INCOME TAX OFFICER WARD-1(1)(1), MERUT, MEERUT V. ASHISH GUPTA, MEERUT

ITA 560/DEL/2024

AI Insights

The case involves an appeal by the Income Tax Officer against the decision of the Learned CITA, which quashed the reassessment proceedings for the assessment year 2015-16. The reassessment was initially based on information from DDIT investigation, leading to a notice under section 148 of the Income-tax Act, 1961. The assessee's return, filed in response, was treated as non-est by the Learned AO due to non-e-verification, and thus, no notice under section 143(2) was issued, nor were the reasons for reopening the assessment provided. The CITA found these omissions to be fatal to the reassessment proceedings, leading to the quashing of the reassessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 705519 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Assessment Year: 2015-2016
• Other Referred Cases: CIT Vs Hotel Blue Moon, CIT vs Trend Electronics
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AJAY KUMAR ARORA
• Assessee Lawyers: SANKALP MALIK
• Keywords: Reassessment proceedings; Reopening of assessment
• Section: 147; 148; 68; 69C

Judgement Text

"Page | 1 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “A”: NEW DELHI BEFORE SHRI C. N. PRASAD, JUDICIAL MEMBER AND SHRI M. BALAGANESH, ACCOUNTANT MEMBER ITA No. 560/Del/2024 (Assessment Year: 2015-16) Income Tax Officer, Ward-1(1)(1), Meerut Vs. Ashish Gupta, R/o 125, Kamla Villa, civil Lines, Saket, Meerut, UP (Appellant) (Respondent) PAN: AATPG5413C Assessee by : Shri Sankalp Malik, Adv Revenue by: Shri Ajay Kumar Arora, Sr. DR Date of Hearing 03/06/2025 Date of pronouncement 30/06/2025 O R D E R PER M. BALAGANESH, A. M.: 1. The appeal in ITA No.560/Del/2024 for AY 2015-16, arises out of the order of the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘ld. NFAC’, in short] in Appeal No. ITBA/NFAC/S/250/2023- 24/1058725703(1) dated 13.12.2023 against the order of assessment passed u/s 147 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 30.03.2022 by the Assessing Officer, NFAC, Delhi (hereinafter referred to as ‘ld. AO’). 2. The only effective issue to be decided in this appeal of the revenue is as to whether the Learned CITA was justified in quashing the reassessment proceedings as bad in law in the facts and circumstances of the instant case. 3. We have heard the rival submissions and perused the materials available on record. The return of income for the assessment year 2015-16 was originally filed by the assessee on 15-09-2015 declaring taxable income of Rs 9,42,790/-. ITA No. 560/Del/2024 Ashish Gupta Page | 2 This return was duly processed under section 143(1) of the Act accepting the returned income. Subsequently, based on the information received from DDIT investigation, the assessment of the assessee was sought to be reopened vide issuance of notice under section 148 of the Act. In response to the said notice, the assessee filed the return on 25-05-2021 declaring the same taxable income of Rs 9,42,790/- as was admitted in the original return. Since this return of income was not e-verified, the same was treated as invalid and non-est by the Learned AO. The assessee had also sought for furnishing of reasons recorded for reopening of assessment. Since the return filed by the assessee in response to notice under section 148 of the Act was treated as non-est, the Learned AO did not furnish the reasons for reopening of assessment and also did not issue notice under section 143(2) of the Act in the reassessment proceedings. Ultimately, the reassessment proceedings stood completed after making an addition of Rs 43,54,001 under section 68 of the Act and a sum of Rs 1,30,620/- under section 69C of the Act to the returned income of Rs 9,42,790/- under section 147 read with section 144B of the Act on 30-3-2022. 4. The assessee preferred an appeal before the Learned CITA who observed that the Learned AO had not issued notice under section 143(2) of the Act to the assessee and also had not furnished the reasons recorded for reopening of assessment. Both these deficiencies become fatal to the entire reassessment proceedings and accordingly quashed the reassessment. 5. It is not in dispute that no notice under section 143(2) of the Act was ever issued to the assessee in the reassessment proceedings. It is also not in dispute that reasons recorded for reopening the assessment were also not furnished by the Learned AO to the assessee despite making a specific request in that regard. The only shield of the revenue is that the return filed by the assessee in response to notice under section 148 of the Act on 25-05-2021 was not e- verified and accordingly the Learned AO had treated the return as non-est. Since the return was treated as non-est, the stand of the revenue is that there was no requirement for the Learned AO to either issue notice under section 143(2) of ITA No. 560/Del/2024 Ashish Gupta Page | 3 the Act or furnish the reasons recorded for reopening the assessment. But we find from the final page of the assessment order, the Learned AO had started the computation of income from the returned income of Rs 9,42,790/- for computing the assessed income of the assessee. This goes to prove that return filed by the assessee either the original return or the return filed in response to notice under section 148 of the Act has been taken due cognizance by the Learned AO. Having done so, it is mandatory for the Learned AO to issue notice under section 143(2) of the Act first in the reassessment proceedings and also furnish the reasons recorded for reopening of the assessment. Further we find that the Learned AO had intimated on 14-2-2022 to the assessee that the return of income was not e-verified. The assessee immediately on 15-2-2022 (i.e. the very next day) rectifies the same and duly e-verifies the return of income filed in response to notice under section 148 of the Act. The evidence in this regard is enclosed in Page 4 of the Paper Book. This excruciating fact has been ignored by the Learned AO while framing the re-assessment. Admittedly, notice under section 143(2) of the Act was not issued to the assessee in the reassessment proceedings and reasons recorded for reopening the assessment were also not furnished to the assessee by the Learned AO. These become jurisdictional defect and hence not curable even in terms of section 292BB of the Act. Reliance in this regard is placed on the decision of Hon’ble Supreme Court in the case of CIT Vs Hotel Blue Moon reported in 321 ITR 362 (SC) wherein it was held that when no notice under section 143(2) of the Act has been issued, the entire assumption of jurisdiction fails and the assessment proceedings are required to be quashed. Further the Hon’ble Bombay High Court in the case of CIT vs Trend Electronics reported in 379 ITR 456 (Bom) had categorically held that where no reasons recorded for reopening of assessment were furnished to the assessee, it becomes fatal to the entire reassessment proceedings per se and accordingly, the reassessment proceedings are required to be quashed. ITA No. 560/Del/2024 Ashish Gupta Page | 4 6. In view of the above, we find no infirmity in the action of the Learned CITA in quashing the reassessment proceedings. Accordingly, the grounds raised by the revenue are hereby dismissed. 7. In the result, the appeal of the revenue is dismissed. Order pronounced in the open court on 30/06/2025. -Sd/- -Sd/- (C. N. PRASAD) (M. BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 30/06/2025 A K Keot Copy forwarded to 1. Applicant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi "