Jaibro Industries Vs ACIT (ITAT Delhi)
Late Return After 148 Notice Can’t Kill Reassessment: Bogus Commission to Shell Entity Taxable u/s 68- Delhi ITAT Upholds 68 Addition
ITAT Rejects Technical Plea on 143(2)- Assessee Can’t Take Advantage of Own Default: Reassessment & 68 Addition Sustained
Delhi ITAT ‘A’ Bench in Jaibro Industries vs ACIT, Circle-36(1), New Delhi (ITA No.100/Del/2025, AY 2012-13, order dated 23-12-2025) dismissed the assessee’s appeal and upheld the reassessment u/s 147 as well as addition of ₹9.41 lakh u/s 68, holding that the assessee cannot defeat proceedings by filing return at the fag end and then alleging non-issuance of notice u/s 143(2).
Reassessment was initiated based on search-related information from Skylark Group, revealing accommodation-entry operations. AO issued notice u/s 148 on 27-03-2019, but the assessee filed return only on 17-12-2019, leaving virtually no time for issuance of notice u/s 143(2). AO completed assessment on 30-12-2019, making addition of ₹9.41 lakh, being commission allegedly paid to M/s Sharma Engineers & Consultants, a paper/shell entity controlled by entry operators.
Before ITAT, assessee contended that the assessment was void for non-issuance of notice u/s 143(2) and that section 68 was wrongly invoked. Tribunal rejected both pleas. It held that the assessee failed to comply with statutory notice u/s 148 in time and deliberately filed return at the fag end of limitation, and therefore cannot take advantage of its own default. Applying the maxims nullus commodum capere potest de injuria sua propria and jus ex injuria non oritur, ITAT upheld the validity of reassessment.
On merits, ITAT concurred with AO and CIT(A) that the recipient entity denied rendering any services, was a shell concern, and the payment represented bogus expenditure routed through banking channels, rightly taxable u/s 68. Argument that the expenditure pertained to earlier year was also rejected.
Accordingly, ITAT upheld reassessment and confirmed addition of ₹9.41 lakh, dismissing the assessee’s appeal in entirety.
Key takeaway: An assessee cannot sabotage reassessment by late filing of return and then plead technical lapses. Bogus commission paid to shell entities is taxable u/s 68, and procedural defences fail when default is self-created
FULL TEXT OF THE ORDER OF ITAT DELHI
