COLEN CHEMICAL PVT. LTD.,JAMSHEDPUR vs. ITO, WARD 1(1), JAMSHEDPUR, JAMSHEDPUR
Facts
The assessee filed appeals against separate orders from the CIT(A) for Assessment Years 2013-2014 and 2014-2015. The original assessments were completed under Section 143(3) of the Income Tax Act. Reopening notices under Section 148 were issued beyond the four-year period. The reasons for reopening were based on an inquiry report concerning accommodation entries and bogus unsecured loans.
Held
The Tribunal held that the reasons recorded for reopening did not demonstrate any failure on the part of the assessee to disclose truly and fully all material facts. Furthermore, the reopening was initiated beyond the four-year period without satisfying the conditions precedent. The reassessment was considered to be based on a change of opinion without allegations of suppression of material facts.
Key Issues
Whether the reopening of assessment beyond four years under Section 147 of the Income Tax Act, 1961, is valid when there is no specific allegation of failure on the part of the assessee to disclose material facts, and the reassessment appears to be based on a change of opinion.
Sections Cited
143(3), 148, 147, 150(1), 150(2), 139(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, RANCHI BENCH, RANCHI
Before: SHRI GEORGE MATHAN, JM & SHRI RATNESH NANDAN SAHAY, AM
Per Bench : These two appeals are filed by the assessee against the separate orders passed by the ld.CIT(A), National Faceless Appeal Centre (NFAC), Delhi, both dated 31.03.2025 for the assessment year 2013-2014. 2. It was submitted by the Ld.AR that for the assessment year 2013- 2014 the original assessment came to be completed u/s.143(3) of the Act on 29/01/2016 and for the assessment year 2014-2015 the original assessment came to be completed u/s.143(3) of the Act on 29.12.2016. Notice u/s.148 of the Act for A.Y.2013-2014 came to be issued on 28.03.2018 and for A.Y.2014-2015 the notice was issued on 24.06.2019. The Ld. AR drew our attention to reason recorded to reopening for the assessment year 2013-2014 at pages 47 to 51 of the paper book which reads as follows:- ITA No.165&167/Ran/25 ITA No.165&167/Ran/25
The Ld. AR drew our attention to reason recorded to reopening for the assessment year 2014-2015 at pages 5 to 9 of the paper book which reads as follows:- ITA No.165&167/Ran/25 ITA No.165&167/Ran/25
It was submission that as the reopening has been done beyond the period of 4 years and the assessment has also been original completed u/s.143(3) of the Act. The provision to section 147 of the Act requires that there should be failure on the part of the assessee to disclose truly and fully all material facts required for assessment. It was the submission that in the reason recorded there is the no whisper that there is failure on the part of the assessee to disclose to truly and fully all material required for assessment. It was submission that in view of the decision of the decision of the Hon’ble Supreme Court in the case of CEAT Ltd., reported in (2022) 449 ITR 171(SC) the reopening is liable to be quashed as also the consequential assessment order.
In reply, the Ld.CIT DR assisting the Ld.Sr.DR submitted that the Hon’ble Supreme Court in the case of Rajesh Jhaveri Stock Brockers Pvt. Ltd. (2008) 14 SCC 208 and the Hon’ble Calcutta High Court in the case of P.L.Goenka HUF, passed in ITAT/241/2024 IA No:GA/2/2024, dated 06.05.2025. It was submission that even if the reason recorded are borrowed satisfaction, still it should be held that the reason are valid. It was the submission that the reopening of the assessment is liable to be upheld.
We have considered the rival submissions. A perusal reasons recorded clearly shows that the reasons do not specify much less even whisper that there is failure on the part of the assessee to disclose truly and fully all material facts require for the assessment. In the present case, it is admitted fact that the scrutiny assessment u/s.143(3) for the assessment year 2013-2014 came to be completed u/s.143(3) of the Act on 29/01/2016 and for the assessment year 2014-2015 the assessment completed u/s.143(3) of the Act on 29.12.2016. Notice u/s.148 of the Act for A.Y.2013- 2014 came to be issued on 28.03.2018 and for A.Y.2014-2015 the notice was issued on 24.06.2019, which in both the cases, issued after 4 years from the end relevant assessment year. Thus, the provision to section 147 of the Act requires that there should be a failure on the part of the assessee to disclose truly and fully all material facts required for the assessment. The before the Bench. A perusal of the reasons recorded clearly shows that there is no recording of the failure on the part of the assessee to disclose truly and fully all material facts required for the assessment. The Hon’ble Supreme Court in the case of CEAT. Ltd reported in 449 ITR 171 in para 2 has held as follows:-
It is not in dispute that the assessment was sought to be reopened beyond four years. Therefore, all the conditions under section 148 of the Income-tax Act, 1961 for reopening the assessment beyond four years are required to be satisfied. Having gone through the reasons recorded for re- opening, we are of the opinion that the conditions precedent for reopening of the assessment beyond four years are not satisfied. The reassessment was on change of opinion. There are no allegations of suppression of material fact. Under the circumstances, no error has been committed by the High Court in setting aside the reopening notice under section 148 of the Income-tax Act. We are in complete agreement with the view taken by the High Court. The special leave petition stands dismissed.
In these circumstances, respectfully following the decision of the Hon’ble Supreme Court in the case of CEAT Ltd., referred to supra, the reasons recorded in both the appeals of the assessee are found to be unsubstantial and consequently the same stands quashed. As the reopening has been quashed, the consequential assessment for both the years under consideration also stands quashed.
In the result, both appeals of the assessee are allowed. Order dictated and pronounced in the open court on 07/01/2026. (RATNESH NANDAN SAHAY) (GEORGE MATHAN) लेख सदस्य / ACCOUNTANT MEMBER न्य नयक सदस्य / JUDICIAL MEMBER र ाँची Ranchi; दिनांक Dated 07/01/2026 Prakash Kumar Mishra, Sr.P.S. आदेश की प्रनिललपप अग्रेपर्ि/Copy of the Order forwarded to : अपीलार्थी / The Appellant- . 1. प्रत्यर्थी / The Respondent- 2. 3. आयकि आयुक्त(अपील) / The CIT(A), 4. आयकर आयुक्त / CIT 5. निभागीय प्रनतनिनर्, आयकि अपीलीय अनर्किण, र ाँची / DR, ITAT, Ranchi 6. गार्ड फाईल / Guard file. सत्यापपत प्रतत //// आदेश िुस र/ BY ORDER, (Senior Private Secretary) आयकर अपीलीय अधिकरण, र ाँची / ITAT, Ranchi
