AZAD ,AMROHA V. ITO,WARD-1(1), MORADABAD

ITA 3/DEL/2024

AI Insights

The case involves an appeal by the assessee, Azad C/o-Ramzani, against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, which arose from an assessment order passed under sections 148/144 of the Income Tax Act, 1961 for the assessment year 2015-16. The primary contention was the legitimacy of the jurisdiction assumed under section 147 and the addition of unexplained cash deposits amounting to INR 61,32,443. The tribunal, referencing several High Court judgments, concluded that the reopening of the assessment was based on a fundamentally incorrect premise that the assessee had not filed a return, leading to the quashing of the re-assessment proceedings.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 470452 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2015-2016
• Other Referred Cases: Arvind Sahdeo Gupta vs ITO-1, Shri Tarlochan Lal Goel vs ACIT, Central Circle-62(1), Pr.CIT-7, Delhi vs Shree Balkishan Agarwal Glass Industries Ltd., Kunwar Ayub Ali vs ITO
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANDEEP PANWAR
• Assessee Lawyers: MAYANK PATAWAR; AKASH OJHA
• Keywords: Set aside; Reopening of assessment; Reason to believe
• Section: 147; 148; 250

Judgement Text

"ITA No.3/Del/2024 Page | 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI “E” BENCH: NEW DELHI BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI SUDHIR KUMAR, JUDICIAL MEMBER ITA No.3/Del/2024 [Assessment Year : 2015-16] Azad C/o-Ramzani, H.No.74 Mohalla Machratta, Amroha Uttar Pradesh-244221 PAN-AKZPA0011E vs ITO Ward-1(1) Moradabad APPELLANT RESPONDENT Appellant by Shri Mayank Patawar, CA & Shri Akash Ojha, Adv Respondent by Shri Mandeep Panwar, Sr.DR Date of Hearing 06.01.2025 Date of Pronouncement 19.02.2025 ORDER PER PRADIP KUMAR KEDIA, AM : The instant appeal has been filed at the instance of the assessee seeking to assail the First Appellate order dated 10.11.2023 passed by Ld. Commissioner of Income Tax (A), National Faceless Appeal Centre (“NFAC”), Delhi [“Ld.CIT(A)”] u/s 250 of the Income Tax Act, 1961 [“the Act”] arising from the assessment order dated 27.11.2018 passed u/s 148/144 of the Act pertaining to assessment year 2015-16. 2. As per the grounds of appeal and additional ground, the assessee has challenged the legitimacy of jurisdiction assumed under s. 147 of the Act as well as addition made by the AO towards allegedly unexplained cash deposits in bank amounting to INR 61,32,443/-. 3. We have heard the rival submissions carefully. As pointed out on behalf of the assessee, the belief towards escapement of chargeable income has been entertained by the AO on the basis that the assessee has not filed the return of income for AY 2015-16 in question which is grossly contrary to the facts on record. It is demonstrated on behalf of the assessee that the assessee has duly ITA No.3/Del/2024 Page | 2 filed return of income on 18.06.2018. Hence, the most basic reason of holding belief itself is wholly incorrect and not existed at the time of recordings of the reasons. 4. ‘Reason to believe’ is the starting point for re-opening a case. A freak foundation or reason that assessee did not file ROI is blatantly contrary to the facts. Belief stemmed from wholly unfounded reasons thus betrays the pre- requisites of s. 147 of the Act. We find that the issue is squarely covered in favour of the assessee by the judgement of Hon’ble Bombay High Court in the case of Arvind Sahdeo Gupta vs ITO-1 Writ Petition No.4793 of 2021 dated 08.08.2023; judgements of Hon’ble High Court of Delhi in the cases of Shri Tarlochan Lal Goel vs ACIT, Central Circle-62(1) in Writ Petiton (C) 13342/2018 dated 17.08.2023 and Pr.CIT-7, Delhi vs Shree Balkishan Agarwal Glass Industries Ltd. [ITA No.401/2024] dated 30.07.2024 and the decision of the Co-ordinate Bench of the Tribunal in the case of Kunwar Ayub Ali vs ITO in ITA No.3137/Del/2018 (Del.) order dated 17.04.2023 wherein several judgements of the Hon’ble High Courts of different jurisdictions have been referred and it was held that where the reasons cited that the assessee did not file the return of income was found to be factually incorrect, the notice issued under s. 148 of the Act for re-opening of assessment requires to be quashed for assumption of jurisdiction on extraneous grounds. 5. In the light of the judgements rendered in the cases of Arvind Sahdeo Gupta; Shri Tarlochan Lal Goel; Pr.CIT-7, Delhi vs Shree Balkishan Agarwal Glass Industries Ltd. and Kunwar Ayub Ali (supra) expounding the position of law, we find palpable merit in the plea of the assessee towards inherent lack of jurisdiction under s. 147 of the Act. 6. The re-opening proceedings itself being not permissible on the basis of inherently wrong facts, we do not consider it necessary to delve into the merits of the additions. We thus set aside the action of the CIT(A) and quash the re- assessment proceedings giving rise to the present appeal. ITA No.3/Del/2024 Page | 3 7. In the result, the appeal of the assessee is allowed. Order dictated and pronounced in the open Court on 19.02.2025. Sd/- Sd/- (SUDHIR KUMAR) JUDICIAL MEMBER *Amit Kumar, Sr.P.S* (PRADIP KUMAR KEDIA) ACCOUNTANT MEMBER Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI "