SURENDER SINGH,DELHI V. ITO,WARD-40(5), DELHI

ITA 1886/DEL/2024

AI Insights

The case involves an appeal by Surender Singh against the order of the CIT(Appeals)-NFAC, Delhi, which confirmed additions made by the Assessing Officer for the Assessment Year 2011-12. The primary contention was regarding the validity of the reassessment proceedings initiated beyond four years from the end of the relevant assessment year, based solely on audit objections. The Tribunal examined whether the reassessment was justified under section 147 of the Income Tax Act, particularly focusing on the requirement of 'failure on the part of the assessee to disclose fully and truly all material facts' for reassessment beyond four years. The Tribunal concluded that the reassessment was not valid as it was based on a change of opinion and did not meet the statutory requirements for reopening an assessment after four years.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 43525 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Other Referred Cases: ICICI Bank Ltd. Vs. DCIT, ITO Vs. TechSpan India (P) Ltd.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B.S. ANAND
• Assessee Lawyers: B. K. ANAND
• Keywords: Difference of opinion; Change of opinion; Reassessment proceedings; Audit objection; Assessment record; Borrowed satisfaction
• Section: 147; 143(3)

Judgement Text

"I.T.A.No.1886/Del/2024 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “SMC” NEW DELHI BEFORE SHRI S RIFAUR RAHMAN, ACCOUNTANT MEMBER आ.अ.सं/.I.T.A No.1886/Del/2024 िनधा\tरणवष\t/Assessment Year: 2011-12 Surender Singh House No.3A, Vats Market, Near Wine Shop, Village Pitampura, New Delhi. बनाम Vs. ITO Ward 40(5), Delhi. PAN No.AQVPS0239E अपीलाथ\u0012 Appellant \u0014\u0015यथ\u0012/Respondent िनधा\u0007\bरतीक\rओरसे /Assessee by Shri B.K. Anand, CA राज\u0012वक\rओरसे /Revenue by Shri B.S. Anand, Sr. DR सुनवाईक\rतारीख/ Date of hearing: 03.03.2025 उ\u0018ोषणाक\rतारीख/Pronouncement on 19.03.2025 आदेश /O R D E R This appeal is filed by the assessee against the order of the Ld. CIT(Appeals)-NFAC, Delhi dated 26.12.2018 for the AY 2011-12. The assessee has raised the following grounds: - 1. “That the Ld. CIT(Appeals) having not rendered any finding on the merits of the addition made by the AO the impugned appellate order is not sustainable. 2. That the Ld. CIT(Appeals) erred in confirming the addition of Rs.22,50,000/- towards unsecured loan without I.T.A.No.1886/Del/2024 2 considering the evidence available in the assessment records of the assessee. 3. That the Ld. CIT(Appeals) erred in confirming the addition of Rs.11,89,000/- towards cash deposited in bank account without considering the evidence available in the assessment records of the assessee. 4. That on the fact and in the circumstances of the case and in law, the Ld. CIT(Appeals) erred in confirming that the reassessment was validly carried out by the Ld. Income Tax Officer, Ward 40(5) despite the followings: i) Four years had elapsed from the end of relevant assessment year and having disclosed fully and truly all material facts necessary for assessment, no reassessment proceedings is permissible under the law; ii) No fresh facts or new material has been brought on record evidencing escapement of income; iii) Reassessment based on same set of facts as existing in the original assessment, is nothing but mere change of opinion which is not permitted; iv) Review of own assessment order is not permissible in the reassessment proceedings; v) Reassessment proceedings based on audit objection is not sustainable.” Assessee pressed only ground no.4 at this stage and other grounds of appeal not argued and prayed for keeping it open. 2. At the time of hearing, the Ld. AR submitted that the case of the assessee was reopened based on the audit objections raised by the audit committee after the completion of assessment u/s 143(3) I.T.A.No.1886/Del/2024 3 of the Income Tax Act, 1961 (in short the “Act”). As per the audit objection, it was found that assessee has taken cash loans amounting to Rs.22,50,000/- from various parties mainly from farmers and assessee has filed only notary attested affidavits from the concerned parties stating that they have sold their harvest of agriculture. He further submitted that the case of the assessee though original assessment from the impugned AY 2011-12 was completed on 24.12.2013 and during the original assessment proceedings the Assessing Officer has verified the cash deposits amounting to Rs.41.70 lakhs and Rs.17.73 lakhs in his bank account maintained with Oriental Bank of Commerce, Rani Bagh, Delhi and Andhra Bank, Pitampura, Delhi respectively. After verifying the detailed submissions made by the assessee the Assessing Officer has proceeded to make the addition of Rs.97,740/- with the finding that assessee failed to explain the source of deposits. With the above facts on record he submitted that he processed the ground no.4 which is raised by the assessee on jurisdictional issue and submitted that the present assessment was reopened beyond four years and the Assessing Officer has not brought on record any failure on the part of the assessee to disclose fully and truly all material facts. I.T.A.No.1886/Del/2024 4 3. Considering the fact that the assessment was reopened beyond four years and also assessment was completed u/s 143(3) of the Act since the proviso to section 147 is applicable failure on the part of the Assessing Officer to bring on record the material failures on the part of the assessee to disclose fully and truly. In this regard he relied on the decision of the Hon’ble Bombay High Court Division in the case of ICICI Bank Ltd. Vs. DCIT (2025) 171 taxmann.com 617. 4. Further he submitted that the assessment was reopened based on the audit objections in this regard he submitted that the assessment was reopened only based on the audit objections raised by the audit party and the Assessing Officer has reopened the assessment merely on the basis of change of opinion. In this regard he relied on the decision of the Hon’ble Supreme Court in the case of ITO Vs. TechSpan India (P) Ltd. (2018) 404 ITR 10 (SC). 5. On the other hand, the ld. DR relied on the orders of the lower authorities and submitted that the issue of reopening of assessment beyond four years was not taken up before the Ld. CIT(A). 6. Considered the rival submissions and material placed on record, I have observed that the original assessment was completed I.T.A.No.1886/Del/2024 5 on 24/12/2013 and subsequently based on the audit objections raised by the audit party the Assessing Officer has proceeded to reopen the assessment by recording the reasons for reopening in the assessment order itself. It is also brought to my notice that the case of the assessee was selected for scrutiny mainly on the basis of AIR Information that assessee has made cash deposits amounting to Rs.41.7 lakhs and Rs.17.73 lakhs in his bank account after due verification of the same the Assessing Officer has completed the original assessment order. It shows that Assessing Officer has verified all the transactions relating to cash deposits. The Assessing Officer has reopened the assessment by recording the reasons brought on record by the audit party and it is clearly a borrowed satisfaction and his change of opinion without bringing on record proper reasons and it is also fact on record that the present assessment was reopened beyond four years and the provision of 147(1) of the Act is squarely applicable and the Assessing Officer has failed to bring on record the gross failure on the part of the assessee to disclose fully and truly all the material facts in the ROI. Respectfully following the decision of the Hon’ble Supreme Court in the case of TechSpan India (P) Ltd. (supra) and also ICICI Bank Ltd. (supra), I am inclined to quash the reassessment proceedings I.T.A.No.1886/Del/2024 6 initiated by the Assessing Officer without jurisdiction and reopened the same on the borrowed satisfaction. 6.1 In the result, ground no.4 raised by the assessee is allowed and other grounds of appeal are not adjudicated at this stage and these are kept open. 7. In the result, appeal filed by the assessee is allowed. Order pronounced in the open court on 19/03/2025 Sd/- (S RIFAUR RAHMAN) ACCOUNTANT MEMBER Dated: 19.03.2025 *Kavita Arora, Sr. P.S. Copy of order sent to- Assessee/AO/Pr. CIT/ CIT (A)/ ITAT (DR)/Guard file of ITAT. By order Assistant Registrar, ITAT: Delhi Benches-Delhi "