ACIT, NEW DELHI vs. RAVI CONSTRUCTION PVT LTD, DELHI

ITA 4005/DEL/2026Status: DisposedITAT Delhi30 September 2026AY 2019-208 pages
AI SummaryDismissed

What were the facts?

The assessee, Ravi Construction Pvt. Ltd., filed its return of income for Assessment Year 2019-20 on October 28, 2019. A search on related parties revealed the assessee received unsecured loans totaling Rs. 1,25,00,000/- from M/s Lenient Consultants Pvt. Ltd. (Rs. 60,00,000/-), M/s Everyday Infrastructure Pvt. Ltd. (Rs. 50,00,000/-), and M/s Highrise Securities and Trading Pvt. Ltd. (Rs. 25,00,000/-). The Assessing Officer (AO) found these entities to be 'non-descript' and shell companies with paper reserves. The AO treated the loans as unexplained credits under Section 68 and added Rs. 1,10,00,000/- and Rs. 25,00,000/- respectively. Additionally, commission expenses of Rs. 3,30,000/- and Rs. 75,000/- were added under Section 69C, and interest paid on these loans (Rs. 1,84,191/- and Rs. 53,630/-) was disallowed under Section 37. The total assessment was Rs. 1,41,43,620/-. The CIT(A) quashed the assessment. The revenue appealed, and the assessee filed a cross-objection.

What did the Tribunal hold?

The Tribunal upheld the decision of the CIT(A) to quash the assessment. The primary ground for quashing was the absence of a notice under Section 143(2) of the Act. The Tribunal noted that the AO issued a notice under Section 148, and the assessee responded by requesting their original return be treated as the return in response to the Section 148 notice. The assessment order itself did not mention the issuance of a Section 143(2) notice. The Tribunal relied on the Delhi Tribunal's decision in R.K. Gupta vs. ITO and the Supreme Court's ruling in ACIT vs. Hotel Blue Moon, which held that assessments framed without a Section 143(2) notice are liable to be quashed. Regarding the revenue's contention about the unsigned reply, the Tribunal followed the Kerala High Court's decision in CIT vs. Masoneilan (India) Ltd., holding that absence of proper signature or verification is curable under Section 292B and does not invalidate the return. Consequently, the revenue's appeal was dismissed, and the assessee's cross-objection was rendered infructuous.

What were the issues?

1. Whether the assessment proceedings under Section 147 of the Income Tax Act, 1961, were invalid due to the absence of a notice under Section 143(2), even though the assessee's reply dated 31.3.2023, treating the originally filed return as a response to the notice under Section 148, was not signed by an authorized person as required by Section 140. - Revenue argued that the assessment was invalid without a Section 143(2) notice and that the assessee's reply was defective. - Assessee argued that the initiation of proceedings under Sections 147, 148A, and 148 was invalid due to non-compliance with mandatory pre-requisite conditions. 2. Whether the CIT(A) erred in deleting the addition of Rs. 1,25,00,000/- under Section 68 on account of unsecured loans/unexplained credit from non-descript entities. - Revenue contended that the loans were accommodation entries from bogus companies. 3. Whether the CIT(A) erred in deleting the addition of Rs. 2,38,621/- under Section 69C for payments made to non-descript entities against unsecured loans/unexplained credit.

Which sections of the Income-tax Act were involved?

Section 147,Section 143(2),Section 148,Section 144,Section 68,Section 69C,Section 37,Section 140,Section 154,Section 292B,Section 148(1),Section 139,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “F”, DELHI

Before: SH. M. BALAGANESH & SH. SUDHIR KUMAR

For Appellant: Adv. & Ms. Somya Jain, CA
Hearing: 23/09/2026Pronounced: 30/09/2026

Heard together (2 matters)

C.O. No. 253/Del/2026
ITA No. 4005/Del/2026

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

PER SUDHIR KUMAR, JUDICIAL MEMBER:

This appeal by the revenue and cross objection by the assessee are directed against the order of the Ld. Commissioner of Income Tax (Appeals)-23, Delhi [hereinafter referred to as “Ld. CIT(A)”] vide order dated 20-01-2026 arising out the Assessment Order dated 30-3-2024 passed

under section 147 r.w.s 144 3(3) of the Income Tax

The order continues below.

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