SHERINE LYNDEM,RI-BHOI vs. ITO W-15(21), BYRNIHAT, MEGHALAYA, BYRNIHAT

ITA 309/GTY/2026Status: DisposedITAT Guwahati23 September 2026AY 2020-202120 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal allowed the appeal of the assessee. The Tribunal found that the reassessment proceedings were initiated beyond the period of 4 years, and there was no allegation of the assessee failing to disclose fully and truly all material facts. The Tribunal noted that the AO had already examined the entire issue and accepted the assessee's plea in the proceedings under Section 143(3)/264. The Tribunal observed that the reasons recorded for reopening the case stated that information appeared in the database, which cannot be considered tangible material to reopen the case. Relying on the judgment of the Hon'ble Apex Court in Principal Commissioner of Income-tax-2 vs. L & T Ltd., the Tribunal held that in the absence of any failure on the part of the assessee to disclose fully and truly all material facts, reassessment proceedings could not be initiated after the expiry of four years. The Tribunal concluded that this was a complete change of opinion by the AO without any tangible materials, and reopening a case already examined by the AO is not permitted. Therefore, the appeal of the assessee was allowed.

What were the facts?

The assessee, M/s Doreman Distributors Pvt. Ltd., filed its return for Assessment Year 2012-2013. The Assessing Officer (AO) initiated reassessment proceedings under Section 147, alleging escaped income of Rs. 3.10 Crores from two shell companies, M/s Bhagyashree Vincom Pvt. Ltd. and M/s Bhawani Enterprise. The original assessment for AY 2012-2013 was completed on March 23, 2015, under Section 143(3), which included an addition of Rs. 27,81,25,000/- under Section 68. The assessee filed a revision application under Section 264, and the CIT(A) directed the AO to pass a fresh order. Consequently, the AO passed an order on May 27, 2016, under Section 143(3)/264, accepting the share capital as genuine. Subsequently, a notice under Section 148 was issued on March 25, 2019, to reopen the assessment.

What were the issues?

1. Whether the reassessment proceedings initiated under Section 147 are valid, given that the AO's reasons were based solely on information from the Investigation Wing without independent enquiry, constituting a 'reason to suspect' rather than a 'reason to believe' as mandated by Section 147? 2. Whether the reassessment is void due to being a mere change of opinion, as the subject matter was previously examined and accepted as genuine in the order passed under Section 143(3) r.w.s. 264 dated May 27, 2016, which was a final assessment order? 3. Whether the recorded reasons were intrinsically defective due to factual inconsistencies in the amounts of escaped income stated therein, in the show-cause notice, and in the final assessment? 4. Whether a valid 'reason to believe' could arise for a transaction already assessed under Section 143(3) and re-examined under Section 143(3)/264, without any allegation of failure by the assessee to make a full and true disclosure, especially when more than four years had elapsed? 5. Whether the reassessment order is liable to be annulled because the notice under Section 143(2) was issued after the notices under Section 142(1) and the show-cause notice, thus vitiating the jurisdiction? 6. Whether the notice under Section 142(1) issued prior to the filing of the return under Section 148 is legally valid and can be used for adverse inference? 7. Whether the addition of Rs. 2,35,00,000/- under Section 68 in respect of share capital and premium from M/s Bhagyashree Vincom Pvt. Ltd. is sustainable, given that this transaction was examined and accepted as genuine in the order under Section 143(3)/264 dated May 27, 2016? 8. Whether the assessee discharged the full statutory onus under Section 68 by establishing all three required ingredients? 9. Whether the CIT(A)'s finding that the assessee's explanations were 'largely unilateral and self-serving' is perverse and contrary to the record? 10. Whether the interest of Rs. 27,39,492/- under Section 234B is chargeable, being consequential to the addition? Assessee's Contentions: The assessee argued that the reassessment was initiated without independent enquiry, based on a 'reason to suspect'. It was also argued that the reassessment constituted a change of opinion on an issue already examined and accepted. The assessee highlighted inconsistencies in the amounts mentioned in the reasons recorded, show-cause notice, and assessment. It was contended that no valid reason to believe arose as the transaction was already assessed and no failure to disclose was alleged. The assessee also argued that the late issuance of notice under Section 143(2) and the issuance of Section 142(1) notice before filing the Section 148 return vitiated the proceedings. The assessee claimed to have discharged its onus under Section 68 and that the CIT(A)'s findings were perverse. The interest under Section 234B was challenged as consequential. Revenue's Contentions: The Revenue relied on the CIT(A)'s order and the reassessment order, submitting that the assessee provided a late reply to the show-cause notice, indicating an attempt to avoid in-depth examination. The Revenue argued that the assessee received money from bogus/shell companies and that in the original assessment, the entire share capital was added back. The CIT-DR submitted that the CIT(A) discussed the issue in detail.

Which sections of the Income-tax Act were involved?

Section 147,Section 143(3),Section 264,Section 68,Section 148,Section 142(1),Section 143(2),Section 234B,Section 14A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, GUWAHATI BENCH, GUWAHATI

For Appellant: Shri Sidharth Jhajharia, Advocate
For Respondent: Shri P. S. Thuingaleng, CIT-DR
Hearing: 03.09.2026Pronounced: 22.09.2026

PER LAXMI PRASAD SAHU, AM: This appeal is filed by the assessee against the order passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) by the learned Commissioner of Income-tax (Appeals), Kolkata- 27 [hereinafter referred to as ‘the ld. CIT(A)’], dated 18.05.2026 vide DIN No. ITBA/APL/S/2026-27/1089064041(1) on the following grounds of appeal:

“1. That the Ld. CIT(A) erred in law in upholding the validity of the reassessment u/s 147 notwithstanding that the Assessing Officer recorded reasons solely on the basis of information received from the Investigation Wing, without conducting any independent enquiry or verific

The order continues below.

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