Kedar Ghati Enterprises Vs ITO (ITAT Dehradun)
The Income Tax Appellate Tribunal allowed the assessee’s appeal for AY 2020-21 and quashed the reassessment proceedings, holding that when no addition is ultimately made on the very reasons recorded for reopening, the reassessment cannot be sustained in law.
The case was reopened under sections 148/147 on the basis of information relating to the assessee’s liquor business transactions. However, in the reassessment order dated 10.03.2025, the Assessing Officer merely rejected the books of account and estimated net profit at 2.86%, an action which was upheld by the CIT(A), without making any addition linked to the recorded reasons for reopening.
The Tribunal noted that both lower authorities failed to make any addition on the specific issue which formed the foundation of the reopening. Relying on the settled legal position laid down in Ranbaxy Laboratories Ltd. v. Union of India (Delhi HC) and CIT v. Jet Airways (India) Ltd. (Bombay HC), the ITAT held that such reassessment proceedings are invalid.
Accordingly, the reopening was quashed in entirety, and all other issues on merits were rendered academic. The appeal of the assessee was allowed.
FULL TEXT OF THE ORDER OF ITAT DEHRADUN
This assessee’s appeal for Assessment Year 2020-21 , arises against the CIT(A)/NFAC, Delhi’s DIN & order No. ITBA/NFAC/S/250/2025-26/10787788588(1) dated 22.07 .2025, in proceedings u/s 147 of the Income Tax Act, 1961.
