Akriti Financial Private Limited Vs DCIT (ITAT Delhi)
Delhi ITAT Quashes Reassessment Where AO Failed to Make Addition on the Recorded Reason for Reopening
The Delhi ITAT quashed the reassessment proceedings for AYs 2013-14 and 2014-15, holding that the very foundation of the reopening failed since the Assessing Officer did not make any addition on the issue recorded as the “reason to believe.”
The reassessment was initiated on the allegation that the assessee had provided or received fictitious share application money through accommodation entries involving M/s Rakesh Raj & Associates. However, while completing the reassessments, the Assessing Officer did not make any addition in respect of the alleged accommodation entries forming the sole basis for reopening. Instead, additions under section 68 were made on entirely different transactions. This factual position remained undisputed by the Revenue before the Tribunal.
Relying on the decisions of the Delhi High Court in ATS Infrastructure Ltd., Ranbaxy Laboratories Ltd., Jakhotia Plastics (P.) Ltd., the Bombay High Court in Jet Airways (I) Ltd., and the Calcutta High Court in BP Poddar Foundation for Education, the Tribunal held that where no addition is ultimately made on the issue for which the assessment was reopened, the reassessment itself is unsustainable in law. Accordingly, the reassessment proceedings were quashed, rendering all other issues on merits purely academic. The assessee’s appeals were therefore allowed.
Cases Discussed
- ATS Infrastructure Ltd. Vs. ACIT (Delhi HC), (2024) 166 taxman.com 61 (Delhi)
- CIT(E) Vs. BP Poddar Foundations for Education (Calcutta HC), (2023) 148 taxmann.com 125 (Cal)
- PCIT v. Jakhotia Plastics (P.) Ltd. (Delhi HC), (2018) 94 taxmann.com 89 (Delhi)
- Ranbaxy Laboratory CIT (Delhi HC), (2011) 335 ITR 136 (Del)
- CIT Vs. Jet Airways (I) Ltd. (Bombay HC), (2011) 331 ITR 236 (Bom.)
FULL TEXT OF THE ORDER OF ITAT DELHI
These assessee’s twin appeals ITA Nos. 3647 & 3648/De/2026 , for Assessment Years 2013-14 & 2014-15 arise against the Commissioner o f Income Tax(Appeals)-3 (for short, “CIT(A)”), Gurgaon’s as many orders dated 24.03.2026 & 16.03 .2026, passed in order nos. 1025593/NFAC/2012-13 & 10256438/NFAC/2013-14, involving proceedings u/s 147 r.w .s. 144B of the Income Tax Ac t, 1961; hereinafter referred to as, “the Ac t” , respectively. Heard both the parties . Case files perused.
2. The assessee submits at the outset that it seeks to raise/press for its first and foremost legal ground/argument challenging validity of the impugned twin identical re-openings itself. This is for the precise reason that the learned Assessing Officer had set into motion the same after recording his reasons to believe that going by the relevant material detected in the survey action held on 20.08.2019, it was found to have provided fictitious share application money to/from M/s Rakesh Raj and Associates representing accommodation entry(ies) of Rs. 1,43,32,000/- (A.Y. 2013-14) & Rs. 1,78,57,125/- (A.Y. 2014-15); respectively. Mr. Somil Agarwal next takes us to the learned Assessing Officer’s as many assessments; both framed on 26.05.2023 wherein although he has added the corresponding amounts of Rs. 1,66,32,000/- & Rs. 1,75,57,025/- as unexplained cash credits u/s 68 of the Act, the same admittedly do not involve the aforesaid reopening amounts i.e. fictitious shar application money in case of Rakesh Raj and Associates . This clinching factual position has gone unrebutted from the Revenue side when afforded adequate opportunity of being heard today.
3. Faced with this situation, we hereby quote ATS Infrastructure Ltd. Vs. ACIT (2024) 166 taxman.com 61 (Delhi), Ranbaxy Laboratory CIT (2011) 335 ITR 136 (Del), PCIT v. Jakhotia Plastics (P.) Ltd. (2018) 94 taxmann.com 89 (Delhi), CIT Vs. Jet Airways (I) Ltd. (2011) 331 ITR 236 (Bom.) & CIT(E) Vs. BP Poddar Foundations for Education (2023) 148 taxmann.com 125 (Cal) to conclude that once the learned Assessing Officer has nowhere made any addition in all these assessment years in the assessee’s hands qua aforesaid sole identical reason of reopening, the same could not be held as sustainable in eyes of law. Quashed in very terms therefore. All other remaining pleadings between the parties on merits stand rendered academic.
4. These assessee’s twin appeals ITA Nos. 3647 & 3648/De/2026 are allowed in above terms. A copy o f this common order be placed in the respective case files.
Order pronounced in the open court on 28.07.2026.
