VERTEX BUILDWELL PRIVATE LIMITED,DELHI vs. INCOME TAX OFFICER, WARD - 26(2), C R BUILDING, NEW DELHI

This appeal by the assessee is directed against the order of the ld.

CIT(A), Delhi dated 31.01.2025 pertaining to A.Y 2012-13.

taken by the assessee is as follows:

1. That on the facts and circumstances of the case, the order passed by the learned Commissioner of Income Tax (Appeals) (hereinafter referred as "CIT(A)" is bad both in the eyes of law and on facts. Page 1 of 9

2. That on the facts and in the circumstances of the case, assessment order passed u/s 147 of the Act is liable to be quashed being reopening of proceedings u/s 147 is barred by limitation i.e. after expiry of four years from end of the relevant assessment year, as case of appellant was already assessed u/s 143(3) and there is no failure on the part of appellant to disclose fully and truly all material facts necessary for its assessment.

3. That on the facts and in the circumstances of the case, assessment order passed u/s 147 of the Act is liable to be quashed being proceedings u/s 147 initiated merely on the basis of change of opinion on the same subject matter which have already been assessed u/s 143(3) which is in violation of law settled by the Hon'ble Supreme court in the case of Commissioner of Income Tax v Kelvinator India Limited (2010) 320 ITR 561 (SC).

5. That on the facts and in the circumstances of the case, the assessment proceedings u/s 147 of the Act were completed by the AO by not following the procedure laid down by the Hon'ble Supreme Court in the case of GKN Driveshafts (India) Ltd. v Income Tax Officer (2003) 259 ITR 19 which should be strictly adhered in proceedings u/s 147 of the Act.

6. That on the facts & in law in confirming addition of Rs. 1,70,00,000/- without providing the copy of relied upon un-substantiated information received from DDIT(Inv), Unit-3, Gurugram and un- substantiated and irrelevant statement of third person recorded by some other authority during search action in the case of examine the said third party for making addition and opportunity to cross person which is violation of principle of natural justice.

7. That on the facts and circumstances of the case, the learned CIT(A) has erred both on facts & in law in confirming addition of Rs. 1,70,00,000/- on account of share application money by treating the same as accommodation entry without appreciating the fact that the appellant has duly discharged its primary onus by furnishing abundant documentary evidences to prove identity & creditworthiness of investor companies and genuineness of transaction in which no defect

Page 2 of 9 has been brought on record by both the authorities i.e. AO & Ld. CIT(A).

8. That on the facts and circumstances of the case, the learned CIT(A) has erred both on facts & in law in confirming addition of Rs. 1,70,00,000/- on account of share application money by treating the same as accommodation entry based on non-service of Summons u/s 131 on the directors of the alleged investor companies without apprising the regular assessment records wherein notices u/s 133(6) were duly served and complied by said companies.

9. That on the facts and circumstances of the case, the learned CIT(A) has erred both on facts & in law in confirming arbitrary addition of Rs. 1,70,00,000/- on account of share application money as bogus/accommodation entry based on non-service of Summons u/s 131 on the directors of the alleged investor companies after long period of approx. 6 years that too without bringing any tangible or substantive material on record in support of allegation made by both the lower authorities.

11.The appellant craves leave to add, amend or alter any of the grounds of appeal.

3. At the very outset, the ld AR of the assessee vehemently submitted that the instant appeal pertains to A.Y 2012-13 and the Assessing Officer has issued notice u/s 148 of the Income-tax Act, 1961 [the Act, for short] dated 29.03.2019 which is barred by limitation and hence is liable to be quashed. The ld AR stated that assessment order passed u/s 147 of the Act is liable to be quashed as the reopening of proceedings u/s 147 is after expiry of four years from end of the relevant assessment year, as case of appellant was already assessed u/s 143(3) and there is no failure on the part of appellant to disclose fully and truly all material facts necessary for its assessment. Page 3 of 9

4. Per contra the ld DR relied on the orders of the AO and the CIT(A).

for such assessment year by reason of the failure on the part of the assessee to make a return under section 139 or in Page 5 of 9 response to a notice issued under section 142(1) or section 148 or  to disclose fully and truly all material facts necessary for his assessment for that assessment year.

10. In view of the abovesaid provisions, an initiation made, in a case covered by the proviso to section 147, after the expiry of four years from the end of the relevant previous year can be sustained only if the conditions laid down in the said proviso is fulfilled. Otherwise, such initiation would be barred by limitation as per the proviso to section 147 as held in Orient Beverages Ltd. v. ITO, (1994) 208 ITR 509, 514 (Cal)] even though such initiation may not be time-barred keeping in view only the provisions of section 149(1). In other words, the provisions of section 149(1)(b) enacting provisions as to extended period of limitation can be invoked only in cases falling outside the ambit of the proviso to section 147 as held in Nestle India Ltd. v. Deputy CIT, (2016) 384 ITR 334 (Del).

Page 6 of 9 the taxpayer's specific failure to disclose. In the case of Discovery Communications India Vs Addl. Commissioner Of Income Tax, Special in W.P.(C) 13225/2018 dated 08.11.2024, the hon’ble Delhi High Court held as under:

“26. The existence of failure on the part of the assessee to disclose fully and truly should not only be integral to the reasons but it must also be spelt out in the reasons as to what was to be disclosed but had not been disclosed. The absence of such averments in the reasons renders the whole exercise nugatory. Such lapse on the part of the AO cannot be regarded as a mere procedural irregularity but is a defect which goes to the root of the matter. The purported reasons that prompted the AO to reassess and disallow the expenditure incurred on DAP and production and translation expenses only demonstrate a change of opinion on the part of the AO, which cannot form the basis of reopening the assessment. *** 28. Consequently, one of the essential ingredients for reopening the assessment beyond the period of four years has not been satisfied in the present case. Reassessment proceedings are therefore bad in law”.

Order pronounced in open court on 30.10.2025.