Dhansamridhi Finance Pvt. Ltd. Vs ACIT (ITAT Delhi)
The ITAT Delhi allowed the assessee’s appeal and quashed reassessment proceedings for AY 2011-12 holding that jurisdictional defects vitiated the entire assessment. The Tribunal noted that notice u/s 148 was issued on 31.03.2018 whereas mandatory approval u/s 151 by the PCIT was granted later on 30.09.2018 (as evident from approval documents reproduced on pages 7-8), making the reopening invalid for want of prior sanction. Further, the Tribunal held that even otherwise the approval was mechanical since the PCIT merely wrote “Yes, Approved” without recording independent satisfaction, amounting to non-application of mind.
Relying on judicial precedents including S. Goyanka Lime & Chemicals Ltd. and Capital Broadways (P) Ltd., the Tribunal held that both defects independently rendered the reassessment void ab initio. Consequently, the assessment framed u/s 143(3) r.w.s 147 was quashed and additions of ₹22.37 crore u/s 68 were not examined on merits, as they became academic.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal is filed by the assessee against the order of NFAC, Delhi dated 20.02.2025 for the Assessment Year 2011-12.
2. The assessee vide letter dated 02.12.2025 filed the following concise grounds of appeal:-
“1. That the Ld. Commissioner of Income Tax (Appeals) (“CIT(A)”) has erred in law and on facts vide impugned appellate order dated 20.02.2025 by upholding the impugned addition of Rs. 22,37,61,000/-under Section 68 of the Income-tax Act, 1961 (hereinafter referred to as “the Act”) vide impugned assessment order dated 11.12.2018 passed under Section 143(3)/147 of said Act.
2. That the impugned appellate order and perverse findings therein qua impugned addition are legally unsustainable for being contrary to applicable (case) law and uncontroverted (additional) evidence filed by appellant in discharge of primary burden under Section 68 of the Act and establishing the identity, genuineness and creditworthiness of M/s. K.S. Nutrition & Foods Pvt Ltd, M/s. Zoom Developers SEZ (Indore) Pvt. Ltd, and M/s. Dreamlife Care Marketing Pvt. Ltd. and M/s. K.S. Developers Pvt. Ltd (hereinafter referred to as “the creditor parties”).
3. That the impugned appellate order is legally unsustainable for perversely confirming the impugned assessment order suffering from the following ex facie jurisdictional errors:
(1) The impugned notice dated 31.03.2018 purportedly issued under Section 148 of the Act was by non-jurisdictional Assessing Officer,
(ii) Mandatory sanction of Ld. Pr. CIT vide Section 151(1) of the Act was obtained only after issue of the impugned notice u/s. 148 of the Act;
(iii) The mandatory sanction/approval of the Ld. Pr. CIT to the purported reasons to believe dated 29.03.2018 was recorded in an ex facie mechanical manner and without application mind.
4. That the impugned appellate order and impugned addition is legally unsustainable for the Respondent’s inaction/failure to discharge the statutory onus under Section 68 of the Act subsequent to the Appellant’s primary discharge of the same by furnishing uncontroverted documentary (additional) evidence, including confirmations, ITR acknowledgements, bank statements et al. qua creditor parties.
5. That the impugned addition is further untenable as mere noncompliance of summons by certain creditors does not ipso facto render loans non-genuine vide CIT v. Orissa Corporation (P.) Ltd. (1986) 159 ITR 78.
6. That the impugned penalty proceedings under Section 271(1)(c) of the Act is legally unsustainable on account of Respondent’s failure to establish any concealment of alleged income by the Appellant vide Anantharam Veerasinghaiah & Co. v. CIT (1980) 123 ITR 457 (SC).
7. That the impugned penalty proceedings under Section 271(1)(c) of the Act and interest u/s. 234 of the Act is ex facie unsustainable in law as the very foundation of such proceedings namely, the impugned assessment order and impugned addition therein are without jurisdiction and contrary to law, facts and evidence filed in support thereof by the Appellant.
8. That the Appellant craves leave to add, delete, modify, or vary the aforementioned Grounds of Appeal at any time during the pendency of appeal or at the time of hearing.”
3. Apart from the above concise grounds of appeal, the assessee also filed an application dated 23.11.2025 for admission of additional grounds of appeal which are as under:
“1. That on facts and in law, the sanction dated 30.09.2018 passed under Section 151 of the Income-tax Act, 1961 (“the Act”) by the Ld. PCIT- 3 is mechanical, unreasoned, and without application of mind, rendering the impugned reassessment proceedings void and liable to be quashed vide Hon’ble Supreme Court in CIT Vs. S. Goyanka Lime and Chemical Pvt. Ltd. (2015) 64 taxmann.com 313 and this Hon’ble Tribunal in Tribhawan v. ITO., ITA No. 872/Del/2025 dated 19.11.2025
2. That the impugned (re)assessment order dated 11.12.2018 passed under Section 143(3) r.w.s 147 of the Act by the Ld. ACIT, Circle 7(2), Delhi is void ab initio as it is based on a notice under Section 148 issued on 31.03.2018 by a non-jurisdictional officer, i.e., ITO Ward-26(3), Delhi vide this Hon’ble Tribunal in Saroj Sangwan v. ITO, 2024 SCC OnLine ITAT 443″
3. That the impugned (re)assessment order dated 11.12.2018 passed by the Respondent is void ab initio as the mandatory approval/sanction was granted on 30.09.2018 under Section 151 of the Act, i.e. subsequent to the issuance of notice under Section 148 of the Act thereby being ex facie contrary to mandate of section 151 of the Act.”
4. Ld. Counsel for the assessee at the outset referring to the additional grounds of appeal, submits that the additional grounds raised are in respect of very jurisdiction of the Assessing Officer in passing the assessment order and since the additional grounds raised are purely legal grounds and go to the very root of the matter, the same may be admitted for adjudication. Reliance was placed on the decisions of the Hon’ble Supreme Court in the case of National Thermal Power Ltd. vs. CIT (229 ITR 383).
