ABILITY SERVICES PRIVATE LIMITED,SAKCHI V. ACIT, CIRCLE-1, JAMSHEDPUR, JAMSHEDPUR

ITA 20/RAN/2024

AI Insights

The case involves Ability Services Pvt. Ltd, which appealed against the reassessment order passed by the Assessing Officer under section 148 of the Income Tax Act. The reassessment was based on the addition of excess depreciation and payments made towards EPF/ESI beyond the due date but before the filing of the return for the assessment year 2014-15. The primary contention of the assessee was that the reassessment proceedings were initiated beyond the permissible period of four years from the end of the relevant assessment year without any failure on their part to disclose material facts, which is required to justify such a delay under section 147. The Tribunal agreed with the assessee, referencing a Supreme Court judgment that emphasized the need for a clear failure to disclose material facts for valid reassessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 707030 (ITAT-RANCHI)
• Duration Of Justice: 1 year(s) 5 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2014-2015
• Appeal Filed On: 03-02-2024
• Other Referred Cases: Ganga Saran & Sons (P) Ltd. vs. ITO (1981) 130 ITR 1
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside; Difference of opinion; Change of opinion; Reassessment proceedings; Depreciation; Reopening of assessment
• Section: 147; 148; 143(3)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL BENCH, RANCHI VIRTUAL HEARING AT KOLKATA Before Shri Sonjoy Sarma, Judicial Member and Shri Ratnesh Nandan Sahay, Accountant Member I.T.A. No.20/Ran/2024 Assessment Year: 2014-15 Ability Services Pvt. Ltd…….....................…...........................……….……Appellant 232 Kumhar Para, New Baradwari Sakchi, Jharkhand-831001. [PAN: AACCE1395H] vs. ACIT, Circle-1, Jamshedpur.....…..….…..….........……........……...…..…..Respondent Appearances by: Shri Devesh Poddar, AR, appeared on behalf of the appellant. Shri Khubchand T. Pandya, Sr. DR, appeared on behalf of the Respondent. Date of concluding the hearing : July 02, 2025 Date of pronouncing the order : July 09, 2025 ORDER Per Sonjoy Sarma, Judicial Member: The present appeal has been preferred by the assessee against an order dated 18.12.2023 of the National Faceless Appeal Centre [hereinafter referred to as ‘CIT(A)’] passed u/s 250 of the Income Tax Act (hereinafter referred to as the ‘Act’). 2. Brief facts of the case are that the assessee is engaged in the business of contract and transportation and filed its return of income for the assessment year 2014-15 by declaring total income of Rs.81,52,900/-. The case of the assessee was selected for scrutiny and assessment was framed on a total assessed income of Rs.84,49,220/-. Subsequnetly, proceedings u/s 148 were initiated vide notice dated 30.03.2021 and assessment was completed on 20.03.2022 wherein the Assessing Officer made addition of excess depreciation of Rs.36,64,657/- and payment of EPF/ESI beyond the due date but prior to filing of return of Rs.5,31,940/- I.T.A. No.20/Ran/2024 Ability Services Pvt. Ltd 2 4. Dissatisfied with the above order, the assessee preferred an appeal before the ld. CIT(A) against the reassessment order, where the ld. CIT(A) dismissed the appeal of the assessee and upheld the reassessment order passed by the Assessing Officer. 5. Aggrieved by the said order, the assessee filed the present appeal before this Tribunal raising various grounds. However, the assessee primary contention is that the reassessment proceedings u/s 147 was beyond 4 years from end of the relevant assessment year, therefore, it is invalid order in law as there was no failure on the part of the assessee to disclose truly and fully all material facts necessary for the assessment. He stated that assessment order u/s 143(3) had already completed on 27.12.2016 after verification of document filed by the assessee, therefore, there was no occasion to make further reassessment u/s 148 of the Act. The ld. AR also stated that as per proviso to section 147 where assessment has been completed u/s 143(3), no action can be taken u/s 147 after four years unless there was any failure on the part of the assessee to disclose truly and fully all material facts necessary for the assessment. The ld. AR in order to substantiate his contention relied on the reasons recorded by the Assessing Officer, which is as under: I.T.A. No.20/Ran/2024 Ability Services Pvt. Ltd 3 I.T.A. No.20/Ran/2024 Ability Services Pvt. Ltd 4 5.1 The ld. AR further stressed that in the present case, on going through the reasons recorded for reopening, it is seen that there was no allegation of any failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment. Since no such failure has been established, the condition laid down in first proviso to section 147 of the Act is not satisfied and therefore reopening of assessment is not sustainable. 5.2 In this respect, the ld. AR relied on the judgment of Hon’ble Supreme Court as in the case of Ganga Saran & Sons (P) Ltd. vs. ITO (1981) 130 ITR 1, where it was held that mere change of opinion or vague assumption of the Assessing Officer is not a valid ground for reopening completed assessment, it must be based on failure on the part of the assessee to disclose truly and fully all material facts necessary for the assessment. 6. On the other hand, the ld. DR supported the decisions rendered by the authorities below. 7. We, after hearing of both the parties and perusing the materials available on record, find that the Assessing Officer while issuing notice u/s 147 of the Act nowhere stated that there was any failure on the part of the assessee to disclose truly and fully all material facts necessary for the assessment, therefore, the reassessment order framed by the Assessing Officer is bad in law. We rely on the judgment of Hon’ble Supreme Court as in the case of Ganga Saran & Sons (P) Ltd. vs. ITO (supra). The Assessing Officer failed to specify such fact in reason recorded and there was nothing on record at the time of issuing of notice u/s 147 of the Act thus failure on the part of assessee to disclose truly and fully all material facts necessary for the framing of original I.T.A. No.20/Ran/2024 Ability Services Pvt. Ltd 5 assessment order. Therefore, we set aside the reassessment proceedings and direct the Assessing Officer to delete the addition. 8. In the result, the appeal of the assessee is allowed. Kolkata, the 9th July, 2025. Sd/- Sd/- [Ratnesh Nandan Sahay] [Sonjoy Sarma] Accountant Member Judicial Member Dated: 09.07.2025. RS Copy of the order forwarded to: 1. Appellant 2. Respondent 3. CIT(A)- 4. CIT- , 5. CIT(DR), //True copy// By order Assistant Registrar, Kolkata Benches "