) u/s 147 r.w.s. 143(3) of the Act for A.Y.2011-12. 2. Brief facts of the case are that the assessee filed return of income of Rs. 10,78,290/-. The case was reopened u/s 147 of the Act with following reaso

The order continues below.

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