Classic Transportation Private Limited Vs DCIT (ITAT Delhi)

The Income Tax Appellate Tribunal (ITAT), Delhi, allowed the appeals filed by the assessees against reassessment orders relating to Assessment Years 2012-13 and 2011-12. The reassessments had been initiated to treat share application money of ₹12 crore and ₹1.10 crore received from M/s Concise Exim Private Limited as unexplained cash credits under the Income Tax Act, 1961.

The assessees contended that the reassessment proceedings were invalid because the original assessments had already been completed under Section 143(3), and the notices under Section 148 were issued beyond four years from the end of the relevant assessment years. The Tribunal observed that the Assessing Officer had not recorded any allegation that the assessees had failed to disclose material facts fully and truly, which is a mandatory statutory requirement for reopening assessments beyond the four-year period. Relying on the decision in Hindustan Lever Ltd. v. R.B. Wadkar, the Tribunal held that reopening reasons must stand on their own and cannot be supplemented later.

Accordingly, the ITAT quashed the reassessment proceedings and allowed both appeals, rendering other issues academic.

FULL TEXT OF THE ORDER OF ITAT DELHI

Both these assessees M/s Classic Transportation Private Limited and M/s Dependable Transport Private Limited; have filed their instant as many appeals ITA Nos. 7128 & 7257/Del/2025 against CIT(A)-29, New Delhi’s & CIT(A)/NFAC, Delhi’s twin orders 17^th & 23^rd September, 2025 in case no. 10849/2019-20 & DIN/order No. ITBA/NFAC/S/250/2025-26/1081037574(1) for assessment years A.Y. 2012-13 & 2011-12, involving proceedings u/s 143(3) r.w.s 147 of the Income Tax Act, 1961; hereinafter referred to as ‘the Act’, respectively.

Heard both the parties. Case files perused.

2. We notice at the outset during the course of hearing that the learned departmental authorities had initiated the impugned twin reopenings in the assessee’s respective cases regarding the share application money(ies) mounting to Rs. 12,00,00,000/- and 1,10,00,000/-; respectively coming from M/s Concise Exim Private Limited, which are sought to be treated as unexplained cash credits in the corresponding reassessments as upheld in the lower appellate discussion(s).

3. It is in this factual backdrop that the learned counsel first of all invites our attention to the Assessing Officer’s reopening reasons recorded in the former assessee’s appeal ITA No. 7128/Del/2025 reading as under:

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4. We next find that the learned assessing authority in the latter assessee’s appeal ITA 7257/Del/2025 had recorded almost identical reopening reasons as follows:

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5. It is in this factual backdrop that both these assessees raise their first and foremost identical substantive ground/argument challenging validity of the impugned reopening(s) itself. This is for the precise reason that the learned Assessing Officer; be it in the former or latter assessee’s case, had framed his “regular” assessments on 31.03.2015 (page 80) and 31.03.2013 (page 54 ) in their respective cases u/s 143(3) of the Act. There is further no quarrel that the learned assessing authority had thereafter recorded the impugned reopening reasons and issued section 148 notices to both these assesses beyond this specified period of four years form the end of the relevant assessment year(s). That being the clinching factual position, it is crystal clear the he has nowhere attributed the assessee’s failure in filing the relevant particulars “fully” and “truly” in formal records which has been held as mandatory in Hindustan Lever Ltd vs. R. B. Wadkar, ACIT (2004) 268 ITR 332 (Bom). Their lordship have settled the issue in assessee’s favour and against the department that such a failure indeed vitiates the entire reopening itself since there is no scope of any addition, substitution or deletion in the reopening reasons recorded at a later stage which ought to be read on standalone basis. We thus reject the learned CIT(DR) vehement contention supporting both these re-openings to quash the same in very terms.

6. Mr. Ashwini Kumar next draws our attention to pages 103 to 106 in the latter assessee’s appeal ITA No. 7257/Del/2025 that the learned departmental authorities had framed even a regular assessment in M/s Concise Exim Private Limited cases on 07.03.2024 for the very assessment year A.Y. 2011-12; and, therefore, once the same is considered in light of the supportive evidences, it is very much a genuine entity which could not have been treated as that engaged in providing accommodation entries. We are of the considered view that once we shall quashed the impugned twin reopenings itself, there is hardly much a need for us anymore to delve with the relevant factual matrix at length. All other issues are hereby rendered academic in very terms.

7. These twin assessee’s as many appeals ITA No. 7128 & 7257/Del/2025 are allowed in above terms. A copy of this common order be placed in the respective case files.

Order pronounced in the open court on 22ⁿd April, 2026.