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Income Tax Appellate Tribunal, DELHI BENCH “SMC”, NEW DELHI
Before: SHRI MAHAVIR SINGH
Appellant by : Shri Suresh Gupta, CA Respondent by : Shri Manoj Kumar, Sr. DR. Date of hearing : 03.09.2025 Date of pronouncement : 12.09.2025 ORDER The Assessee has filed this Appeal against the Order of the National Faceless Appeal Centre (NFAC), Delhi dated 24.05.2024 relating to assessment year 2012-13 on as many as 6 grounds, however, he has argued only the following legal ground:- “On facts and in the circumstances of the case, the authorities below have erred in upholding the reassessment proceedings ignoring the fact that impugned assessment is invalid and without jurisdiction as the reassessment proceedings has been initiated without application of mind and therefore, not in compliance of the mandate of sections 147/148/151/149 of the Income Tax Act therefore such assessment is void ab initio and liable to be quashed.”
Brief facts of the case are that the assessee has not filed the return of income for the assessment year 2012-13. As per the information available with the department, the assessee had made total cash deposit of Rs. 17,40,500/- during the FY 2011-12 in his bank account maintained with Punjab and National Bank. In view of this, the AO had a reason to believe that the income otherwise chargeable to tax has escaped assessment. Accordingly, with the prior sanction of the competent authority u/s. 151 of the Act, a notice u/s. 148 dated 29.3.2019 was issued and served on the assessee. Thereafter, notices u/s. 142(1) alongwith questionnaire and show cause notice dated 26.10.2019 issued to the appellant. In response, the appellant filed his return of income on 29.10.2019 and submitted requisite details. The appellant submitted the reason of cash deposit as the sale proceeds of agricultural land. However, the contention of the appellant was not accepted by the AO, as the appellant had not submitted any proper evidence of the receipt of cash. Therefore, the AO added the amount of Rs. 17,40,500/- to the total income of the assessee. Further, AO noted that the appellant earned saving bank account interest of Rs. 44,782/- which was not disclosed and no evidence of deduction u/s. VIA claimed was also submitted by the appellant. Hence, the AO added an amount of Rs. 44,782/- to his total income and disallowed the deduction claimed u/s VIA.
Against the aforesaid action of the AO, assessee preferred the appeal before the Ld. CIT(A).
Aggrieved with the aforesaid action of the Ld. CIT(A)/NFAC, Delhi, Assessee is in appeal before me.
At the time of hearing, Ld. AR has reiterated the aforesaid ground and also the submissions made before the authorities below, more particularly that invocation of reassessment proceedings based on non-existing provision of law. He relied upon the recent Coordinate Bench decision dated 04.08.2025 in the case of Sumit Suneja vs. ACIT decided in (AY 2011- 12) wherein, on identical facts and circumstances, the assessment was quashed by the Tribunal. 2 5.1 Per contra, Ld. DR relied upon the order of the Ld. CIT(A)/NFAC and submitted that the same does not require any interference, hence, the same may be confirmed.
I have heard rival contentions and perused the relevant records. 6.1 It is noted from records viz. Page No.10 of the paper book which is a copy Form for recording the reasons for initiating proceedings u/s. 148 and for obtaining approval of the Pr. CIT for reopening of assessment, in column 7 of the said Form the AO has stated that the provisions applicable for reopening of assessment is section 147(a) of the Act. I find force in the contention of the Ld. AR that AO has quoted the non-existent provisions for reopening the assessment which shows that there is complete non application of mind. It is not disputed that the provisions of section 147(a) /147(b) have ceased to be in the statute book from 01.04.1989 and mentioning of these incorrect and non- existing sections is clearly a case of non-application of mind by the AO and also by authorities providing sanction u/s. 151 of the Act. 6.2 My aforesaid observations are supported by the decision of the Tribunal dated 18.12.2024 in the case of Amit Khatri vs. ITO decided in (AY 2012-13) which was also followed by the Tribunal in the recent decision dated 04.08.2025 in the case of Sumit Suneja vs. ACIT decided in (AY 2011-12). In the case law referred above of Amit Khatri vs. ITO, exactly on identical fact it has been held that the reassessment order is bad in law by observing as under :- “8. Heard rival submissions, perused the orders of the authorities below. Undisputedly in this case there is non- application of mind by the AO in taking approval from the appropriate authority u/s. 151 of the Act. Perusal of Form for recording the reasons for initiating proceedings u/s. 148 for obtaining approval of the Pr. CIT, Delhi -8, New Delhi which is placed at Paper Book page no. 38 suggests that the AO mentioned the provisions under which the assessment was reopened as 147(b) of the Act. It is observed that the provisions of section 147(a)/147(b) have seized to be in the statute book from 1.4.1989. Therefore, mentioning all these incorrect and non-existent sections for obtaining approval for recording the reasons for initiating proceedings u/s. 148 is a clear case of non-application of mind by the AO and also by the authorities providing satisfaction u/s. 151 of the Act.” We find that Full Bench of the Hon’ble Jurisdictional High Court in the case of C.I.T. vs. Kelvinator India Ltd. 256 ITR 1, has held that mere change of opinion would not confer jurisdiction upon the Assessing Officer to reopen proceedings without anything further. It was held that if the Assessing Officer is allowed to do so, the same would amount to giving a premium to an authority exercising quasi judicial function to take benefit of its wrong. Hence, it is clear that section 147 of the Act does not postulate conferment of power upon the Assessing Officer to initiate reassessment proceedings upon a mere change of opinion. The above said decision was duly affirmed by the Hon’ble Apex Court in the case of C.I.T. vs. Kelvinator of India Ltd.. In this case the Hon’ble Apex Court has held that after 1st April, 1989 Assessing Officer has power to reopen the assessment u/s. 147 provided that Assessing Officer has reason to believe that income has escaped assessment and there is tangible material to come to the conclusion that there is escapement of income; mere change of opinion may not per se to be a reason for reopening. 9…………………….
Facts being identical. Respectfully following the said decision the reassessment order dated 09.12.2019 passed u/s. 147/143(3) of the Act for the AY 2012-13 is quashed and the additional ground nos. 1 to 3 are allowed.” 6.2 In the background of the aforesaid discussions and respectfully following the precedents, as aforesaid, in my considered opinion, the reassessment order dated 28.12.2019 passed u/s. 147/143(3) of the Act for the AY 2012-13 deserve to be quashed and accordingly, hence, the same is hereby quashed. Accordingly, the legal issue raised by the assessee stands allowed. Since I have already quashed the assessment, the other grounds have become academic in nature and need not be adjudicated.
In the result, the Assessee’s appeal is allowed in the aforesaid manner.