AJAY KUMAR BAJAJ, RAIPUR,RAIPUR vs. INCOME TAX OFFICER-4(1), RAIPUR, RAIPUR

In this regard, the Ld. Counsel for the assessee demonstrates that vide letter dated 03.03.2022 for A.Y.2017-18, the department had provided the copy of reasons for reopening wherein in the attachments firstly, in the approval u/s. 151 of the Income Tax Act, 1961 ( for short ‘the Act’), dated 31.03.2021, the remarks of the approving authority states that “after perusal of the information/materials received by the A.O ………..” and further, in the annexure at Para 3. “Analysis of information”: “on perusal of information, it is gathered that the assessee………….” It is contended by the Ld. Counsel for the assessee that what are those information which were in possession of the department, based on which, the reopening was done was never shared with the assessee. There was no communication whatsoever given to the assessee to understand what are those information in possession of the Revenue, based on which, reopening of assessment has been done in the case of the assessee. In other words, the assessee contends that certain information were used by the Department to proceed against the assessee even without sharing the same for response to the assessee regarding those information which therefore, is against the principles of natural justice.

In this regard, the Department was provided an opportunity to furnish report from the A.O regarding the same as to whether the relevant information for reopening was communicated to the assessee or not. The Ld. Sr. DR had placed on record report dated 29.12.2025. In the said report, it is only retraction and verbatim extraction of assessment order but regarding the issue for which, such report was called for i.e. communication of information, based on which, the reassessment was done in the case of the assessee, the entire report is silent about the same. In fact, there is no whisper at all regarding any communication made by the Revenue with the assessee pertained to the reasons for reopening. Therefore, it is clear that information/material, based on which, reopening was done was never shared with the assessee nor any opportunity was provided to the assessee to respond on those issues.

In the present case, admittedly the ITS details which formed the basis for recording reasons for initiation of reassessment proceedings u/s.147 of the Act has not been provided to the assessee. It is settled legal position that where the materials referred to in the “reasons to believe” by the A.O was not supplied to the assessee for his response, the entire proceedings for reopening of the assessment gets vitiated as there is no reasonable opportunity provided to the assessee therefore effecting the base of principles of natural justice in income tax proceedings. In this regard, I refer to the judgment of the Hon’ble High Court of Rajasthan, Jodhpur Bench in the case of Micro Marbles Private Limited Vs. Office of the Income Tax Officer (2023) 475 ITR 569 (Raj.) wherein on the similar issue the Hon’ble High Court has held and observed as follows: “31. Thus, in the light of the decisions of the Delhi and the Bombay High Courts, as referred to above, the non-supply of the material, especially the documents of entry in the books of M/s Sanmatri Gems Pvt. Ltd. and the statement of Deepak Jain recorded under Section 132 (4) of the Act, is sufficient to vitiate the proceedings.

It may be noted that the statement recorded under Section 132 (4) of the Act can be used in evidence for making the assessment only if such statement is made in context with other evidence, or material discovered during search. A statement of a person, which is not relatable to any incriminating document or material found during search and seizure operation cannot, by itself, trigger the assessment.

In view of the aforesaid facts and circumstances, we are of the opinion that shorn of all other technical aspects which may have been raised before us, the very fact that the material referred to in the "reasons to believe" was not supplied to the petitioner, the entire proceedings for the reopening of the assessment and leading to the consequential assessment stand vitiated in law.”

Considering the facts and circumstances involved in the present case and on examination of the afore-stated judicial pronouncements to the facts of the assessee’s case, I hold that the reopening of assessment by the A.O u/s. 147/148 of the Act without providing materials/documents forming “reasons to believe” for such reopening, is bad in law, arbitrary and void ab initio, hence quashed.

Since the reassessment is quashed thereafter all other proceedings becomes non-est in the eyes of law. As the legal issue has been answered in favour of the assessee therefore the grounds on merits becomes academic only.

As per the aforesaid terms the grounds of appeal

Respectfully following the aforesaid judicial pronouncements, on the same parity of reasoning even without going into the merit of the matter, on this legal premise itself, Ground of appeal No.2 of the appeal stands allowed.

In the result, appeal of the assessee is partly allowed. Order pronounced in open court on 6th day of January, 2026.