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Facts
The assessee filed an appeal against an order confirming a reassessment order. The assessee's original return declared an income of Rs. 7,98,950/-. A notice under section 148A(b) was issued based on alleged information of investment in equity shares amounting to Rs. 86,73,233/-.
Held
The Tribunal noted a variation and divergence in the issues on the basis of which the case was reopened, the reasons for reopening, and the conclusions drawn in the orders. It held that such an action of 'change of goalpost' vitiates the assessment proceedings, citing various High Court decisions.
Key Issues
Whether the reassessment proceedings, initiated on grounds of alleged bogus purchases, were vitiated due to a "change of goalpost" in the reasons for reopening and the final conclusions.
Sections Cited
147, 148A(b), 148A(d), 144B, 148
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “C” BENCH, DELHI
Before: SHRI ANUBHAV SHARMA& SHRI NAVEEN CHANDRA
This appeal is preferred by the assessee against the order dated 19.02.2025 of the Ld. National Faceless Appeal Centre (NFAC) Delhi (hereinafter referred as Ld. First Appellate Authority or in short Ld. ‘FAA’)
P a g e | ShaliniChhabra(AY: 2018-19) in DIN & Order No : ITBA/NFAC/S/250/2024-25/1073446259(1) arising out of the assessment order dated 16.03.2023 u/s 147 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) passed by the Assessment Unit, Income Tax Department, Delhi for AY: 2018-19.
On hearing both sides we find that the case set up by the assessee before us was primarily on the legal ground No. 4 & 5 which are reproduced below for convenience:
“4. On the facts and circumstances of the case, learned CIT(A), NFAC has erred both on the facts and in law in confirming the reassessment order passed by the AO despite the fact that the show-cause notice issued under section 148A(b) of the Act, order passed under section 148A(d), notice issued under section 148 and consequent reassessment order passed under section 147 read with section 144B of the Act by the AO are illegal, invalid, without jurisdiction and the same have been passed without following the statutory conditions and procedures prescribed under the Act.
5. On the facts and circumstances of the case, the learned CIT(A), NFAC has erred both on facts and in law in confirming the action of AO despite the fact that the order under section 147 read with section 144B of the Act has been passed ignoring the first proviso to section 148 which provides that notice under section 148 shall not be issued unless there is "information" [as
P a g e | ShaliniChhabra(AY: 2018-19) defined under Explanation 1 to section 148] with the assessing officer which suggests that income chargeable to tax in the case of assessee for the relevant assessment year has escaped assessment.”
At the outset the ld. Counsel has pointed out about the delay of 100 days in filing of the appeal for which we find an application for condonation has been filed asserting that assessee is naïve in using computers and did not access the computer and the authorized representative had not informed of the impugned order being passed. The plea is supported by affidavit. As the assessee is an individual woman, further the delay is not of substantial period causing any prejudice to the cause of justice, the delay is condoned and the appeal is admitted for hearing.
It comes up that assessee is an individual filed return declaring income of Rs.7,98,950/- and notice u/s 148A(b) dated 19.03.2022 was issued to the assessee on the basis of alleged information that the assessee has made investment in equity shares at Rs.86,73,233/-and the copy of this notice is made available at page 5 of the paper book.Then order u/s 148A(d) of the Act was issued on 31.03.2022 and the copy of the order is placed in the paper book from page No.6 to 8 and from the relevant page 7, we find that the P a g e | ShaliniChhabra(AY: 2018-19) allegation is that “the assessee has made expenses through bogus purchases of shares amounting to Rs.86,73,233/- during the year under consideration.”This order mentions of the notice dated 19.03.2022 being issued.
Now the case of the assessee is that assessee has not made any investment in equity shares. As we go through the impugned assessment order, we find that in para 3.2 AO incorporates the issue involved of ‘assessee had made expenses through bogus purchases amounting to Rs.86,73,233/- during the financial year 2017-18’ then to give the details of allegation alleges as follows:
“As stated above, as per the information available with the department, the assessee have made expenses through bogus purchases amounting to Rs.86,73,233/- from M/s Swastik Enterprise Prop. Shri Rahul Khandelwal (PAN- EUBPK2726N). Swastik Enterprise has shown realization of ITC in GSTR-3B, which was in excess of ITC available in the GSTR-2A and did not exist at its registered premises. Further, Swastik Enterprise has issued invoices showing supplies of carbon box, bars and iron rods and ferrous waste of scrap etc. on paper. Thus, Swastik Enterprise had availed & utilized ineligible ITC without receipt of good and services.
In order to further verify the genuineness of the purchases, show cause notice was issued on 27.02.2023 for furnishing the following details:
P a g e | ShaliniChhabra(AY: 2018-19) 1. Whether goods were received through, if yes, please provide the copies of the bilty. 2 Also furnish toll tax receipts in support of transportation. 3. Or any other documentary evidence which can prove that the items/goods were delivered. As the assessee has failed to furnish any reply/explanation, therefore, in the absence of any documentary evidence, therefore, the purchases of Rs.86,73,233/- are treated as bogus purchases.”
The aforesaid discussion establishes that there is a complete variation and divergence of issues on the basis of which the case was reopened, assessee was called upon by notice u/s 148A(b) to explain the reasons for reopening and the ultimate conclusions drawn in order u/s 148A(d) and in the final assessment order. Such an action of ‘change of goalpost’ has been held to vitiate the whole of the assessment proceedings and reliance for this is rightly placed by ld. Counsel on the decision of Hon’ble Delhi High Court in the case of Catchy Prop Build Private Limited Vs. ACIT in W.P. (C)
13734/2022; Hon’ble Delhi High Court in The case of Aadi India Private Ltd. Vs. ACIT in W.P. (C) 11935/2023; Hon’ble Delhi High Court in the case of Usha Rani Girdhar Vs. ITO, W.P (C) 16090/2022; Hon’ble Calcutta High Court in the case of Excel Commodity and Derivative Pvt. Ltd. Vs. Union of India AndOrs APOT/132/2022 IA No. GA/1/2022
P a g e | ShaliniChhabra(AY: 2018-19) Hon’ble Punjab And Haryana High Court in the case of Dinesh Singla Vs. ACIT (2024) PHHC: 113336 Hon’ble Delhi High Court in the case of ATS Infrastructure Limited in W.P. (C) 3804/2023 Hon’ble Delhi High Court in the case of Banyan Real Estate Fund Mauritius Vs. ACIT in W.P. (C) 10485/2023.
In the light of the aforesaid discussion we are inclined to sustain the ground No. 4 & 5. The appeal of assessee is allowed. The impugned assessment is quashed.
Order pronounced in the open court on 16.01.2026