Thirumalai Marketing & Invetments Limited Vs ACIT (ITAT Mumbai)
Fresh Investigation-Wing Information Cannot Substitute Failure of Disclosure: Mumbai ITAT Quashes Reassessment Beyond Four Years
The assessee, an NBFC engaged in money lending and investments, originally declared income of ₹2.37 crore. After detailed scrutiny, the assessment was completed under Section 143(3) accepting the returned income. The AO subsequently reopened the assessment on 31 March 2021, beyond four years from the end of AY 2014-15, based on Investigation Wing/Insight Portal information regarding alleged accommodation entries and fictitious share losses. Various additions exceeding ₹3 crore were consequently made.
The Mumbai ITAT held that, for reopening a scrutiny assessment beyond four years under the erstwhile first proviso to Section 147, the AO must specifically establish that income escaped assessment because of the assessee’s failure to disclose fully and truly all material facts.
Although the recorded reasons reproduced the statutory expression regarding failure of disclosure, they did not identify:
- the particular material fact allegedly withheld;
- how the assessee failed to disclose it; or
- the nexus between such failure and the alleged escapement of income.
The Tribunal emphasised that subsequent information may constitute tangible material suggesting escapement of income, but it cannot by itself prove failure of disclosure. These are separate jurisdictional requirements. The relevant transactions had also been disclosed and supported by documents during the original scrutiny proceedings. A later change in the Revenue’s understanding or characterisation of disclosed transactions cannot be converted into an assessee’s failure to disclose material facts.
Accordingly, the ITAT held that the additional jurisdictional condition under the first proviso to Section 147 was not satisfied and quashed the entire reassessment proceedings. All additions on merits consequently became academic and were left unadjudicated.
List of Cases Discussed / Relied Upon
- National Thermal Power Co. Ltd. v. CIT (1998) 229 ITR 383 (SC)
- Jute Corporation of India Ltd. v. CIT (1991) 187 ITR 688 (SC)
- Ganga Saran & Sons (P.) Ltd. v. ITO, 131 ITR 1 (SC)
- CIT v. Kelvinator of India Ltd., 320 ITR 561 (SC)
- Hindustan Lever Ltd. v. R.B. Wadkar, 268 ITR 332 (Bom.)
- Ananta Landmark Pvt. Ltd. v. DCIT, 439 ITR 168 (Bom.)
FULL TEXT OF THE ORDER OF ITAT MUMBAI
Present appeal filed by assessee arises out of the order passed by Learned Commissioner of Income-tax, Appeal – 48, Mumbai [hereinafter referred to as “Ld.CIT(A)”] dated 31/2/2025, for A.Y. 2014-15, on the following ground/s of appeal:-
“1. In the facts and circumstances of the case and in law, the learned Commissioner of Income Tax (A)-48, Mumbai has erred in confirming the action of Ld. Assessing Officer in reopening of assessment which was initiated merely on the basis of information received from the Investigation Wing without independent application of mind by the learned Assessing Officer.
2. In the facts and circumstances of the case and in law, the learned Commissioner of Income Tax (A)-48, Mumbai has erred in confirming the additions made by the Assessing Officer on the basis of alleged information from the Investigation Wing without providing the appellant an opportunity to cross-examine the persons whose statements or reports were relied upon.
3. In the facts and circumstances of the case and in law, the learned Commissioner of Income Tax (A)-48, Mumbai has failed to appreciate that the assessment for the relevant year had already been completed under section 143(3) and the reopening is merely on a change of opinion, which is impermissible in law.
4. In the facts and circumstances of the case and in law, the learned Commissioner of Income Tax (A)-48, Mumbai has erred in confirming the action of Ld. Assessing Officer in making addition of Rs. 50,00,000/- by treating sale consideration received from Decent Vincom Pvt. Ltd as unexplained cash receipts under section 68 of Income Tax Act, without properly appreciating the facts and explanations placed on record.
5. In the facts and circumstances of the case and in law, the learned Commissioner of Income Tax (A)-48, Mumbai has erred in confirming the action of Ld. Assessing Officer in disallowing loss and making addition of Rs.1,31,36,591/- by treating the business loss from sale of VMS Industries Ltd as bogus without properly appreciating the facts and explanations placed on record.
6. In the facts and circumstances of the case and in law, the learned Commissioner of Income Tax (A)-48, Mumbai has erred in confirming addition in respect of commission of Rs. 2,27,277/- estimated at 2 per cent of Rs.1,13,63,850/- as unexplained income.
7. In the facts and circumstances of the case and in law, the learned Commissioner of Income Tax (A)-48, Mumbai has erred in confirming the action of Ld. Assessing Officer in disallowing purchase transaction of Rs. 48,41,603/- of Nyssa Corporation Ltd. without properly appreciating the facts and explanations placed on record.
8. In the facts and circumstances of the case and in law, the learned Commissioner of Income Tax (A)-48, Mumbai has erred in confirming the action of Ld. Assessing Officer in making addition of Rs. 1,00,70,461/- by treating sale consideration from sale of shares of Steel Exchange Ltd as bogus under section 68 of Income Tax Act without properly appreciating the facts and explanations placed on record.
9. In the facts and circumstances of the case and in law, the learned Commissioner of Income Tax (A)-48, Mumbai has erred in confirming addition in respect of commission of Rs. 3,92,041/- estimated at 2 per cent of Rs.1,96,02,058/-.
10. Without prejudice to the above grounds, in the facts and circumstances of the case and in law, the learned Commissioner of Income Tax (A)-48, Mumbai has erred in confirming the addition relating to VMS Industries Ltd. at Rs.1,31,36,591/- without appreciating that even as per the show cause notice and reasons recorded the alleged amount was Rs. 1,13,63,850/-, resulting in an erroneous computation.
11. In the facts and circumstances of the case and in law, the learned Commissioner of Income Tax (A)-48, Mumbai has erred in upholding the Assessment Proceedings initiated without a valid sanction since the approval by the sanctioning authority is unsigned and hence not valid under the eyes of law.
12. In the facts and circumstances of the case and in law, the learned Commissioner of Income Tax (A)-48, Mumbai has erred in upholding the action of Ld. Assessing Officer in issuing of notice under section 148 dated 31.03.2021 in violation of provisions contained in section 151A as held by Hon’ble Jurisdictional Bombay High Court in case of Hexaware Technologies Limited vs. ACIT [WP 1778/2023; order dated 03.05.2024].
13. The appellant craves leave to add, alter, delete or modify all or any of the above grounds of appeal. All the above grounds are without prejudice to each other.”
2. At the outset, we find that there is a delay of 25 days in filing the present appeal before the Tribunal. The assessee has filed an application dated 21/03/2026 seeking condonation of delay, duly supported by an affidavit of Shri Priyank Shah, Managing Director of the assessee-company. It has been submitted that the order u/s.250 of the Act dated 31/12/2025 was uploaded on the e-filing portal and no physical copy thereof was served upon the assessee. Though the order was communicated through email, the same remained unnoticed and, subsequently, when the status of the appellate proceedings was checked on the e-filing portal in March 2026, the assessee came to know of the order. It has accordingly been submitted that the delay was neither wilful nor deliberate, but occurred due to bona fide reasons. The aforesaid explanation has also been affirmed on oath by the Managing Director of the assessee-company.
2.1. We have considered the submissions of the assessee and perused the material placed on record. The Hon’ble Supreme Court in Collector, Land Acquisition, Anantnag & Anr. v. Mst. Katiji & Ors. (1987) 167 ITR 471 held that, a liberal and justice-oriented approach should be adopted while considering an application for condonation of delay, with substantial justice being preferred over technical considerations. In the present case, considering the short delay of 25 days, the explanation furnished by the assessee and the affidavit filed in support thereof, we are satisfied that the assessee was prevented by a reasonable and bona fide cause from filing the appeal within the prescribed period of limitation. Accordingly, in the interest of substantial justice, we condone the delay of 25 days and admit the appeal for adjudication on merits.
3. Assessee has raised an additional ground vide application dated 30/07/2026 challenging the validity of the reassessment proceedings on the ground that the same were initiated in violation of the first proviso to Section 147 of the Act. The additional ground reads as under:
“In the facts and circumstances of the case and in law, the Ld. Commissioner of Income-Tax (Appeals) has erred in upholding the action of the Ld. Assessing Officer who erred in initiating the reassessment proceedings in utter violation of the first proviso to Section 147 of the Act.”
3.1. We have considered the application filed by the assessee for admission of the additional ground. We find that the additional ground raises a purely legal and jurisdictional issue concerning the validity of the reassessment proceedings. The determination of the said issue does not require investigation into any fresh facts, as the relevant facts are already borne out from the assessment record. Further, the assessee had also raised a specific ground in the original grounds of appeal contending that the assessment for the relevant year had already been completed u/s 143(3) and that the reopening was impermissible in law.
3.2. The Hon’ble Supreme Court in the case of National Thermal Power Co. Ltd. v. CIT reported in (1998) 229 ITR 383 has held that the Tribunal has jurisdiction to examine a question of law arising from the facts which are already on record, even if such question was not raised before the lower authorities. The Hon’ble Supreme Court observed that there is no reason why a question of law arising from the facts which are on record should not be allowed to be raised before the Tribunal for the first time. Further, in Jute Corporation of India Ltd. v. CIT reported in (1991) 187 ITR 688, the Hon’ble Supreme Court held that the appellate authority has jurisdiction to permit an additional ground to be raised before it, provided the ground is bona fide and its consideration is necessary for determining the correct tax liability.
3.3. In the present case, the additional ground goes to the very assumption of jurisdiction by the Ld.AO to reopen the assessment and, therefore, goes to the root of the matter. The issue raised is a pure question of law and its adjudication can be undertaken on the basis of the facts already available on record. No fresh investigation of facts is required for the purpose of admitting the ground.
3.4. In view of the above, respectfully following the ratio laid down by the Hon’ble Supreme Court in National Thermal Power Co. Ltd. v. CIT (supra), we admit the additional ground of appeal raised by the assessee for adjudication on merits.
4. Brief facts of the case are as under:-
The assessee is a Non-Banking Financial Company (NBFC) engaged in the business of money lending and investments. For the year under consideration, the assessee filed its return of income on 21/11/2014 declaring total income of Rs.2,36,96,026/-. The return was initially processed u/s.143(1) and thereafter scrutiny proceedings were undertaken. Notice u/s.143(2) was issued on 31/08/2015 and notices u/s.142(1) were issued on 19/05/2016 and 13/12/2016. Upon consideration of the details furnished by the assessee from time to time, the assessment was completed u/s.143(3) on 23/12/2016, accepting the returned income without making any addition.
4.1. Subsequently, information was received by the Ld.AO through the Insight Portal/Investigation Wing regarding certain alleged suspicious transactions pertaining to FY 2013-14. On the basis of such information, the assessment was reopened u/s 147 of the Act and notice u/s.148 was issued on 31/03/2021. The reasons recorded for reopening were furnished to the assessee vide letter dated 27/05/2021. In the reasons, the Ld.AO referred to alleged transactions involving Decent Vincom Pvt. Ltd., VMS Industries Ltd. and certain other parties, aggregating to Rs.3,11,17,134/-, and recorded his belief that income chargeable to tax escaped assessment. The reasons further stated that such escapement was on account of failure of the assessee to disclose fully and truly all material facts necessary for the assessment.
4.2. Pursuant to the reassessment proceedings, the Ld.AO passed an order u/s 143(3) r.w.s. 147 dated 30/03/2022, making various additions, inter alia, in respect of the alleged accommodation entry received from Decent Vincom Pvt. Ltd., alleged fictitious loss in VMS Industries Ltd., sale proceeds of Steel Exchange Ltd. and consequential commission.
Aggrieved by the assessment order the assessee preferred an appeal before the Ld. CIT(A).
5. Before the Ld.CIT(A), the assessee inter alia challenged, the validity of reopening u/s 147. The assessee contended that the original assessment had been completed u/s 143(3), after detailed scrutiny and examination of the relevant documents, and that the subsequent reopening was based upon information from the Investigation Wing without establishing any failure on the part of the assessee to disclose fully and truly all material facts. The assessee also contended that the transactions had been duly disclosed and supported by relevant documents during the original assessment proceedings.
5.1. The Ld.CIT(A), however, rejected the challenge to the reopening. The Ld.CIT(A) held that, the information received from the Investigation Wing/Insight Portal constituted tangible material giving the Ld.AO “reason to believe” regarding escapement of income. The Ld.CIT(A) further held that the sufficiency of the reasons could not be challenged so long as there was a live link between the material and the formation of belief, and concluded that the Ld.AO had followed the requisite procedure. Accordingly, the reopening u/s 147 was held to be valid.
Aggrieved by the order of the Ld.CIT(A), the assessee is in appeal before the Tribunal.
6. In addition to the original grounds, the assessee has raised additional ground vide application dated 30/07/2026, challenging the assumption of jurisdiction by the Ld.AO in initiating reassessment proceedings in violation of the first proviso to Section 147 of the Act. Since the additional ground goes to the root of the assumption of jurisdiction by the Ld.AO, the issue requiring adjudication is whether, in the facts of the present case, the notice u/s.148 dated 31/03/2021, issued after expiry of four years from the end of for the year under consideration, could validly be issued when the reasons recorded did not identify any failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment.
6.1. The Ld.AR submitted that the original assessment for the year under consideration admittedly was completed u/s.143(3) on 23/12/2016 after issuance of notices u/s.143(2) and 142(1) and after examination of the details furnished by the assessee. The notice u/s.148 was issued only on 31/03/2021, i.e. beyond four years from the end of the relevant assessment year. Therefore, the case was squarely governed by the first proviso to Section 147.
6.2. The Ld.AR submitted that, first proviso imposes additional jurisdictional condition and that, in such a case, it is incumbent upon the Ld.AO to demonstrate from the reasons recorded that the alleged escapement of income was “by reason of failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment”. The Ld.AR submitted that the reasons recorded merely reproduce the statutory expression and do not identify any particular material fact which was not disclosed by the assessee.
6.3. The Ld.AR drew our attention to the reasons recorded and submitted that the Ld.AO merely referred to information received from the Insight Portal regarding alleged accommodation entries/fictitious losses and thereafter concluded that income had escaped assessment on account of failure of the assessee to disclose fully and truly all material facts. However, according to the Ld.AR, there was no finding in the reasons as to what material fact was not disclosed, when such fact was required to be disclosed, or how such failure resulted in escapement of income.
6.4. The Ld.AR further submitted that the assessee had disclosed the relevant transactions in the course of the original scrutiny assessment and had furnished supporting documents. Therefore, the subsequent receipt of information from the Investigation Wing could not, by itself, establish failure of disclosure on the part of the assessee. Reliance was placed, on the decision of Hon’ble Supreme Court in case of Ganga Saran & Sons (P.) Ltd. v. ITO reported in 131 ITR 1, and CIT v. Kelvinator of India Ltd. reported in 320 ITR 561, and the decisions of the Hon’ble Bombay High Court in case of Hindustan Lever Ltd. v. R.B. Wadkar reported in 268 ITR 332.
6.5. The Ld.DR, on the other hand, supported the orders of the lower authorities and submitted that the reopening was based upon specific information received through the Investigation Wing/Insight Portal concerning suspicious transactions undertaken by the assessee. It was submitted that such information constituted tangible material giving the Ld.AO reason to believe that income escaped assessment. The Ld.DR relied on the reasons recorded and submitted that the Ld.AO recorded his satisfaction that the escapement of income was attributable to failure on the part of the assessee to disclose fully and truly all material facts. The Ld.DR, therefore, submitted that the reopening was valid and that the additional ground raised by the assessee deserved to be rejected.
We have perused the submissions advanced by both sides in light of the record placed before us.
7. We find that the original assessment for the year under consideration was completed u/s 143(3) on 23/12/2016, after issuance of notice u/s.143(2) and notices u/s 142(1), accepting the returned income of Rs.2,36,96,026/-. Thereafter, notice u/s 148 was issued on 31/03/2021. Thus, the notice was issued after expiry of four years from the end of the relevant assessment year, and consequently, the first proviso to Section 147 assumes significance.
7.1. It is submitted that the requirement contained in the first proviso is an additional jurisdictional safeguard. Where an assessment has been completed u/s 143(3) and action is sought to be taken after expiry of four years from the end of the relevant assessment year, it is not sufficient for the Ld.AO merely to form a belief that income has escaped assessment. It must further be established that such escapement of income has occurred by reason of failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment.
7.2. The Hon’ble Supreme Court in Ganga Saran & Sons (P.) Ltd. v. ITO (surpa) has held that the conditions necessary for assuming jurisdiction under the corresponding provision are distinct and that if either of the conditions is not fulfilled, the notice would be without jurisdiction. The Hon’ble Court further held that, the belief of the Ld.AO must be based on reasonable grounds and cannot be arbitrary or irrational.
7.3. Likewise, in CIT v. Kelvinator of India Ltd. (supra) the Hon’ble Supreme Court reiterated that the power of reassessment cannot be exercised as a power of review and that there must be a tangible basis for assuming jurisdiction u/s.147.
8. In the present case, the reasons recorded by the Ld.AO refer to information received from the Insight Portal concerning certain transactions allegedly involving Decent Vincom Pvt. Ltd., VMS Industries Ltd. and other parties. The reasons quantify the alleged transactions and thereafter state that the income of Rs.3,11,17,134/- had escaped assessment “on account of failure of the assessee to disclose full and true material facts”. However, we find that the reasons do not identify which particular material fact was not disclosed by the assessee, nor do they explain how the alleged failure to disclose such material fact resulted in escapement of income.
8.1. In this regard, the fact that the Ld.AO has used the statutory expression regarding failure to disclose fully and truly all material facts cannot, by itself, satisfy the requirement of the first proviso. The jurisdictional condition requires a factual nexus between the alleged failure of disclosure and the escapement of income. A mere recital of the statutory language, without identification of the material fact allegedly not disclosed, would not suffice.
8.2. This position is fortified by the judgment of the Hon’ble Bombay High Court in Hindustan Lever Ltd. v. R.B. Wadkar, (supra), wherein it was held that the reasons recorded must disclose the particular fact or material which was not disclosed by the assessee fully and truly and that the reasons must establish the requisite nexus between such failure and the escapement of income. The Hon’ble Court has also held that the reasons recorded cannot subsequently be supplemented by extraneous material.
8.3. In case of Ananta Landmark Pvt. Ltd. v. DCIT reported in 439 ITR 168, Hon’ble Bombay High Court dealt with the requirement of the first proviso to Section 147 held, that mere statement that income escaped assessment by reason of failure to disclose fully and truly all material facts, without identifying the material fact allegedly not disclosed, would not satisfy the statutory requirement.
8.4. In the present case, the reasons recorded by the Ld.AO admittedly proceed on the basis of information subsequently received by the Department through the Investigation Wing/Insight Portal regarding the nature of certain transactions undertaken by the assessee. We are conscious of the fact that receipt of information subsequent to completion of the original assessment is not, by itself, a bar against assumption of jurisdiction under section 147. Such subsequent information may constitute tangible material enabling the Assessing Officer to form a belief that income chargeable to tax has escaped assessment. However, where the notice under section 148 is issued after expiry of four years from the end of the relevant assessment year and the original assessment was completed under section 143(3), the existence of such tangible material is only one part of the jurisdictional enquiry. The Assessing Officer is required, in addition, to satisfy the condition prescribed in the first proviso to section 147, namely, that the escapement of income was by reason of failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment.
8.5. The subsequent receipt of information, therefore, cannot be treated as proof of, failure of disclosure by the assessee. The two matters are conceptually distinct. The first concerns the source and sufficiency of the material on the basis of which the Assessing Officer forms the belief regarding escapement of income. And the second concerns the conduct of the assessee in the course of the original assessment proceedings and whether there was a failure to disclose fully and truly the primary and material facts necessary for that assessment. The latter requirement has to be independently satisfied where the case falls within the first proviso to section 147.
8.6. In the present case, the reasons recorded do not bridge this distinction. Although the Ld.AO has referred to the information subsequently received and has quantified the transactions which, according to him, resulted in escapement of income, the reasons do not identify any particular primary fact relating to those transactions which was not disclosed by the assessee in the original assessment proceedings. More importantly, there is no factual narration in the recorded reasons explaining what material fact was withheld, how the assessee failed to disclose such fact fully and truly, and how such failure was the proximate cause of the alleged escapement of income. The mere reproduction of the statutory expression that the escapement was “on account of failure of the assessee to disclose fully and truly all material facts” cannot substitute for recording the factual basis on which that jurisdictional condition is said to be satisfied.
8.7. This assumes significance in the peculiar facts of the present case. The original assessment was not an assessment which had remained unattended or was completed merely on the basis of the return of income. The assessment was completed under section 143(3) on 23/12/2016 after issuance of notice under section 143(2) and notices under section 142(1), and after the assessee had furnished details from time to time. The material now relied upon for reopening relates to transactions which, as demonstrated from the material placed before us, were supported by documentary records and were the subject matter of disclosures made during the original assessment proceedings. The assessee has placed on record the notices issued under section 142(1), the submissions furnished pursuant thereto, and documentary material concerning the transactions subsequently questioned by the Ld.AO.
8.8. We are, therefore, not proceeding on the premise that the subsequent information received by the Ld.AO was incapable of constituting tangible material for the purposes of section 147. The point is narrower and jurisdictional. Even assuming that the subsequent information constituted tangible material giving rise to a belief regarding escapement of income, the first proviso requires something further to be demonstrated. There must be a discernible connection between the alleged escapement and a failure on the part of the assessee to disclose fully and truly all material facts necessary for the original assessment. In the absence of identification of such failure in the reasons recorded, the subsequent information cannot, by itself, supply the missing jurisdictional condition.
8.9. In our view, permitting the subsequent information, by itself, to satisfy the requirement of the first proviso would effectively render that proviso otiose in cases where an assessment under section 143(3) is sought to be reopened beyond four years. In every such case, the Revenue could rely on material subsequently coming to its possession to demonstrate escapement of income; but the statute imposes an additional requirement where the reopening is beyond four years, namely, that such escapement must have occurred by reason of the assessee’s failure to make a full and true disclosure of material facts. The existence of new information and the existence of a failure of disclosure are therefore not interchangeable requirements.
8.10. We also find that the reasons recorded have to be examined as they stood at the time of assumption of jurisdiction. The jurisdiction cannot be sustained by subsequently demonstrating, during the appellate proceedings, that some material fact was allegedly not disclosed by the assessee. If the Revenue’s case is that the assessee withheld a material fact in the original assessment proceedings, such fact and its nexus with the alleged escapement ought to have formed part of the reasons recorded themselves. This is particularly so because the validity of the assumption of jurisdiction has to be tested with reference to the statutory conditions existing at the time when the notice under section 148 was issued.
8.11. On the facts before us, the reasons do not identify any such withheld primary fact. On the contrary, the material placed on record indicates that the relevant transactions were disclosed and documentary particulars were furnished during the original scrutiny proceedings. Thus, what subsequently emerged was not, on the face of the recorded reasons, a discovery that the assessee had failed to disclose the primary facts, but rather information received by the Revenue concerning the nature or characterisation of transactions which had already been disclosed. A subsequent change in the Revenue’s understanding of the disclosed transactions, even if founded upon information subsequently received, cannot by itself be converted into a failure of disclosure by the assessee.
8.12. The principle is not that an assessment completed under section 143(3) becomes immune from reassessment merely because four years have elapsed. The statutory scheme does permit reopening beyond four years, but only upon fulfilment of the additional condition expressly incorporated in the first proviso to section 147. The question before us is consequently not whether the Investigation Wing information was relevant or whether it could have persuaded the Ld.AO to form a belief regarding escapement of income. The question is whether the reasons recorded demonstrate the further statutory requirement that such escapement was occasioned by the assessee’s failure to disclose fully and truly all material facts necessary for the original assessment. On this aspect, the reasons are deficient.
8.13. We accordingly hold that the subsequent information received by the Department may explain why the Ld.AO entertained a belief that income had escaped assessment, but it does not explain why the statutory bar contained in the first proviso stood overcome. In the absence of identification of a specific failure of disclosure and the requisite nexus between such failure and the alleged escapement, the additional jurisdictional condition remains unsatisfied.
8.14. In view of the foregoing discussion, we hold that the reasons recorded by the Ld.AO do not demonstrate any specific failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment. The statutory requirement has been stated as a conclusion, without setting out the factual basis for such conclusion. Consequently, the condition prescribed in the first proviso to section 147 has not been satisfied.
8.15. We, therefore, hold that, although the subsequent information received by the Department could constitute material for examining possible escapement of income, such information, in the facts of the present case, could not by itself satisfy the additional jurisdictional requirement imposed by the first proviso to section 147. Since the notice under section 148 dated 31/03/2021 was issued beyond four years from the end of the relevant assessment year and the reasons recorded do not establish the requisite failure of disclosure on the part of the assessee, the assumption of jurisdiction under section 147 is invalid. The reassessment proceedings initiated pursuant thereto are accordingly quashed. The additional ground raised by the assessee is allowed.
Accordingly, the grounds raised by the assessee challenging the additions made on merits have become academic and, therefore, do not call for any adjudication.
In the result, the appeal filed by the assessee is allowed.
Order pronounced in the open court on 21/08/2026.
