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Facts
The assessee appealed against the NFAC's order related to assessment year 2013-14, concerning proceedings under Section 147. The core issue was the validity of the reopening itself, as the Assessing Authority cited escapement of income due to under-reported profits but made additions based on alleged bogus purchases.
Held
The Tribunal held that the reopening was invalid because the reason stated for reopening (escapement of income due to under-reported profits) was not the basis for the additions made in the assessment order (bogus purchases).
Key Issues
Whether the reassessment proceedings initiated under Section 147/148 were valid when the reason recorded for reopening was not the basis for the additions made in the assessment order.
Sections Cited
147, 148
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Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’, NEW DELHI
Before: Sh. Satbeer Singh Godara
Asstt. Year : 2013-14 Arvind Jain, Vs Income Tax Officer, 487, 11nd Floor, Haveli Haider Kuli, Ward-5(1)(1), Chandni Chowk, Delhi-110006 Gautam Budh Nagar, Noida-201301 (APPELLANT) (RESPONDENT) PAN No. ACAPJ9132E Assessee by: Sh. S. S. Nagar, CA Revenue by : Sh. Manoj Kumar, Sr. DR Date of Hearing: 24.09.2025 Date of Pronouncement: 24.09.2025 ORDER This assessee’s appeal for Assessment Year 2013-14, arises against the CIT(A)/NFAC, Delhi’s DIN & order No. ITBA/NFAC/S/250/2025-26/1077776400(1) dated 25.06.2025, in proceedings u/s 147 of the Income Tax Act, 1961 (in short “the Act”).
Heard both the parties at length. Case file perused.
It transpires during the course of hearing that there arises first and foremost legal issue of validity of the impugned reopening itself as the learned assessing authority had set into motion section 148/147 proceedings against the assessee recording the sole reason of escapement of income amounting to Rs.3,00,00,000/- representing under reported profits whereas his assessment framed on 26.05.2023 ended up in Arvind Jain disallowing/adding his alleged bogus purchases totaling to Rs.17,41,375/- in question. It is thus clear that the learned assessing authority has nowhere made any addition qua the above sole reason of reopening.
That being the clinching case, I hereby quote ATS Infrastructure Ltd. vs. ACIT (2024) 166 taxmann.com 61 (Delhi), Ranbaxy Laboratories Ltd. vs. Union of India (2011) 336 ITR 136 (Del.) and CIT vs. Jet Airways (India) Ltd. (2011) 331 ITR 236 (Bom.) to quash the impugned reopening for the above precise reason in very terms.
All other pleadings on merits stand rendered academic.