DCIT, CIRCLE - 7(1), KOLKATA, KOLKATA vs. ARENA TEXTILES & INDUSTRIES LIMITED, KOLKATA

ITA 2082/KOL/2025Status: DisposedITAT Kolkata07 October 2026AY 2009-20106 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the reopening of assessment was bad in law. The assessment was originally framed under Section 143(3) on 26.12.2011. The notice for reopening under Section 148 was issued on 30.03.2016, which is more than four years after the end of the relevant assessment year (AY 2009-10). According to the first proviso to Section 147 of the Act, reopening beyond four years is permissible only if there was a failure on the part of the assessee to fully and truly disclose all material facts. The Tribunal observed that the reasons recorded by the AO for reopening did not contain any whisper of such failure on the part of the assessee. Therefore, the reopening did not meet the parameters of the first proviso to Section 147. The Tribunal relied on its co-ordinate bench's decision in DCIT Vs. Murlidhar Ratanlal Exports Limited and the Hon'ble Apex Court's decision in ACIT vs. CEAT Ltd. Consequently, the Cross Objection of the assessee was allowed, quashing the reopening of assessment. As a result, the Revenue's appeal challenging the deletion of additions on merit became infructuous and was dismissed.

What were the facts?

The appeals by the Revenue and the Cross Objection by the assessee, Arena Textiles & Industries Limited, are against the order of the National Faceless Appeal Centre, Delhi, dated 17.07.2025, for Assessment Year (AY) 2009-10. The Revenue's appeal challenges the deletion of an addition of ₹2,67,00,000/- made by the Assessing Officer (AO) on account of unsecured loans. The assessee's Cross Objection challenges the validity of the reassessment proceedings initiated under Section 148 of the Income Tax Act, 1961, and the consequent assessment order. The original assessment was framed under Section 143(3) on 26.12.2011. The reassessment notice under Section 148 was issued on 30.03.2016, and the reassessment order under Section 147/143(3) was passed on 27.12.2016, including the addition of ₹2,67,00,000/- as unexplained cash credit under Section 68.

What were the issues?

1. Whether the reopening of assessment under Section 147 of the Income Tax Act, 1961, by issuing notice under Section 148 dated 30.03.2016, after more than four years from the end of the relevant assessment year, is valid, given that the assessee had disclosed all material facts in its original return and during the assessment proceedings under Section 143(3) dated 26.12.2011? Assessee's contention: The reopening is bad in law and the consequent assessment order needs to be quashed because the notice under Section 148 was issued after the expiry of four years from the end of the assessment year, and the assessee had fully and truly disclosed all material facts. The assessee relies on the decision in DCIT Vs. Murlidhar Ratanlal Exports Limited and ACIT vs. CEAT Ltd. (SC). Revenue's contention: The judgment records no specific contention from the Revenue regarding this issue.

Which sections of the Income-tax Act were involved?

Section 148,Section 147,Section 143(3),Section 68,Section 139(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH, KOLKATA

Before: SHRI RAJESH KUMAR, AM & SHRI PRADIP KUMAR CHOUBEY, JM

For Appellant: Shri Prateek Tulsiyan &
For Respondent: Shri Nilkantha Chakraborthy, DR
Hearing: 21.09.2026Pronounced: 07.10.2026

Heard together (2 matters)

CO No.38/KOL/2026
ITA No. 2082/KOL/2025

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

Per Rajesh Kumar, AM:

In these appeals of Revenue and CO of the assessee are against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 17.07.2025 for the AY 2009-10. ITA No. 2082/KOL/2025 & CO No. 38/K/26 Arena Textiles & Industries Limited; A.Y. 2009-10

2.

The only issue raised by the

The order continues below.

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