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Facts
The assessee's assessments for AY 2020-21, 2021-22, and 2023-24 were reopened under Sections 147/148 of the Income Tax Act, 1961, based on the reason of undeclared sale proceeds. However, the assessments framed under Section 143(3) resulted in additions only for commission income, with no additions made on account of the initial reason for reopening (sale consideration).
Held
Citing precedents, the Tribunal held that the reopening proceedings were invalid. It was concluded that if the Assessing Officer makes no addition based on the sole reason for which proceedings under Sections 147/148 were initiated, then the reopening itself is unsustainable.
Key Issues
Whether the reopening of assessment under Sections 147/148 is valid if the final assessment makes additions on grounds unrelated to the initial reason recorded for reopening.
Sections Cited
147, 148, 143(3)
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Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’, NEW DELHI
Before: Sh. Satbeer Singh Godara
Asstt. Year: 2023-24 Mukesh Gupta, Vs ACIT, D-89, 3rd Floor, Kamla Nagar, Central Circle-3, Jawahar Nagar, North Delhi, New Delhi-110055 New delhi-110007 (APPELLANT) (RESPONDENT) PAN No. AKOPG1709J Assessee by: Sh. Govind Kumar, CA Revenue by : Sh. Amit Shukla, Sr. DR Date of Hearing: 23.12.2025 Date of Pronouncement: 23.12.2025 ORDER These assessee’s three appeals 7426 & 7427/Del/2025, for Assessment Years 2020-21, 2021-22 and 2023-24, arise against the CIT(A)-23, Delhi’s DIN & order Nos. ITBA/APL/S/250/2025-26/1081204873(1), 1081205368(1) and 1081205086(1) all dated 26.09.2025, in proceedings u/s 147/143(3) of the Income Tax Act, 1961 (in short “the Act”), respectively.
Heard both the parties at length. Case files perused.
It transpires during the course of hearing that there arises the first and foremost legal issue of validity of the impugned reopening itself as the learned assessing authority had set into motion section 148/147 proceedings against the assessee regarding 7426 & 7427/Del/2025 Mukesh Gupta the sole reason of entire sale proceeds of Rs.60,45,55,624/- (A.Y. 2020-21), Rs. 58,63,70,803/- (A.Y. 2021-22) and Rs.56,34,33,934/- (A.Y. 2023-24) whereas his assessment framed on 22.03.2025 ended up adding commission income of Rs.27,18,250/- (A.Y. 2020-21), Rs. 26,38,669/- (A.Y. 2021-22) and Rs.25,35,453/- (A.Y. 2023-24); respectively. It is thus clear that the learned assessing authority has nowhere made any addition qua the above sole reason of reopening involving the assessee’s sale consideration.
That 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.