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Facts
The assessee's appeal for assessment year 2020-21 challenges the reopening of assessment proceedings under section 147 r.w.s. 144 of the Income-tax Act, 1961. The assessing authority initiated section 148 proceedings alleging the assessee was a beneficiary of an accommodation entry of Rs. 10 lakhs in the case of M/s. Sarvottam Securities Pvt. Ltd. However, the reassessment framed added varying sums received for M/s. White Line Apparels Pvt. Ltd.
Held
The Tribunal held that the reopening of assessment suffered from a complete non-application of mind by the assessing authority, citing several judicial precedents. This factual discrepancy rendered the reopening unsustainable.
Key Issues
Whether the reopening of assessment under Section 147 was sustainable when the basis for reopening differed significantly from the grounds on which reassessment was made?
Sections Cited
147, 144, 148
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Income Tax Appellate Tribunal, DELHI BENCH: “SMC” NEW DELHI
Before: SHRI SATBEER SINGH GODARA
ORDER This assessee’s appeal for assessment year 2020-21, arises against the Commissioner of Income Tax (Appeals)-30 [in short, the “CIT(A)”], Delhi’s DIN and order no. ITBA/APL/M/250/2025- 26/1083280318(1), dated 03.12.2025 involving proceedings under section 147 r.w.s. 144 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’). Heard both the parties. Case file perused.
Coming to the first and foremost legal issue herein, it emerges that the assessee seeks to challenge validity of the impugned reopening for the precise reason that the learned assessing authority had set into motion section 148 proceedings alleging it as beneficiary of an accommodation entry involving Rs.10 lakhs in case of M/s. Sarvottam Securities Pvt. Ltd., whereas his re-assessment framed on 26.03.2025 has ended up in adding the varying sums as having received for M/s. White Line Apparels Pvt. Ltd. This clinching factual position has gone unrebutted from the Revenue side.
Faced with this situation, I hereby quote Ranbaxy Laboratory Vs. CIT (2011) 335 ITR 136 (Del); CIT Vs. Jet Airways (I) Ltd. (2011) 331 ITR 236 (Bom.); Matchless Infrastructure Pvt. Ltd. Vs. ITO, 2025 (1) TMI 866 (ITAT – Delhi); DCIT Vs. Interlink Foods Pvt. Ltd, & 4671/Del/2024 (ITAT – Delhi); Dinesh Babu Saxena Vs. ITO, (ITAT -Delhi) that such a reopening suffering from complete non- application of mind is not sustainable. Quashed in very terms therefore. All other pleadings on merits between the parties rendered academic.
This assessee’s appeal is allowed.