RAJINDER SINGH CHADHA,RAIPUR V. ITO, JAGDALPUR

ITA 120/RPR/2025

AI Insights

The case revolves around the reassessment order issued to Rajinder Singh Chadha for the assessment year 2014-15, which was challenged on the grounds of being time-barred and lacking substantive evidence of any failure on the part of the assessee to disclose material facts. The Income Tax Officer had reopened the assessment after six years, which was beyond the statutory limit of four years unless specific conditions were met under section 147 of the Act. The Tribunal, referencing decisions from the Hon'ble Jurisdictional High Court and the Supreme Court, concluded that the reassessment was not in accordance with the statutory provisions, leading to the quashing of the reassessment order and the subsequent revisionary order under section 263.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 712092 (ITAT-RAIPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2014-2015
• Other Referred Cases: Hariom Ingots and Power Pvt. Ltd. Vs. Pr. CIT, Avanindra Nath Agrawal Vs. DCIT, Circle-1(1), Raipur, Union of India Vs. Rajeev Bansal
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S.L ANURAGI
• Assessee Lawyers: ABHISHEK MAHAWAR
• Keywords: Set aside; Reassessment proceedings; Depreciation; Reason to believe; Tangible material
• Section: 147; 148; 263; 139

Judgement Text

"आयकर अपीलȣय अͬधकरण Ûयायपीठ रायपुर मɅ। IN THE INCOME TAX APPELLATE TRIBUNAL, RAIPUR BENCH, RAIPUR BEFORE SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER AND SHRI ARUN KHODPIA, ACCOUNTANT MEMBER आयकर अपील सं. / ITA No.120/RPR/2025 Ǔनधा[रण वष[ / Assessment Year : 2014-15 Rajinder Singh Chadha Bagdeo Vatika, Near Wallfort Paradise, Landmark Vedanta City, Village-Kandul, PAN: ACBPC2392L ........अपीलाथȸ / Appellant बनाम / V/s. The Income Tax Officer, Ward-Jagdalpur (C.G.) ……Ĥ×यथȸ / Respondent Assessee by : Shri Abhishek Mahawar, CA Revenue by : Shri S.L Anuragi, Sr. DR सुनवाई कȧ तारȣख / Date of Hearing : 23.07.2025 घोषणा कȧ तारȣख / Date of Pronouncement : 24.07.2025 Printed from counselvise.com 2 Rajinder Singh Chadha Vs. ITO, Jagdalpur ITA No. 120/RPR/2025 आदेश / ORDER PER PARTHA SARATHI CHAUDHURY, JM: This appeal preferred by the assessee emanates from the order of the Ld. Pr. Commissioner of Income Tax, Raipur-1 (for short ‘Pr. CIT”) u/s.263 of the Income Tax Act, 1961 (for short ‘the Act’) dated 16.03.2024 for the assessment year 2014-15 as per the grounds of appeal on record. 2. The Ld. Counsel for the assessee submitted that reassessment framed by the A.O u/s. 147 r.w.s.144B of the Act, dated 26.03.2022 itself is invalid since such reopening has been done beyond the period of four years from the end of the relevant assessment year and without compliance to Section 147, 1st proviso of the Act. Since reassessment itself is invalid and void ab initio, therefore, the Pr. CIT could not have resorted to assuming revisionary jurisdiction against an invalid and void order, therefore, such order passed u/s. 263 of the Act is liable to be set aside. 3. Demonstrating the same, the Ld. Counsel for the assessee referred to the notice issued u/s. 148 of the Act for A.Y.2014-15 dated 29.03.2021 and submitted that for A.Y.2014-15, reopening should have been initiated within 31.03.2019 whereas in the case of the assessee notice u/s. 148 of the Act was issued on 29.03.2021 i.e. almost after six years. The same is Printed from counselvise.com 3 Rajinder Singh Chadha Vs. ITO, Jagdalpur ITA No. 120/RPR/2025 also accepted by the department in the reasons furnished dated 20.02.2022 which reads as follows: Printed from counselvise.com 4 Rajinder Singh Chadha Vs. ITO, Jagdalpur ITA No. 120/RPR/2025 Printed from counselvise.com 5 Rajinder Singh Chadha Vs. ITO, Jagdalpur ITA No. 120/RPR/2025 4. That as evident from the aforesaid, the case of the assessee has been reopened beyond the period of four years which has been accepted by the department. That further, there is no iota of evidence regarding any failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment in that relevant assessment year. In fact, in the reasons furnished there is no whisper at all regarding any such failure on the part of the assessee. In this factual scenario, we take guidance from the decision of the Hon’ble Jurisdictional High Court in the case of Hariom Ingots and Power Pvt. Ltd. Vs. Pr. CIT (2022) 444 ITR 306 (C.G.). In the said decision, the Hon’ble Jurisdictional High Court had held as follows: “6…………. For issuance of notice under Section 148 of the I.T. Act, there should be tangible material and mandatory compliance of Section 147 of I.T. Act. Proceedings of reassessment has been initiated against company after lapse of 4 years of submission of return, which is not in dispute. Under first proviso to Section 147 of the I.T. Act, for starting the reassessment proceedings after lapse of 4 years, Assessing Officer has to record his conclusion that there was failure on the part of assessee in not disclosing fully and truly all material facts necessary for assessment of that particular assessment year, which is not appearing from the reading of the Annexure i.e. reasons for issuance of notice. 7. Considering the aforementioned facts and circumstances of the case, reason assigned for issuance of notice and provisions mentioned therein, in the opinion of this Court, there was no reason/ground available with Assessing Officer to issue notice under Section 148 of the I.T. Act. Issuance of notice under Section 148 of the I.T. Act to petitioner is not in accordance with the first proviso to Section 147 of the I.T. Act, therefore, it is not sustainable, which is liable to be quashed and it is hereby quashed. Printed from counselvise.com 6 Rajinder Singh Chadha Vs. ITO, Jagdalpur ITA No. 120/RPR/2025 8. The writ petition is accordingly allowed.” 5. In the aforesaid binding decision, it has been laid down by the Hon’ble Jurisdictional High Court that when reassessment proceedings are initiated after lapse of four years, in such case as per the “1st proviso” to Section 147 of the Act, the A.O has to record his satisfaction that there was failure on the part of assessee disclosing fully and truly all material facts necessary for assessment for that particular assessment year. That when there was no satisfaction available with the A.O with regard to the “1st proviso” to Section 147 of the Act, in such scenario, issuance of notice u/s. 148 of the Act itself is not in accordance with the provisions of the Act thereby liable to be quashed. The writ petition of the assessee was allowed. 6. Further, we find that ITAT, Raipur “DB” Bench in the case of the Avanindra Nath Agrawal Vs. DCIT, Circle-1(1), Raipur, ITA No. 128/RPR/2025, dated 22.07.2025 had dealt with the similar issue observing as follows: “4. At the same time, the department has failed to bring on record any evidence suggesting any failure on the part of the assessee for disclosing truly and fully all material facts necessary for assessment. In this regard, the Ld. Sr. DR was directed to furnish report from the A.O and the said report was placed by her on record. The relevant submission of the A.O as per the said report is extracted as follows: “(2) The reassessment proceedings have to be invoked within a span of 4 years however in the case of the assessee the same was reopened after 6 years. Printed from counselvise.com 7 Rajinder Singh Chadha Vs. ITO, Jagdalpur ITA No. 120/RPR/2025 As per old provisions of the Act, Notice u/s. 148 could be issued for 4 years from the end of A.Y. Further, Notice u/s. 148 could have been issued upto 6 years from the end of A.Y in cases where income escaping assessment is Rs.1 lakh or more. Since, in the case of the assessee income escaping assessment for A.Y.2012-13 is Rs.61,65,450/- which is more than Rs.1 lakh therefore the case of the assessee was rightly reopened within 6 years by issuing notice u/s. 148 of the Act, dated 31.03.2019.” As evident, it is admitted by the department that the case of the assessee was reopened after 6 years. It is also the contention of the A.O that notice u/s. 148 of the Act can be issued upto 6 years from end of the assessment year in cases where income escaping assessment is Rs.1 lakh or more and since in the case of the assessee income escaping assessment for A.Y.2012-13 is Rs.61,65,450/- which was more than Rs.1 lakh therefore, the case of the assessee was rightly reopened within 6 years by issuing notice u/s. 148 of the Act, dated 31.03.2019. 5. In this regard, let us refer to relevant provision of Section 147 of the Act which deals with the contended issue before us: “147. Income escaping assessment.—If the Assessing Officer has reason to believe\" that any income chargeable to tax has escaped assessment\" for any assessment year, he may\", subject to the provisions of sections 148 to 153, assess or reassess\" such\" income \"and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings\" under this section, or recompute the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year) : Provided that where an assessment under sub-section (3) of section 143 or this 'section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under Printed from counselvise.com 8 Rajinder Singh Chadha Vs. ITO, Jagdalpur ITA No. 120/RPR/2025 section 139 or in response to a notice issued under sub- section (1) of section 142 or section 148 or to disclose fully and truly all material fact necessary for his assessment, for that assessment year……” 6. That as evident as applicable to the assessment year in question i.e. A.Y.2012-13 wherein assessment has been completed for the relevant assessment year, no action shall be taken as per this provision after expiry of 4 years from the end of the relevant assessment year unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148 or to disclose fully and truly all material fact necessary for his assessment, for that assessment year. None of the limbs applies to the case of the assessee nor the revenue has able to place on record any evidence regarding any failure on the part of the assessee “to disclose truly and fully all material facts necessary for assessment.” At the same time, ground taken by the A.O justifying the reopening beyond the period of 6 years saying that whenever there is a case where income escaping assessment is Rs.1 lakhs or more, in such cases, notice u/s. 148 of the Act could have been issued upto 6 years from the end of the assessment year, however, no such limb emanates from the said proviso to Section 147 of the Act and therefore, this reason as stated by the A.O is not emanating from the statute, hence, the said observation is perverse and infructuous and does not contain legal validity. We find that the Hon’ble Supreme Court in its recent order passed in the case of Union of India Vs. Rajeev Bansal (2024) 469 ITR 46 (SC) had, inter alia, observed that the order passed without jurisdiction is nullity. It was further observed that if a statute expressly confers a power or imposes a duty on a particular authority, then such power or duty must be exercised or performed by that authority itself. Elaborating further, the Hon’ble Apex Court had observed that any exercise of power by statutory authorities inconsistent with the statutory prescription is invalid. Apart from that, it was observed that as there cannot be any waiver of a statutory requirement or provision that goes to the root of the jurisdiction of assessment, therefore, any consequential order passed or action taken will be invalid and without jurisdiction. For the sake of clarity, the observations of the Hon’ble Apex Court are culled out as under: “xxxx xxxx xxxx xxxx xxxx Printed from counselvise.com 9 Rajinder Singh Chadha Vs. ITO, Jagdalpur ITA No. 120/RPR/2025 30. If a statute expressly confers a power or imposes a duty on a particular authority, then such power or duty must be exercised or performed by that authority itself. (Dr. Premachandran Keezhoth Vs. Chancellor, Kannur University). Further, when a statute vests certain power in an authority to be exercised in a particular manner, then that authority has to exercise its power following the prescribed manner (CIT Vs. Anjum M.H. Ghaswala; State of Uttar Pradesh Vs. Singhara Singh). Any exercise of power by statutory authorities inconsistent with the statutory prescription is invalid…………. xxxx xxxx xxxx xxxx xxxx 32. A statutory authority may lack jurisdiction if it does not fulfil the preliminary conditions laid down under the statute, which are necessary to the exercise of its jurisdiction. (Chhotobhai Jethabhai Patel and Co. V. Industrial Court, Maharashtra Nagpur Bench). There cannot be any waiver of a statutory requirement or provision that goes to the root of the jurisdiction of assessment. (Superintendent of Taxes Vs. Onkarmal Nathmal Trust). An order passed without jurisdiction is a nullity. Any consequential order passed or action taken will also be invalid and without jurisdiction. (Dwarka Prasad Agrawal V. B.D. Agrawal). Thus, the power of assessing officers to reassess is limited and based on the fulfilment of certain preconditions. (CIT Vs. Kelvinator of India Ltd.)” Therefore, considering the facts that viz. (i) reopening was done beyond the period of 6 years; (ii) department has not proved any failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment; (iii) the A.O has stated frivolous invalid ground justifying the action of the department, therefore, such reassessment proceedings initiated beyond the period of 6 years is invalid, void ab initio, hence quashed. 7. Since the reassessment is quashed thereafter all the other proceedings becomes non-est in the eyes of law. As the legal issue has been answered in favour of the assessee therefore the grounds on merits becomes academic only. 8. As per the aforesaid terms the grounds of appeal raised by the assessee stands allowed. Printed from counselvise.com 10 Rajinder Singh Chadha Vs. ITO, Jagdalpur ITA No. 120/RPR/2025 9. In the result, appeal of the assessee is allowed.” 7. Respectfully following the aforesaid decisions on the same parity of reasoning we hold that the reassessment is invalid, arbitrary and bad in law, hence quashed. 8. When reassessment order itself is quashed, therefore, the order of the Pr. CIT invoking revisionary jurisdiction u/s.263 of the Act shall be non-est in the eyes of law. In view thereof, the order passed by the Pr. CIT u/s. 263 of the Act is set-aside. 9. In the result, appeal of the assessee is allowed. Order pronounced in the open court on 24th day of July, 2025. Sd/- Sd/- ARUN KHODPIA PARTHA SARATHI CHAUDHURY (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) रायपुर/ RAIPUR ; Ǒदनांक / Dated : 24th July, 2025. SB, Sr. PS आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of the Order forwarded to : 1. अपीलाथȸ /The Appellant. 2. Ĥ×यथȸ /The Respondent. 3. The Pr. CIT-1, Raipur (C.G.) 4. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण, रायपुर बɅच, रायपुर / DR, ITAT, Raipur Bench, Raipur. 5. गाड[ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, Printed from counselvise.com 11 Rajinder Singh Chadha Vs. ITO, Jagdalpur ITA No. 120/RPR/2025 // True Copy // Senior Private Secretary आयकर अपीलȣय अͬधकरण, रायपुर / ITAT, Raipur. Printed from counselvise.com "