GIAN GUPTA,NEW DELHI vs. ACIT, CIRCLE- 33(1), NEW DELHI, NEW DELHI
ITA No.1307/Del/2024
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH “B”NEW DELHI
BEFORE SHRIMAHAVIR SINGH, HON’BLE VICE PRESIDENT
AND SHRISANJAY AWASTHI, ACCOUNTANT MEMBER
आ.अ.सं/.I.T.A No.1307/Del/2024
िनधा रणवष /Assessment Year: 2011-12
GIAN GUPTA,
KH. No. 389/2/2-415,
Ford Service Centre, NH-8, Rangpuri,
New Delhi.
PAN No.AAAPG7797G
बनाम
Vs.
ACIT,
Circle 33(1), Civic Centre,
Minto Road, New Delhi.
अपीलाथ Appellant
यथ/Respondent
Assessee by Shri Salil Kapoor, Advocate and Shri Shivam Yadav, Advocate
Revenue by Shri Sabyasachi Roy, Sr. DR
सुनवाईकतारीख/ Date of hearing:
17.12.2025
उोषणाकतारीख/Pronouncement on 17.12.2025
आदेश /O R D E R
PER SANJAY AWASTHI, ACCOUNTANT MEMBER:
1. This appeal arises from order dated 27.01.2024, passed u/s 250 of the Income Tax Act, 1961 (hereafter as “the Act”), by Ld. CIT(A)-NFAC,
Delhi. In this case original assessment was done u/s 143(3) of the Act on 28.03.2014. Thereafter, ostensibly on account of some allegedly incriminating information received from the Investigation Wing, the Ld.
AO issued a notice u/s 148 of the Act dated 28.03.2018. Since the wording of the reasons recorded has considerable bearing on the present adjudication, a critical portion from such reasons may be extracted:
2
“3. Shri Gian Gupta (PAN-AAAPG7797G) had also taken the artificial profit/loss during the FY 2010-11 relevant to AY 2011-12
through sub broker M/s Kartika Investments as under:
S.No.
Total Buy
Total Sell
Profit/Loss
1. 38589500/-
39710000/-
1120500/- (Loss)
2. 5179240/-
NA
Only buy
3. 61252250/-
62745000/-
1492750/- (profit)
4. 13227500/-
11137125/-
2090375/- (loss)
5. 32735000/-
33680500/-
945500/- (profit)
ITR for the A.Y. 2011-12 was filed by Sh. Gian Gupta before the department on 30.09.2011. ITR was downloaded from the ITD module and gone through. An assessment order u/s 143(3) on 28-3-
2014 has been passed by DCIT, Central Circle-5, New Delhi. On perusal of the assessment record, it was found that the assesses vide reply dated 11.03.2014 has shown that the investment was made through Kartika Investment but tire source of fund utilized for this investment was not explained during the course of assessment proceedings u/s 143(3). In light of the above, I have reason to believe that the assessee has escaped assessment on account of above bogus transactions with M/s
Kartika
Investment……..”
1.1
The Ld.
AO completed the reassessment by adding
Rs.4,51,23,784/- u/s 68 of the Act, by treating this assessment of speculative profit as unexplained cash credit. Another amount of Rs.13,53,713/- had been added as estimated commission paid to alleged entry operator.
1.2
The aggrieved assessee approached the Ld. CIT(A) but could not succeed on the grounds of appeal raised of alleged illegal assumption of juri iction as well as on merits. It is pertinent to mention that while the juri ictional grounds have been summarily dismissed, the grounds pertaining to merit have been dismissed exclusively on the basis of Ld.
AO’s findings.
3
3 Further aggrieved, the assessee has approached the ITAT with as many as 18 grounds of appeal, but the Ld. AR has requested that the following grounds, challenging the assumption of juri iction, may be taken up first and only if needed then the other grounds may be considered: “1. That, in view of the facts and circumstances of the case and in law, the notice issued under section 148 of the Income Tax Act, 1961 (‘the Act’) on 28.03.2018 and the Assessment Order passed under section 147 r.w.s. 143(3) of the Act on 30.12.2018 are illegal, bad in law, without juri iction and barred by time limitation. 2. That in view of the facts and circumstances and in law, the additions made by the Assessing officer (‘AO’) vide order dated 30.12.2018 as upheld by the NFAC/ CIT(A) vide its order dated 27.01.2024 are illegal, bad in law and liable to be deleted. 3. That, in view of the facts and circumstances of the case and in law, the AO and NFAC/CIT(A) have erred in not considering the facts that during the original assessment, the Assessee has disclosed fully and truly all the material facts necessary for the assessment. Hence, the impugned proceedings are liable to be quashed. 4. That, in view of the facts and circumstances of the case, the addition made is illegal, bad in law and also change of opinion particularly when the same is already examined and accepted under Section 143(3) of the Act. 5. That, in view of the facts and circumstances of the case, and in law the proceeding initiated under section 148 of the Act are illegal, bad in law without juri iction and barred by time limitation as there is no failure on part of Assessee to disclose fully the material facts and the earlier assessment was completed under section 143(3) of the Act. 6. That the notice under section 148 of the Act is issued only on the basis of the investigation wing report without any independent application of mind by the Assessing officer. There is no independent application of mind. Hence, the proceeding is illegal, bad in law, without juri iction and liable to be quashed. 7. That, in view of the facts and circumstances of the case and in law the alleged approval granted by the higher authority for 4
issuance of notice under section 148 of the Act is also without application, of mind and as alleged approval is illegal, bad in law and without juri iction.”
2. Before us, the Ld. AR argued, with the help of a paper book, that firstly, the reassessment proceedings were barred by limitation since as per the proviso to section 147 of the Act, wherein it is specifically mentioned that no action will be taken u/s 147 of the Act after the expiry of four years from the end of the relevant assessment year unless any income chargeable to tax has escaped assessment by reason of any failure on the assessee’s part to disclose fully and truly all material facts necessary for assessment of income for the said year. The Ld. AR pointed out that during the course of original assessment proceedings
(order dated 28.03.2014, placed at pages 139-141 of the paper book), the assessee has duly submitted the details of assessee’s shares account and most importantly, a copy of account of Kartika Investment. It was pointed out that the then AO did not take an adverse view in the matter, leading to the conclusion that the present AO was working on the basis of mere change of opinion on the same set of facts. Secondly, the reasons for reopening (supra) indicated a specific set of transactions, which were nowhere in evidence in the reassessment order, which contained an entirely different set of workings. Furthermore, it was also pointed out that actually the only amount specifically transacted with M/s Kartika
Investments was Rs.1,00,000/- credited in that account through a cheque from the assessee. It was the submission that the remaining transactions
5
were settled on the basis of profit and loss accruing through speculative trading done by the assessee, which was duly disclosed in the return of income (placed at pages 100-102 of the paper book). It was the submission that if the figures given in the reasons recorded (supra) were to be summarized then a loss of Rs.7,72,625/- would result. Such a small loss would need to be seen in the backdrop of substantial business income of Rs.3,69,07,161/-.
The Ld. AR summarized his arguments and stated that:
i.
The assessee had fully and truly disclosed the facts during the first round and hence the reassessment proceedings were hit by the first proviso to section 147 of the Act, as the notice u/s 148 of the Act was issued well beyond the four years period mandated therein; ii.
The impugned proceedings represented a change of opinion, which was specifically disapproved in the case of Kelvinator of India Ltd., reported in 320 ITR 561 (SC); and iii.
The Ld. AO had travelled far beyond the scope of reasons recorded prior to issue of notice u/s 148 of the Act and in so doing he had violated the principles laid down in the case of Jet Airways reported in 331 ITR 236 (Bom.), Oriental Bank of commerce reported in 272 CTR 56 (Del), and the case of Ranbaxy Laboratories reported in 336 ITR 136 (Del).
6
1 Per contra, the Ld. DR relied on the orders of the authorities below. 3. We have carefully considered the rival submissions and have gone through the records before us. Right at the outset, it deserves to be mentioned that in this case the Ld. AO’s action are legally faulty on all the grounds alleged by the Ld. AR. Thus, we find that this case is one where the first proviso to section 147 of the Act would come into play, thereby time-barring the impugned proceedings. Secondly, the original AO is seen to have enquired about the impugned transactions, which have again surfaced as an allegation in the reassessment proceedings. Thus, generally, change of opinion can be inferred. Lastly, the Ld. AO has travelled beyond the allegations in the reasons recorded (supra) to arrive at entirely different conclusions. The cases of Jet Airways (supra), Ranbaxy Laboratories (supra), etc. would come to the assessee’s rescue. Thus, the assessee deserves to succeed with respect to grounds of appeal numbers 1 to 7. 3.1 Since the assessee has succeeded with respect to the juri ictional grounds, we do not adjudicate on merit as such an exercise would be of academic nature at best. 4. In the result, this appeal is allowed. Order pronounced in the open court on 17.12.2025 7 (MAHAVIR SINGH) ACCOUNTANT MEMBER Dated: 29.12.2025 *Kavita Arora, Sr. P.S.