M/S DOREMAN DISTRIBUTORS PVT. LTD.,KOLKATA vs. ITO, W-1, SHILLONG

ITA 399/GTY/2026Status: DisposedITAT Guwahati22 September 2026AY 2012-1320 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal allowed the appeal of the assessee. The Tribunal noted that the assessee's case was completed under Section 143(3) on 23.03.2015 with additions. Following a Section 264 revision, the AO passed an order on 27.05.2016 accepting the share capital as genuine. The AO then issued a notice under Section 148 on 25.03.2019, alleging receipt of share capital from two bogus/shell companies, making an addition of Rs. 2.35 Crore from M/s Bhagyashree Vincom Pvt. Ltd. The Tribunal found that the reassessment was 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 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 reason recorded by the AO, stating that the company received funds from 'bogus/shell companies appearing in the data base,' was not tangible material to reopen the case. Relying on the Supreme Court judgment 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 material, and reopening a case already examined is not permitted. Therefore, the appeal of the assessee was allowed.

What were the facts?

The assessee, M/s Doreman Distributors Pvt. Ltd., filed an appeal against the order of the Commissioner of Income-tax (Appeals). The assessment year in question is 2012-2013. The original assessment for AY 2012-13 was completed on 23.03.2015, with additions made under Section 68 and Section 14A. The assessee filed a revision application under Section 264, which led to a fresh assessment order on 27.05.2016, where the Assessing Officer (AO) accepted the share capital as genuine. Subsequently, the AO issued a notice under Section 148 on 25.03.2019, proposing to reopen the assessment based on information from the Investigation Wing regarding funds received from shell companies. The CIT(A) upheld the reassessment.

What were the issues?

1. Whether the reassessment proceedings initiated under Section 147 were valid, given that the AO's reasons were solely based 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 was valid when the subject matter had already been examined and accepted as genuine by the AO in a prior assessment order under Section 143(3) r.w.s. 264 dated 27.05.2016, thus amounting to a change of opinion? 3. Whether the recorded reasons were intrinsically defective due to factual inconsistencies in the amounts of escaped income stated therein compared to the show-cause notice and the final assessment? 4. Whether a valid 'reason to believe' could arise for a transaction already assessed and re-examined, without any allegation of failure by the assessee to make a full and true disclosure, especially when invoking extended limitation under Section 147 after four years had elapsed? 5. Whether the reassessment order was liable to be annulled due to the late issuance of the notice under Section 143(2) after notices under Section 142(1) and the show-cause notice? 6. Whether the notice under Section 142(1) issued prior to the filing of the return under Section 148 was legally valid? 7. Whether the addition of Rs. 2,35,00,000/- under Section 68 in respect of share capital from M/s Bhagyashree Vincom Pvt. Ltd. was sustainable, given that this transaction was previously examined and accepted as genuine in the order under Section 143(3)/264 dated 27.05.2016? 8. Whether the assessee had discharged the 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' was perverse and contrary to the record? 10. Whether the interest of Rs. 27,39,492/- under Section 234B was chargeable, being consequential to the impugned addition? Assessee's Contentions: The reassessment was invalid as it was based on a 'reason to suspect' and a change of opinion, lacking independent enquiry. The prior assessment order was binding. The reasons recorded were inconsistent. No failure to disclose was alleged. The notice under Section 143(2) was issued late. The notice under Section 142(1) was issued prematurely. The addition under Section 68 was unsustainable as the transaction was already accepted as genuine. The assessee discharged its onus under Section 68. The CIT(A)'s findings were perverse. Interest under Section 234B was not chargeable. Revenue's Contentions: The CIT-DR 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 CIT(A) had discussed the issue in detail, and the assessee received money from bogus/shell companies. The revenue argued that in the original assessment, the entire share capital was added.

Which sections of the Income-tax Act were involved?

Section 147,Section 250,Section 143(3),Section 264,Section 68,Section 14A,Section 148,Section 142(1),Section 143(2),Section 234B

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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