ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 1, RAIPUR, NAVA RAIPUR vs. M/S HI TECH POWER AND STEEL LIMITED, RAIPUR

ITA 806/RPR/2025Status: HeardITAT Panaji06 October 2026AY 2012-1319 pages
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What did the Tribunal hold?

The Tribunal held that the reassessment proceedings initiated under Section 148 were bad in law because the notice was issued after a lapse of 4 years from the end of the assessment year, and the AO had not alleged any failure on the part of the assessee to disclose fully and truly all material facts. Consequently, the proviso to Section 147 of the Income Tax Act, 1961, was not complied with. Following the precedent set by the Hon'ble Jurisdictional High Court and other ITAT judgments, the Tribunal concluded that the notice under Section 148 was bad in law, rendering the consequential assessment order void-ab-initio. Accordingly, the additional ground raised by the assessee concerning the validity of the reassessment proceedings was allowed. As a result of this decision, all other grounds raised by the assessee were dismissed as un-adjudicated. For the Revenue's appeal, the Tribunal noted that since it had already held the notice under Section 148 to be bad in law, the grounds raised by the Revenue became infructuous. Therefore, the Revenue's appeal was dismissed without adjudicating on the merits of the addition. The ratio decidendi is that reassessment proceedings initiated beyond four years from the end of the relevant assessment year are void ab initio if the AO fails to record satisfaction regarding the assessee's failure to disclose material facts, as mandated by the first proviso to Section 147.

What were the facts?

The assessee, Hi Tech Power And Steel Limited, filed an appeal against the order of the Ld. CIT(A) for Assessment Year 2012-13. The Ld. CIT(A)'s order was passed under Section 250 of the Income Tax Act, 1961, stemming from an Assessment Order under Section 143(3) r.w.s. 147 dated 30.12.2019. The original assessment for AY 2012-13 was completed under Section 143(3) on 30.05.2014. The assessee's case was selected for complete scrutiny in the original assessment, and specific inquiries were made regarding share capital and premium, which were accepted. A notice under Section 148 was issued on 30.03.2019, initiating reassessment proceedings. The assessee filed its return on 13.04.2019, and the reassessment was completed on 30.12.2019. The assessee also filed an appeal against the original scrutiny assessment order.

What were the issues?

1. Whether the reassessment proceedings initiated under Section 147 of the Income Tax Act, 1961, are bad in law and liable to be quashed due to a mere change of opinion and non-application of mind by the Assessing Officer (AO), given that the assessee's case was already subjected to a prior scrutiny assessment? (Assessee's contention: The AO failed to consider the prior completed assessment, indicating mechanical formation of belief regarding escapement of income and rendering the assumption of jurisdiction under Section 147 invalid. The assessee relied on the principle that reassessment is an exceptional power requiring conscious and reasoned satisfaction. 2. Whether the reassessment proceedings initiated under Section 147 are barred by limitation as per the first proviso to Section 147, given that the notice under Section 148 was issued after the expiry of four years from the end of the relevant assessment year, without the AO recording satisfaction about any failure on the part of the assessee to disclose fully and truly all material facts? (Assessee's contention: The AO did not allege any failure on the part of the assessee to disclose material facts, and since the notice was issued beyond four years, the proviso to Section 147 was not complied with, making the proceedings void ab initio. The assessee relied on judgments like Sumangal Techpark (P) Ltd. vs. ITO. 3. Whether the Ld. CIT(A) erred in deleting the addition of Rs. 3,65,00,000/- made by the AO on account of unexplained credit from an investor company, M/s Shree Sharda Tradecom Pvt. Ltd.? (Revenue's contention: The Ld. CIT(A) erred in deleting the addition despite accepting that the assessee introduced unaccounted income through a structured arrangement, and by relying on the settlement under the Vivad Se Vishwas Act, 2020, which is assessee-specific and does not confer automatic benefits.)

Which sections of the Income-tax Act were involved?

Section 250,Section 143(3),Section 147,Section 148,Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, RAIPUR BENCH, RAIPUR

Before: SHRI PARTHA SARATHI CHAUDHURY & SHRI Dr. DIPAK P. RIPOTE

For Appellant: Shri Veekaas S Sharma, CA
For Respondent: Shri Rituparna Namdeo, CIT-DR

PER Dr. DIPAK P. RIPOTE, A.M : These two appeals filed the Assessee and Revenue against the order of the Learned Commissioner of Income Tax (Appeals), Raipur-3 [Ld.CIT(A)], passed u/s. 250 of the Income Tax Act, 1961 (‘the Act’) for AY 2012-13 on 07.10.2025, emanating from the Assessment Order u/s 143(3) r.w.s. 147 of the Act, dated 30.12.2019. 2. Since, the issue involved in both the appeals is same, for the sake of convenience, these two appeals were heard together and are being dispose

The order continues below.

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