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Facts
The assessee's appeal for Assessment Year 2020-21 challenges an order which arose from proceedings under section 147 read with section 144 of the Income Tax Act. The reopening was initiated based on the assessee being treated as a seller/transferor of property, while the assessment included additions under section 56(x)(b) and cash deposits.
Held
The Tribunal noted that the legal issue of the correctness of the reopening was paramount. The reopening was initiated for specific reasons which were inconsistent with the grounds for the assessment, rendering it unsustainable in law. The reopening was quashed.
Key Issues
The primary issue was the validity and correctness of the reopening of assessment initiated under section 147 of the Income Tax Act.
Sections Cited
147, 144, 56(x)(b), 148A(b)
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Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’, NEW DELHI
Before: Sh. Satbeer Singh Godara
ORDER This assessee’s appeal for Assessment Year 2020-21 arises against the CIT(A)/NFAC, Delhi’s DIN & order No. ITBA/NFAC/S/250/2025-26/107983568(1) dated 21.08.2025, in proceedings u/s 147 r.w.s. 144 of the Income Tax Act, 1961 (in short “the Act”).
Heard both the parties at length. Case file perused.
Delay of 3 days in filing of the instant appeal is condoned in the larger interest of justice in light of Collector Land Acquisition vs. Mst. Katiji & Ors (1987) 167 ITR 471 (SC).
4. It is noticed at the outset during the course of hearing that the assessee/appellant raises the first and foremost legal issue of correctness of the impugned reopening itself. This is Shimla for the precise reason that the learned departmental authorities had initiated the same going by section 148A(b) order dated 07.03.2024 treating her as seller/transferor of the property whereas the assessment framed on 20.03.2025 has invoked section 56(x)(b) addition of Rs.14,40,000/- along with the cash deposits at Rs.6,00,000/-; respectively.
That being the case, the Revenue could hardly dispute that the learned assessing authority nowhere been the impugned addition based on the foregoing sole reason of reopening. This reopening found is not sustainable in law. This being the clinching case, I hereby quote Ranbaxy Laboratories Ltd. vs. Union of India (2011) 336 ITR 136 (Del.) and CIT vs. Jet Airways (India) Ltd. (2011) 331 ITR 236 (Bom.) to quash the impugned reopening for the above precise reason in very terms.