TRIMURTI STEELS,BHUBANESWAR V. INCOME TAX OFFICER, WARD 2(1), BHUBANESWAR

ITA 625/CTK/2025

AI Insights

The case involves Trimurti Steels, a partnership firm, appealing against the order of the Addl./JCIT(A)-1, Nashik, which pertained to the assessment year 2012-13. The primary contention was regarding the reopening of the assessment under Section 148 of the Income Tax Act, 1961, based on the non-registration of the partnership deed. The assessee argued that the partnership deed was indeed in writing and specified the individual shares of the partners, thus meeting the requirements of Section 184. The revenue's position was that the partnership deed's non-registration justified the reopening of the assessment. However, the tribunal found no basis in the recorded reasons for reopening the assessment as they did not demonstrate any failure on the part of the assessee to disclose material facts.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 837615 (ITAT-CUTTACK)
• Duration Of Justice: 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-02-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 11-11-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 147; 148; 143(3)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH CUTTACK BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI MADHUSUDAN SAWDIA, ACCOUNTANT MEMBER ITA No. 625/CTK/2025 (Assessment Year: 2012-13) Trimurti Steels, Plot No. N-3885, Golap Niwas, Samantarapur, Bhubaneshwar-751002 Odisha. PAN No. AAHFT 1240 Q Vs. I.T.O., Ward- 2(1) Bhubaneshwar. Appellant/ Assessee Respondent/ Revenue Assessee represented by Shri Purnendu Bhusan Mohanty, A.R. Department represented by Shri Vijay Singh, Sr. DR Date of hearing 19/02/2026 Date of pronouncement 19/02/2026 O R D E R PER: BENCH 1. This is an appeal filed by the assessee against the order of the ld. Addl./JCIT(A)-1, Nashik in Appeal No. CIT(A), Bhubaneshwar-1/10308/2018- 19 dated 12/09/2025 for the A.Y. 2012-13. 2. Shri Purnendu Bhusan Mohanty, ld. A.R. appeared on behalf of the assessee and Shri Vijay Singh, ld. Sr. DR represented on behalf of the revenue. 3. It was submitted by the ld. AR that the assessee is a partnership firm. The assessee had paid salary to its partners by applying the provisions of Section 40(b)(v) of the Income Tax Act, 1961 (in short, the Act) read with Explanation-3. It was the submission that the original assessment came to be completed under Section 143(3) of the Act on 20/02/2015 accepting the returned income. It was the submission that the assessment was reopened by issuance of notice under Section 148 of Printed from counselvise.com ITA No. 625/Ctk/2025 Trimurti Steels Vs ITO 2 the Act on 29/03/2018. It was the submission that the reasons recorded by the Assessing Officer does not mention that there is failure on the part of the assessee to disclose fully and truly all material facts required for the assessment. The ld. AR drew our attention to the reasons recorded which reads as under: Printed from counselvise.com ITA No. 625/Ctk/2025 Trimurti Steels Vs ITO 3 It was the submission that the reasons only mentioned that the instrument of the firm was not registered with any authority appointed by the State Government. It was the submission that the provisions of the Income Tax Act more specifically Section 184 of the Act required that the partnership deed should be in writing and the individual shares of the partners should be specified in the partnership deed. It was the submission that the partnership deed in the case of the assessee was in writing and the individual shares of the partners were also specified. The only reasons for the reopening were that the said partnership deed was not registered with any authority. It was the submission that the assessee has been assessed as an AOP and the salary paid to the partners have been disallowed. 4. In reply, the ld. Sr.DR vehemently supported the orders of the Assessing Officer and the ld. CIT(A). 5. We have considered the rival submissions. A perusal of the facts in the present case more specifically the reasons recorded which has been extracted above, clearly shows that there is no mention of failure on the part of the assessee to disclose fully and truly all material facts which are required for assessment. The First proviso to Section 147 clearly shows that for the purpose of reopening, if the reopening is done beyond four years and an assessment has already been done in the case of the assessee then there should be failure on the part of the assessee to disclose fully and truly all material facts required for assessment. As the Assessing Officer has not made any mention of such failure nor pointed out any such failure nor even made a whisper of such failure, we are of the view that the reopening of the Printed from counselvise.com ITA No. 625/Ctk/2025 Trimurti Steels Vs ITO 4 assessment is hit by the proviso to Section 147 of the Act and is liable to be quashed and consequently, we quash the reopening. Consequent to the quashing of the notice issued under Section 148 of the Act, the consequential assessment also stands quashed. We may also mention here that the Income Tax Act does not require the registration of the partnership deed before any authority, the requirements of Section 184 in the present case, has been complied with. On both the grounds, the appeal of the assessee stands allowed. 6. In the result, this appeal of the assessee is allowed. Order dictated and pronounced in the open court on 19/02/2026. Sd/- Sd/- (MADHUSUDAN SAWDIA) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER Ranchi, Dated: 19/02/2026 *Ranjan Copy to: 1. Assessee 2. Revenue 3. CIT(A) 4. CIT 5. DR 6. Guard File By Order Assistant Registrar, ITAT, Cuttack Printed from counselvise.com "