SHYAM SUNDER,BALLABGARH vs. ITO, WARD 2(3), FARIDABAD

ITA 1268/DEL/2026Status: DisposedITAT Delhi30 September 2026AY 2014-1520 pages
AI SummaryAllowed

What were the facts?

The assessee, an individual, is in appeal before the Income Tax Appellate Tribunal (ITAT) against orders of the CIT(A)/NFAC for Assessment Years (AYs) 2013-14, 2014-15, 2015-16, and 2016-17. The appeals arise from assessment orders passed by the Assessing Officer (AO) under Section 144 of the Income Tax Act, 1961, which were subsequently set aside by the CIT(A) to the file of the AO for fresh assessment. The assessee had filed applications for condonation of delay in filing these appeals, which were allowed by the ITAT. The original assessment proceedings for AY 2013-14 were reopened under Section 147, with a notice under Section 148 issued on 30.03.2021. The assessee failed to respond to multiple notices, leading to a best judgment assessment under Section 144 with an addition of Rs. 55,82,620/- under Section 68. The CIT(A) set aside the assessment order without deciding jurisdictional grounds.

What did the Tribunal hold?

The Tribunal held that the CIT(A) had failed to follow the provisions of Section 250(6) of the Act by not adjudicating the appeal as per law, particularly by not deciding the jurisdictional grounds raised by the assessee. The CIT(A) observed that the assessee should get an opportunity to present their case and file evidence, indicating a failure to adjudicate the legal grounds alleging that the reopening of assessment was bad in law. The Tribunal found that the CIT(A)'s order restoring the matter to the AO without deciding these legal grounds was not in accordance with the law laid down by the jurisdictional High Court. Therefore, the Tribunal allowed the assessee's grounds related to the denial of effective appellate adjudication and set aside the impugned order. The matter was restored to the file of the CIT(A) for deciding the appeals afresh after affording the assessee an effective opportunity of hearing and deciding all grounds, including the jurisdictional ones, in accordance with law. The finding in the lead case was to apply mutatis mutandis to the other appeals. The appeals were allowed for statistical purposes.

What were the issues?

1. Whether the reassessment order is void ab initio due to the notice under Section 148 dated 30.03.2021 falling within the transitional period as per the Supreme Court's ruling in Rajeev Bansal & Anr. v. Union of India, requiring compliance with Section 148A procedures. 2. Whether the CIT(A) erred in misapplying discretionary powers under Section 251(1)(a) by setting aside the assessment order instead of annulling it, given findings of lack of tangible material, mechanical sanction under Section 151, and an invalid ex-parte order. 3. Whether the Assessing Officer recorded "reasons to believe" based on vague, uncorroborated, or borrowed information, contrary to settled law. 4. Whether the approval under Section 151 was obtained late and mechanically, vitiating the AO's jurisdiction. 5. Whether the assessee was denied file inspection, impacting the assessment. 6. Whether additions were based on suspicion and conjecture without corroborative evidence. 7. Whether there was an absence of a nexus between the information relied upon and the alleged escapement of income. 8. Whether the assessment was based on "reasons to suspect" instead of "reasons to believe." 9. Whether the CIT(A) denied effective appellate adjudication by setting aside the assessment without deciding jurisdictional grounds. Assessee's Contentions: The assessee argued that the reassessment order is void ab initio as the Section 148 notice was issued during the transitional period, requiring Section 148A compliance, which was not done. They contended that the CIT(A) should have annulled the assessment due to jurisdictional defects, including mechanical Section 151 approval and lack of tangible material. The assessee also argued that reasons to believe were based on vague information, file inspection was denied, additions were based on suspicion, and there was no nexus between information and escapement of income. They further argued that the assessment was based on "reasons to suspect" and that the CIT(A) failed to adjudicate jurisdictional grounds, denying effective appellate adjudication. Revenue's Contentions: The judgment does not record specific contentions from the Revenue.

Which sections of the Income-tax Act were involved?

Section 143,Section 144,Section 147,Section 148,Section 148A,Section 151,Section 250,Section 251,Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘H’, NEW DELHI

Before: Sh. Ramit Kochar & Sh. Raj Kumar Chauhan

Hearing: 28.09.2026Pronounced: 30.09.2026

Heard together (4 matters)

ITA No. 1267/Del/2026
ITA No. 1268/Del/2026
ITA No. 1295/Del/2026
ITA No. 1339/Del/2026

Read from the judgment's own cause title. This page is filed under one of them.

Per Bench: These appeals of the assessee are directed against the orders even dated 04.02.2025 of ld. CIT(A)/NFAC, Delhi passed u/s 250 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) wherein assessment order dated 16.03.2022, 27.03.2022 respectively, was set aside to the file of the AO to make a fresh assessment after giving opportunity to the appellant after verification of the facts of the case and the principles of law.

2.

By this common order, we propose to decide the ITA No

The order continues below.

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