Krishna Gyanodaya Flour Mills Private Limited Vs ACIT (ITAT Kolkata)
Borrowed Satisfaction, No Speaking Order & Beyond 4 Years—Kolkata ITAT Quashes ₹50 Cr Reopening as Void Ab Initio
Kolkata ITAT ‘D’ Bench in Shree Krishna Gyanodaya Flour Mills Pvt. Ltd. Vs. ACIT, Central Circle-4(3), Kolkata [ITA No. 2179/KOL/2025, AY 2011-12, order dated 31.12.2025] allowed Assessee’s appeal and quashed reassessment proceedings initiated u/s 147/148, holding the entire exercise to be without jurisdiction. Original assessment was completed u/s 153A r.w.s. 143(3) on 27.03.2014 at Nil income. Thereafter, AO reopened assessment on 30.03.2018—beyond four years from end of relevant AY—and made addition of ₹50 crore u/s 68 alleging accommodation entry from M/s Pahargoomiah Exports Ltd.
Tribunal held that reopening after four years could be sustained only if escapement of income was attributable to failure of Assessee to disclose fully & truly all material facts, as mandated by proviso to s.147. However, reasons recorded did not allege any such failure. Tribunal further noted that reopening was based purely on borrowed satisfaction from Investigation Wing, without any independent enquiry or live nexus between information received and formation of belief, violating settled law laid down in Kelvinator of India (SC), Meenakshi Overseas (Del HC) and Shodiman Investments (Bom HC).
Additionally, Tribunal found that objections filed by Assessee against reopening were disposed of in a cryptic, non-speaking manner, contrary to mandatory procedure laid down in GKN Driveshafts (SC). AO merely stated that sanction u/s 151 was obtained, without dealing with objections on limitation, proviso to s.147 or borrowed satisfaction. Tribunal also noted non-compliance with CBDT SOP dated 10.01.2018 on recording reasons for reopening beyond four years.
Holding that jurisdictional pre-conditions for reopening were not satisfied, Tribunal quashed notice u/s 148 and consequential assessment. Issues on merits were left open. Appeal was allowed on legal ground.
FULL TEXT OF THE ORDER OF ITAT KOLKATA
