Rajesh Kumar Chandwani Vs ITO (ITAT Raipur)
Reassessment Order Set Aside Due to Violation of Natural Justice in Section 148 Proceedings; Confidential Documents Cannot Be Used Without Giving Copies to Taxpayer; Section 148 Reopening Invalid Because Reasons and Supporting Documents Were Withheld; ITAT Raipur Quashes Income Tax Reassessment Over Denial of Fair Opportunity to Respond.
The appeal before the ITAT Raipur arose from the order of the CIT(Appeals)/NFAC dated 04.02.2026 for Assessment Year 2010-11. The primary contention raised by the assessee was that the reasons and information forming the basis for reopening the assessment under Section 148 of the Income Tax Act, 1961 were never supplied to the assessee despite repeated requests.
The assessee argued that the Department alleged cash deposits of Rs. 6,42,195 in the bank account of M/s. Malhotra Electronics Private Limited, New Delhi, based on certain “credible information” and previous enquiries. However, according to the assessee, neither the nature of such information nor copies of the ledger account of M/s. Malhotra Electronics Private Limited were ever shared. The assessee further contended that the details of earlier enquiries relied upon by the Department were also withheld.
During assessment proceedings, the assessee repeatedly requested the Assessing Officer to provide copies of the information and documents received from the Investigation Wing and other authorities in New Delhi. The Assessing Officer declined the request on the ground that the documents were confidential in nature and therefore copies could not be supplied. The Assessing Officer stated that the materials had only been “confronted” to the assessee during proceedings and while recording the assessee’s statement.
