DIVYA ENGICON PRIVATE LIMITED ,BHAGALPUR, DUMKA V. ITO , DEOGHAR

ITA 2/RAN/2025

AI Insights

The case involves Divya Engicon Private Limited appealing against the order of the CIT(A), NFAC, Delhi, which pertained to the reopening of their assessment for the Assessment Year 2015-16. The reopening was initiated under Section 148 of the Income Tax Act, based on the introduction of INR 25 lakhs towards allotment of shares including share premium, which the assessee contended was not received. The Tribunal examined the procedural validity of the reopening and the substantive merits of the additions made. The Tribunal's decision was influenced by the precedent set by the Bombay High Court in CIT Vs. Aquatic Remedies (P) Ltd., which emphasized the necessity of adhering to specified authority protocols for reopening assessments.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 717041 (ITAT-RANCHI)
• Duration Of Justice: 7 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2015-2016
• Appeal Filed On: 03-01-2025
• Other Referred Cases: CIT Vs. Aquatic Remedies (P) Ltd.
• Laws Referred To: Section 148 of the Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 148

Judgement Text

"P a g e 1 | 8 IN THE INCOME TAX APPELLATE TRIBUNAL, RANCHI BENCH, RANCHI BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI RATNESH NANDAN SAHAY, ACCOUNTANT MEMBER ITA No. 02/Ran/2025 (Assessment Year: 2015-16) Divya Engicon Private Limited, Divya Place, Bhagalpur Road, Opp.- Rajdoot Showroom, Dumka-814101 (Jharkhand) PAN No. AADCD 2053 Q Vs. I.T.O., Deoghar. Appellant/ Assessee Respondent/ Revenue Assessee represented by Shri Devesh Poddar, AR. Department represented by Shri Khubchand T. Pandya, Sr.DR Date of hearing 21/08/2025 Date of pronouncement 21/08/2025 O R D E R PER: BENCH 1. This is an appeal filed by the assessee against the order of the ld. CIT(A), NFAC, Delhi in Appeal No. CIT(A), Dhanbad/10119/2019-20 dated 05/08/2024 for the A.Y. 2015-16. 2. Shri Devesh Poddar, ld. A.R. is represented on behalf of the assessee and Shri Khubchand T. Pandya, ld. Sr. DR is represented on behalf of the revenue. 3. It was submitted by the ld. AR that the assessment of the assessee has been reopened by issuance of notice under Section 148 of the Act. The ld. Authorised Representative drew our attention to page No. 1 of the assessment order para 2 wherein the Assessing Officer has mentioned that Printed from counselvise.com ITA 02/Ran/2025 Divya Engicon P. Ltd. Vs ITO P a g e 2 | 8 the proposal for reopening had been sent to the Pr.CIT, Dhanbad and the approval has been taken from the Pr.CIT, Dhanbad. It was a submission that the impugned assessment yes is 2015-16 and the notice under Section 148 has been issued on 25/03/2019 which is within four years period from the end of the relevant assessment year. It was a submission that when the reopening is done in respect of the an assessment year and the reopening is done within four years from the end of the relevant assessment year, the approval is to be taken from the ld. JCIT/Addl.CIT. It was a submission that the approval having been taken from the Pr.CIT is erroneous and the reopening is liable to be quashed on that ground. It was a further submission that even on merits, the reopening has been done for the reasons that the assessee has introduced ₹ 25.00 lacs towards allotment of shares including share premium. It was a submission that the assessee has not received such share application money. The ld. AR drew our attention to the balance sheet as on 31/03/2015 and 31/03/2014 which reads as follows: Printed from counselvise.com ITA 02/Ran/2025 Divya Engicon P. Ltd. Vs ITO P a g e 3 | 8 Printed from counselvise.com ITA 02/Ran/2025 Divya Engicon P. Ltd. Vs ITO P a g e 4 | 8 Printed from counselvise.com ITA 02/Ran/2025 Divya Engicon P. Ltd. Vs ITO P a g e 5 | 8 Printed from counselvise.com ITA 02/Ran/2025 Divya Engicon P. Ltd. Vs ITO P a g e 6 | 8 It was a submission that the balance sheet clearly showed that there was no increase in the share capital of the assessee from that of 31/03/2014. It was a further submission that even in the assessment order, the Assessing Officer Printed from counselvise.com ITA 02/Ran/2025 Divya Engicon P. Ltd. Vs ITO P a g e 7 | 8 does not make any reference to from whom the assessee has received the said share application money. It was a submission that even on merits, the addition itself was not called for. 4. In reply, the ld. Sr.DR vehemently supported the order of the Assessing Officer and the ld. CIT(A) 5. We have considered the rival submissions. Admittedly, when the reopening is being done within four years from the end of the relevant assessment year, the approval for the reopening is to be taken from the JCIT/Addl.CIT. In the present case, the approval has been taken from the Pr.CIT, Dhanbad. The Hon'ble Bombay High Court in the case of CIT Vs. Aquatic Remedies (P) Ltd. (2018) 406 ITR 545 (Bom) had categorically held that where the reopening is to be done by a specified authority, the same cannot be done by any other authority even if it is a superior authority. This being so, respectfully following the decision of the Hon'ble Bombay High Court in the case of CIT Vs. Aquatic Remedies (P) Ltd. (supra) which has been approved by Hon'ble Supreme Court 113 taxmann.com 451 (SC), the reopening as done in the impugned appeal stands quashed. 6. Further even on merits, a perusal of the balance sheet clearly shows that the assessee has not received the share capital nor introduced such share capital during the impugned assessment year. Therefore, the reopening itself as also the addition in the assessment is reopening is on a wrong information and the addition as made is also not sustainable in so far as the assessee has not received such share applicable money. Printed from counselvise.com ITA 02/Ran/2025 Divya Engicon P. Ltd. Vs ITO P a g e 8 | 8 7. In the result, the appeal of the assessee is allowed. Order announced in open court on 21st August, 2025. Sd/- Sd/- (RATNESH NANDAN SAHAY) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER Ranchi, Dated: 21/08/2025 *Ranjan Copy to: 1. Assessee 2. Revenue 3. CIT 4. DR By order 5. Guard File Sr. Private Secretary, ITAT, Ranchi Printed from counselvise.com "