KULDIP SINGH,RANCHI vs. DCIT/ACIT, CIRCLE-1, RANCHI

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ITA 180/RAN/2025Status: DisposedITAT Ranchi10 February 2026Bench: Shri Sonjoy Sarma (Judicial Member), Shri Ratnesh Nandan Sahay (Accountant Member)1 pages

AI SummaryAllowed

Facts

The assessee, engaged in land and contract work, filed their income tax return for AY 2014-15. The original assessment under section 143(3) accepted the returned income. The Assessing Officer later issued a notice under section 148 for reassessment, alleging an escapement of income due to a discrepancy in land valuation.

Held

The Tribunal held that the notice for reassessment under section 148 was issued beyond the four-year period stipulated in the first proviso to section 147, making it barred by limitation. The Tribunal also noted that the reassessment was based on the same material that was part of the original assessment, constituting a mere change of opinion, which is impermissible.

Income Tax Appellate Tribunal, BENCH-RANCHI

Before: Shri Sonjoy Sarma & Shri Ratnesh Nandan Sahay

order

: February 10, 2026 ORDER

Per Sonjoy Sarma, Judicial Member:

This appeal filed by the assessee is directed against the order of the NFAC, Delhi (hereinafter referred to as “CIT(A)”) dated 06.03.2025 passed under Section 250 of the Income-tax Act, 1961 (hereinafter referred to as the “Act”).

Brief facts of the case are that the assessee is engaged in the business of land and contract work. The assessee filed the return of income for the assessment year 2014–15 on 30.11.2014, declaring a total income of ₹40,80,800. The case was selected for scrutiny, and the assessment was completed under section 143(3) of the Income-tax Act, 1961, vide order dated 15.12.2016, accepting the returned income. Subsequently, the Assessing Officer issued a notice under section 148 of the Act dated 22.11.2019, i.e., after the expiry of four years from the end of the relevant assessment year. Pursuant thereto, assessment was framed under section 147 read with sections 144 and 144B, making an addition of ₹77,72,000 under section 56(2)(vii)(b) of the Act. The addition was made on the allegation that the assessee purchased land measuring 0.67 acre for a consideration of ₹42,30,000, whereas the stamp duty valuation was ₹1,20,02,000, and the difference of ₹77,72,000 was treated as income.

Before the learned CIT(A), the assessee raised specific legal grounds, challenging the validity of reopening under section 147, as well as grounds on merits. However, the learned CIT(A) did not adjudicate either the legal issue or the merits, and merely set aside the matter to the Assessing Officer with a direction to re-examine the issue.

Aggrieved, the assessee is in appeal before the Tribunal. The learned Authorised Representative (AR) submitted that in present case of the assessee the original assessment was completed under section 143(3) after full verification. The notice under section 148 dated 22.11.2019 was issued beyond four years from the end of AY 2014–15 and the reasons recorded while issuing notice u/s 143(2) r.w.s 147 dated 21.09.2020 do not allege any failure on the part of the assessee to disclose fully and truly all material facts at the time of original assessment. Therefore, the reopening is barred by the first proviso to section 147 of the Act and is void ab initio. Moreover, the reopening is also based on a mere change of opinion, which is impermissible in law. The Ld. AR reliance was placed on the following judicial precedents:

i. CIT Vs Foramer France (SC) 264 ITR 566 – Hon’ble Apex Court affirming the decision of Hon’ble Allahabad High Court in 119 taxman 61 observed that:- Whether since admittedly there was no failure on part of petitioner to make return or to disclose fully and truly all material facts necessary for assessment, proviso to new section, which bars issue of notice under section 148 after expiry of four years from end of relevant assessment year, squarely applied to facts of instant case and, therefore, impugned notice was barred by limitation - Held, yes - ii. Gateway Leasing (P.) Ltd. vs. Assistant Commissioner of Income-tax- 1(1)(2) [2020] 117 taxmann.com 442 (Bombay)/[2020] 272 Taxman 255 (Bombay)/[2020] 426 ITR 228 (Bombay)[11-03-2020] – Assessment year 2012-13 - For relevant year, assessee filed its return declaring certain taxable income - Assessment was completed under section 143(3) wherein certain additions were made to assessee's income - Subsequently, assessment was reopened in case of assessee - Reason recorded by Assessing Officer was that in case of search conducted in case of one 'N', it was found that there was a syndicate operating in stock market which created long term capital gain/loss for its beneficiaries - According to Assessing Officer, assessee was also a beneficiary of said syndicate as it earned bogus long term capital gain in case of sale of shares of 'S' Ltd. details of which were not reflected in records and, thus, said income escaped assessment- Assessee filed instant petition challenging validity of reassessment proceedings - It was noted that assessee had filed complete details of its share transactions in case of 'S' Ltd. at time of completion of assessment under section 143(3) - Whether since there was no failure on part of assessee to disclose all material facts at time of assessment, initiation of reassessment proceedings based on mere change of opinion was not justified - Held, yes [Paras 36 and 37] [In favour of assessee] iii. Madras High Court in the case of CIT Vs Tamil Nadu Transport Development Finance Corpn. Ltd. 306 ITR 136 wherein it was held that:- In the original assessment proceedings, the Assessing Officer had considered all the details filed by the assessee and only thereafter had completed the assessment under section 143. Based on those details and other documents filed along with the return, the assessment was completed. There was no failure on the part of the assessee to disclose fully and truly all material facts. The finding by the authorities below was that the revenue had failed to prove that there was a failure on the part of the assessee to disclose any material facts necessary for assessment. Hence, they had rightly come to the conclusion that when the assessment was made under section 143(3), no action could be taken under section 147 after the expiry of four years from the end of relevant assessment year unless there was a failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment. In the instant case, the relevant assessment year was 1997-98 and the Assessing Officer had issued notice for reopening under section 148 on 24-6-2003, which was beyond four years after the end of the relevant assessment year. Hence, it was clearly barred by limitation under proviso to section 147. Therefore, the Tribunal was correct in its conclusion that reopening was bad in law. The concurrent finding given by both the authorities below was based on valid materials and evidences. Under those circumstances, there was no error or legal infirmity in the order of the Tribunal so as to warrant interference. iv. Google India (P.) Ltd. vs. Assistant Commissioner of Income-tax [2025] 172 taxmann.com 378 (Karnataka)[24-02-2025] – Where Assessing Officer issued reopening notice after period of 4 years on ground that while computing section 10A deduction, assessee allocated certain amount solely on one unit, thereby reducing taxable income and boosting profit of other units, since reasons did not indicate failure of assessee to disclose any information or that he had not disclosed true and full material facts, it was a case of mere change of opinion and, thus, such reopening was not permissible

On the other hand, the learned DR supported the order of the lower authorities.

We have heard the rival submissions and perused the material available on record. It is undisputed that the original assessment was completed under section 143(3) on 15.12.2016 and the notice under section 148 was issued on 22.11.2019, i.e., beyond four years from the end of the relevant assessment year. We have gone through the notice u/s 143(2) r.w.s. 147 of the Act dated 21.09.2020 wherein it is found that in present case of the assessee, the reasons recorded for reopening do not state any failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment and the said notice dated 21.09.2020 is reproduced as under:

6.1 We also find that the first proviso to section 147 of the Act clearly mandates that where an assessment has been completed under section 143(3) of the Act , no action can be taken after four years unless there is failure on the part of the assessee to disclose fully and truly all material facts. Even, the Hon’ble Supreme Court in CIT v. Foramer France (264 ITR 566) has categorically held that in the absence of such failure, reopening beyond four years is barred by limitation. Further, the issue relating to purchase of land and its valuation was already part of the original assessment record, and reopening on the same material constitutes a mere change of opinion, which is impermissible in law. We also note that the learned CIT(A) has failed to adjudicate the legal ground, which goes to the root of the jurisdiction, and has mechanically set aside the matter, which is not permissible. In view of the above facts and settled legal position the reopening of assessment under section 147 of the Act is bad in law. Since the notice issued under section 148 of the Act dated 22.11.2019 is barred by limitation. Consequently, the assessment framed pursuant thereto is void ab initio. Accordingly, we quash the reassessment proceedings and allow the appeal of the assessee.

In the result, the appeal of the assessee is allowed. Kolkata, the 10th February, 2026.