BRISK INFRASTRUCTURE AND DEVELOPERS (P) LTD,NEW DELHI V. ACIT, CIRCLE-5(1), NEW DELHI, NEW DELHI

ITA 2942/DEL/2023

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 23539 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: APPELLANT; SAHIL KUMAR BANSAL
• Assessee Lawyers: RAKESH GUPTA
• Keywords: Set aside; Reason to believe
• Section: 147; 148; 143(3); 143(2); 143(1); 139

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘A’ NEW DELHI BEFORE SHRI M. BALAGANESH, ACCOUNTANT MEMBER AND SHRI VIMAL KUMAR, JUDICIAL MEMBER ITA No. 2942/Del/2023 (Assessment Year : 2009-10) M/s. Brisk Infrastructure and Developers (P.) Ltd. B-1/1001, Pocket-B, Vasant Kunj, New Delhi – 110 070 PAN : AACCB 3672 N Vs. ACIT Circle – 5(1) Delhi (Appellant) (Respondent) Assessee by Dr. Rakesh Gupta, Adv. and Shri Somil Agarwal, Adv. Respondent by Shri Sahil Kumar Bansal, Sr. D.R. Date of Hearing 22.01.2025 Date of Pronouncement 29.01.2025 O R D E R PER VIMAL KUMAR, JM: 1. The appeal filed by assessee is against the order dated 06.10.2023 of Learned Commissioner of Income Tax (Appeals)-23, New Delhi [hereinafter referred to as ‘Ld. CIT(A)’] arising out of assessment order dated 28.12.2016 passed by the Asst. Commissioner of Income Tax-5(1), Delhi (hereinafter referred as ‘Ld. AO’) under section 147/143(3) of the Income Tax Act, 1961 -2- ITA No.2942/Del/2023 Brisk Infrastructure and Developers (P.) Ltd. vs. ACIT A.Y. 2009-10 [hereinafter referred to as “the Act”] for the Assessment Year 2009- 10. 2. Brief facts of case are that on 30.09.2009, assessee filed return of income declaring income of Rs.57,98,660/-. The case was reopened under section 148 of the Act with prior approval of learned Pr. CIT, Delhi vide approval letter dated 29.03.2016 as per information received from letter dated 18.03.2016. In response to notice, Shri Dinesh Sharma, Authorized Representative attended and filed submission vide letter dated 02.05.2016 vide which he requested that ITR filed originally on 30.09.2009 may be treated the return of income filed with respect to the notice under section 148 of the Act. The assessee requested for copy of reasons recorded for reopening under section 147 of the Act. Assessee vide letter dated 15.04.2016 filed written submission regarding its objections to the reopening of assessment under section 147 of the Act. Subsequently, notice under section 143(2) dated 16.05.2016 was issued to the assessee. Copy of reasons recorded were provided on 01.08.2016. The assessee was show-caused vide letter dated 25.11.2016. Assessee filed reply to the show-cause notice. On completion of proceedings, learned AO vide order dated 28.12.2016 made addition of Rs.9,05,68,950/-. 3. Being aggrieved, appellant/assessee preferred appeal before the learned CIT(A) which was dismissed vide order dated 06.10.2023. -3- ITA No.2942/Del/2023 Brisk Infrastructure and Developers (P.) Ltd. vs. ACIT A.Y. 2009-10 4. Being aggrieved, appellant/assessee preferred present appeal. 5. Learned Authorized Representative for appellant/assessee by referring the ground nos.1 & 2 submitted that learned CIT(A) failed to appreciate that assumption of jurisdiction in initiating the proceedings and passing re-assessment order and that too without complying with mandatory conditions as envisaged, is bad in law. Learned CIT(A) erred in not appreciating that assumption of jurisdiction and passing the impugned order is illegal. 5.1 Learned Authorized Representative for the appellant/assessee submitted that learned CIT(A) failed to appreciate that assessment order under section 143(3) of the Act was passed on 28.12.2011. Reasons for reopening at pages 51 to 58 of the paper book did not refer to the reasons to believe that any income chargeable to tax has escaped assessment for any assessment year. Hon’ble High Court of Delhi in the case of Wel Intertrade (P.) Ltd. & Anr. Vs. Income Tax Officer reported in (2009) 178 Taxman 0027 observed as under : “A plain reading of proviso to s. 147 makes it more than clear that where the provisions of s. 147 are being invoked after the period of four years from the end of the relevant assessment year, in addition to the AO having reason to believe that any income chargeable to tax has escaped assessment, it must also be established as a fact that such escapement of assessment has been occasioned by either the assessee failing to make a return under s. 139, etc. or by reason of failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for that assessment year. In the present case, the only question is with regard to the second portion of the proviso, which relates to failure on the part of -4- ITA No.2942/Del/2023 Brisk Infrastructure and Developers (P.) Ltd. vs. ACIT A.Y. 2009-10 the assessee to disclose fully and truly all material facts necessary for assessment. Insofar as this precondition is concerned, there is not a whisper of it in the reasons recorded by the AO. In fact, the AO could not have made this a ground because the AO had required the petitioner to furnish details with regard to loss occasioned by foreign exchange fluctuation which the petitioner did by virtue of the reply dt. 5th Feb., 2002. Since the petitioner had fully and truly disclosed all the material facts necessary for the assessment, the precondition for invoking the proviso to s. 147 had not been satisfied. The AO has acted wholly without jurisdiction. The invocation of s. 147, the issuance of the notice under s. 148 and the subsequent order on the objections are all without jurisdiction. The impugned notice as well as the proceedings pursuant thereto are quashed.-Duli Chand Singhania vs. Asstt. CIT (2004) 188 CTR (P&H) 90: (2004) 269 ITR 192 (P&H) concurred with.” 5.2 Learned Authorized Representative for the appellant/assessee also referred to the judgment of Hon’ble High Court of Bombay in the case of Hindustan Lever Ltd. vs. R. B. Wadkar reported in (2004) 268 ITR 0332 and (2004) 137 Taxman 0479. 6. Learned Departmental Representative for the Department relied on the discussion of learned CIT(A). 7. From examination of record in light of aforesaid rival contentions, it is crystal clear that appellant/assessee had filed return of income on 30.09.2009 for A.Y. 2009-10. The return was processed under section 143(1) of the Act. The assessment proceedings under section 143(3) of the Act were completed by learned AO vide order dated 28.12.2011. On receipt of information vide letter dated 18.03.2016 and analysis of documents vide -5- ITA No.2942/Del/2023 Brisk Infrastructure and Developers (P.) Ltd. vs. ACIT A.Y. 2009-10 reasons dated 23.03.2016 notice under section 148 of the Act was issued. 7.1 As per proviso to section 147 where the provisions of Section147 are being invoked after four years from the end of relevant assessment year, the AO has reasons to believe that any income chargeable to tax has escaped assessment, it must be established as a fact that escapement of assessment has occasioned the assessee failing to make a return under section 139 of the Act or reasons of failure on part of assessee to disclose fully and truly all material facts necessary for assessment reference to judgment in the case of Wel Intertrade (P.) Ltd. & Anr. Vs. Income Tax Officer’s case (supra) is important. 7.2 Hon’ble High Court of Bombay in the case of Hindustan Lever Ltd. vs. R. B. Wadkar’s case (supra) observed as under: “20. The reasons recorded by the AO nowhere state that there was failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment of that assessment year. It is needless to mention that the reasons are required to be read as they were recorded by the AO. No substitution or deletion is permissible. No additions can be made to those reasons. No inference can be allowed to be drawn based on reasons not recorded. It is for the AO to disclose and open his mind through reasons recorded by him. He has to speak through his reasons. It is for the AO to reach to the conclusion as to whether there was failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for the concerned assessment year. It is for the AO to form his opinion. It is for him to put his opinion on record in black and white. The reasons recorded should -6- ITA No.2942/Del/2023 Brisk Infrastructure and Developers (P.) Ltd. vs. ACIT A.Y. 2009-10 be clear and unambiguous and should not suffer from any vagueness. The reasons recorded must disclose his mind. Reasons are the manifestation of mind of the AO. The reasons recorded should be self-explanatory and should not keep the assessee guessing for the reasons. Reasons provide link between conclusion and evidence. The reasons recorded must be based on evidence. The AO, in the event of challenge to the reasons, must be able to justify the same based on material available on record. He must disclose in the reasons as to which fact or material was not disclosed by the assessee fully and truly necessary for assessment of that assessment year, so as to establish vital link between the reasons and evidence. That vital link is the safeguard against arbitrary reopening of the concluded assessment. The reasons recorded by the AO cannot be supplemented by filing affidavit or making oral submission, otherwise, the reasons which were lacking in material particulars would get supplemented, by the time the matter reaches to the Court, on the strength of affidavit or oral submissions advanced. 21. Having recorded our finding that the impugned notice itself is beyond the period of four years from the end of the asst. yr. 1996-97 and does not comply with the requirements of proviso to s. 147 of the Act, the AO had no jurisdiction to reopen the assessment proceedings which were concluded on the basis of assessment under s. 143(3) of the Act. On this short count alone the impugned notice is liable to be quashed and set aside.” 7.3 In view of above material facts and well settled principle of law, the proceedings beyond the period of four years from the end of A.Y. 2009-10 without complying the requirements of proviso to section 147 of the Act, the learned AO has no jurisdiction to reopen the assessment proceedings, which were concluded on basis of assessment under section 143(3) of the Act. On this score alone, the impugned orders of learned AO and CIT(A) are liable to be quashed and are set aside. The grounds of appeal nos.1 and 2 are allowed. -7- ITA No.2942/Del/2023 Brisk Infrastructure and Developers (P.) Ltd. vs. ACIT A.Y. 2009-10 8. The ground of appeal nos.3 to 7 being not pressed and are left open. 9. In the result, appeal of the assessee is allowed. Order pronounced on this day 29th January, 2025 Sd/- Sd/- (M. BALAGANESH) (VIMAL KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 29.01.2025 Pr i ti Y adav, S r. PS * Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI "