Case Law Details
DCIT Vs Ameeta Mehra (ITAT Delhi)
Reopening Collapses, All Other Additions Fall: ITAT Delhi Dismisses Revenue’s Appeal
The Delhi ITAT “E” Bench, in DCIT v. Ameeta Mehra (ITA No. 3568/Del/2025, AY 2013-14; order dated 29.12.2025), has dismissed the Revenue’s appeal holding that once the very basis of reopening does not survive, no other additions can be sustained.
The assessment was reopened on the sole allegation of unexplained bank credits. While framing reassessment, the AO made multiple additions on diverse issues such as unexplained credits, ESR expenses, horse upkeep, travelling expenses, depreciation on paintings and diminution expenses. The CIT(A) deleted all additions.
Significantly, before the Tribunal, the Revenue did not challenge the deletion of the addition on account of unexplained bank credits, which was the only reason recorded for reopening u/s 147/148A. The Tribunal held that when the foundation for reopening itself is not pressed or does not survive, the AO lacks jurisdiction to make additions on other independent issues.
Relying on binding Delhi High Court precedents (ATS Infrastructure Ltd., Sunlight Tour & Travels (P) Ltd., Jaguar Buildcon (P) Ltd.), the Tribunal reiterated that reassessment cannot be used as a roving or fishing enquiry once the original reason for reopening fails.
Accordingly, the Revenue’s appeal was dismissed in entirety and the relief granted by CIT(A) was upheld.
FULL TEXT OF THE ORDER OF ITAT DELHI
The present appeal is filed by the Revenue against the order of Ld. Commissioner of Income Tax (Appeals)-23, Delhi(‘Ld. CIT(A)’ for short), dated 24/05/2022 for the Assessment Year 2013-14.
2. Brief facts of the case are that, the Assessee filed return of income declaring the taxable income at Rs. 2,71,41,209/-. The case of the Assessee was reopened and a notice u/s 148 of the Act came to be issued on 07/04/2021 which has been subsequently treated as notice issued u/s 148A(b) of the Act as per the Judgment of Hon’ble Supreme Court in the case of Union of India vs. Aashish Agarwal and reported 2022 SCC OnLine SC 543. In compliance with the Judgment of Hon’ble Supreme Court in the case of Union of India Vs. Aashish Agarwal (supra), the copy of the reasons recorded served on the Assessee on 20/05/2022, wherein it was alleged in the reasons recorded that the Assessee had unexplained credit in the bank account amounting to Rs. 12,06,11,836/- which could not be explained by the Assessee before the Investigating Wing with the help of documentary evidences one more reason mentioned in the reasons recording was the current banking account maintained with BNB Paribas Bank.
3. After considering the objection filed by the Assessee, A.O. passed order u/s 148A(d) of the Act on 29/07/2022 recording satisfaction that the credits in the account amounting to Rs. 12,06,11,836/-remained unexplained and thus the same constitute income which has been escaped assessment. An assessment order came to be passed on 31/05/2023 u/s 147 r.w. Section 143(3) of the Act by making following additions:
“a) Addition of Rs. 1,57,65,399/- (out of alleged 12,06,11,866/-) on account of unexplained credit in the bank account
b) Addition of Rs. 43,75,000/- on account of disallowance of ESR expenses,
c) Addition of Rs. 2,56,51,863/- on account of disallowance of expenses claimed on account of unkeep of horses
d) Addition of Rs. 10,56,705/- on account of disallowance to travelling and conveyance expenses
e) Addition of Rs. 2,25,000/- on account of disallowance of depreciation claimed on painting
f) Addition of Rs. 1,58,36,990/- on account of disallowance of expenses claimed on account of ‘Dimunition.”
4. Aggrieved by the assessment order dated 31/05/2023, the Assessee preferred Appeal before t he Ld. CIT(A). The Ld. CIT(A) vide order dated 24/02/2025,allowed the Appeal of the Assessee by deleting all the above mentioned additions made by the A.O. Aggrieved by the order of the Ld. CIT(A) dated 24/02/2025, the Department preferred the present Appeal. However, the Department has not challenged the addition of Rs. 1,57,65,399/- made onaccount of unexplained credit in the bank which was the sole basis for reopening the assessment.
5. The Ld. Assessee’s Representative vehemently submitted that the Ld. CIT(A) deleted the addition of Rs. 1,57,65,399/- made on account of unexplainedcredit in the bank account which was the sole basis for reopening the assessment, as the Department has not challenged the said deletion of the addition, the ground raised against the deletion of other additions made by the A.O. on different issues cannot be sustained before the Tribunal. The Ld. Counsel has relied on plethora of judicial precedents in support of his contention.
6. Per contra, the Ld. Departmental Representative relying on the assessment order, sought for allowing the Appeal of the Revenue.
7. We have heard both the parties and perused the material available on record. As could be seen from the record, the Ld. CIT(A) has deleted all the six additions made by the A.O. The Revenue preferred the present appeal challenging the order of the Ld. CIT(A). However, the addition of Rs. 1,57,65,399/- made on account of unexplained credit in the bank account which was the sole basis for reopening the assessment has not been challenged by the Revenue. Thus, the Revenue has no grievance against the deletion of the said addition by the Ld. CIT(A) which was the sole basis for reopening of the assessment.
8. It is well settled law that when the very foundation of reopening does not survive, no addition can be made in respect of other issues based on such invalid assumption of jurisdiction as held in the following Judgments:-
“a) ATS Infrastructure Ltd. v. Assistant Commissioner of Income-tax [2024] 166 taxmann.com 61 (Delhi) / [2025] 473 ITR 595 (Delhi)[Para 13-14, 25-26, 31]
b) Principal Commissioner of Income-tax v. Sunlight Tour and Travels (P.) Ltd. [2024] 169 com673 (Delhi) [Para 18-19]
c) Pr. CIT, Central v. Jaguar Buildcon (P.) Ltd. [2024] 165 taxmann.com757 (Delhi) [Para 4,5,7].”
9. Considering the above facts and circumstances, we find no merits in the grounds of Appeal of the Revenue, accordingly the Appeal of the Revenue is dismissed.
Order pronounced in the open court on 29th December, 2025
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