KISHORI CAPITAL MARKETS PVT. LTD.,STEPHEN HOUSE vs. ITO WARD 2(1), PATNA, LOK NAYAK BHAWAN

ITA 154/PAT/2025Status: HeardITAT Patna22 September 2026AY 2013-145 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the reopening of the assessment for assessment year 2013-14 was invalid. The Tribunal noted that the first proviso to Section 147 of the Income Tax Act, 1961, mandates that if an original assessment has been completed under section 143(3) and the reopening is sought beyond four years, there must be a failure on the part of the assessee to disclose fully and truly all material facts. The Tribunal observed that the reasons recorded for reopening did not contain any mention of such a failure by the assessee. Respectfully following the decision of the Coordinate Bench in the assessee's own case (ITA No.249/Pat/2023 for AY 2015-16), and also citing decisions of various Hon'ble High Courts and the Hon'ble Supreme Court in ACIT v. CEAT Ltd. (2022) 449 ITR 171 (SC), the Tribunal concluded that the reopening was bad in law. Consequently, the consequential assessments were also quashed. The appeal of the assessee was allowed.

What were the facts?

The assessee, Kishori Capital Markets Pvt. Ltd., filed an appeal against the order of the CIT(A), NFAC, Delhi, for assessment year 2013-14. The original assessment was completed under section 143(3) on 23.02.2016. The reopening of assessment was initiated on 31.03.2021, which is beyond four years from the end of the relevant assessment year. The reasons recorded for reopening did not explicitly mention any failure on the part of the assessee to disclose fully and truly all material facts required for the assessment. The assessee contended that the reopening beyond four years is bad in law due to the absence of such a mention, relying on a coordinate bench decision in its own case for assessment year 2015-16.

What were the issues?

1. Whether the reopening of assessment for assessment year 2013-14, initiated beyond four years from the end of the assessment year, is valid in law, considering the absence of any recorded failure on the part of the assessee to disclose fully and truly all material facts, as required by the first proviso to Section 147 of the Income Tax Act, 1961. Assessee's contentions: The assessee argued that since the original assessment was completed under section 143(3) and the reopening was initiated beyond four years, the first proviso to Section 147 is applicable. As the reasons recorded for reopening do not mention any failure on the part of the assessee to disclose fully and truly all material facts, the reopening is bad in law. The assessee relied on the decision of the Coordinate Bench in its own case (ITA No.249/Pat/2023 for AY 2015-16). Revenue's contentions: The revenue supported the order of the Assessing Officer and the CIT(A). It was submitted that the reasons for reopening indicated that information was available in the insight portal suggesting the loss from derivative trading was fictitious, thus justifying the reopening. The revenue prayed that the reopening be upheld.

Which sections of the Income-tax Act were involved?

Section 147,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PATNA BENCH PATNA

Before: SHRI GEORGE MATHAN & SHRI LAXMI PRASAD SAHU

Hearing: 22/09/2026Pronounced: 22/09/2026

Per George Mathan, JM: This is an appeal filed by the assessee against the order of the CIT(A), NFAC, DELHI [hereinafter referred to as the ‘CIT(A)’] in appeal no.NFAC/2012-13/10110510 dated 06.07.2023 for the assessment year 2013-13. 2. Shri Sunil Surana, AR appeared on behalf of the assessee and Shri Ravi Kant Chowdhary, Sr. D.R. represented on behalf of the revenue.

3.

It was submitted by the ld. AR that the original assessment in the case of the assessee for the impugned assessment year 2013- 14 was completed u/s 143(3)

The order continues below.

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