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Judgment
PER SATBEER SINGH GODARA, JM
This Revenue’s appeal ITA No. 3534/Del/2025 and assessee’s cross objection C.O. No. 291/Del/2025, for assessment year 2014-15, arises against the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre [in short, the “CIT(A)/NFAC”], Delhi’s DIN and order no. ITBA/NFAC/S/250/2025-26/1075323938(1), dated 31.03.2025 involving proceedings under section 147 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’).
Heard both the parties. Case file perused.
We advert to the assessee’s cross objection C.O. No.291/Del/2025 since challenging validity of the impugned reopening itself which goes to the root of the matter. There is hardly any dispute that the learned assessing authority had initiated the same vide section 148 notice issued on 08.04.2021 after obtaining approval of the PCIT, Delhi-1 (page 38 in the paper-book).
There is yet another clinching aspect of the impugned reopening we are unable to lose sight of. The learned Assessing Officer had framed a regular assessment in the assessee’s case on 16.11.2016 u/s 143(3) of the Act, assessing income of Rs.1,97,51,607/- in its hands. And that he thereafter recorded his reasons to believe dated 08.04.2021 that its taxable income representing the alleged accommodation entries totaling to Rs.10,85,76,791/-; had escaped assessment attracting the impugned reopening under section 147 Explanation 2(c)(i) of the Act. His reopening reasons duly compiled at pages 49(e) to 40(g) in the assessee’s paper-book. The same nowhere indicates as to whether there was any failure on the assessee’s part in disclosing all the relevant particulars “fully” and “truly” in the above former round.
The Revenue vehemently submits at this stage that the learned lower authorities have taken recourse to the impugned reopening under the new scheme wherein such an explicit recording of reopening reasons; as it was in the old scheme, is nowhere mandatory. We notice that hon’ble jurisdictional high court’s recent decision in [2025] 480 ITR 712 (Del) Springer Healthcare Ltd. Vs. ACIT has settled the very issue in the assessee’s favour and against the department that the aforesaid section 147 1st proviso continues to apply in relation to such a notice to be issued prior to 31st March, 2021 as well, reading as under:
“32.Clause (c) of the proviso to Section 148A of the Act excludes the procedure under Section 148A of the Act where the information available with the AO is contained in the books of accounts, documents or material seized in a search conducted under Section 132 of the Act or requisitioned under Section 132A of the Act on or after 01.04.2021. This clause is not applicable to the facts of the present case.
33.The next question that needs to be examined is whether the impugned notice has been issued beyond the period of limitation as stipulated under Section 149(1) of the Act. The first proviso to Section 149(1) of the Act proscribes the issuance of any notice under Section 148 of the Act for a period prior to 31.03.2021, which could not be issued at that time. This requires us to examine whether the impugned notice could be issued under Section 148 of the Act as it was in force prior to 31.03.2021.
34.There is no allegation that there was a failure on the part of the petitioner to disclose any material fact in its return. Thus, the extended period of limitation of six years for reopening assessment would not be available under Section 147 of the Act as it was in force prior to 31.03.2021. The period of limitation is, thus, limited to four years from the end of the relevant AY 2017-18, and concededly, the impugned notices have been issued beyond this period. Thus, by virtue of the first paroviso of Section 149 of the Act, no notice could have been issued under Section 148 of the Act as no such notice could have been issued on the basis provisions for reassessment that were in force prior to 31.03.2021. This issue is covered in favour of the petitioner by a recent decision of this Court in Ratnagiri Gas and Power Private Limited v. Assistant Commissioner of Income Tax Circle 19(1), Delhi & Ors.: 2025SCC OnLine Del 2904."
35.The petition is accordingly allowed. The impugned notice and further proceedings initiated thereto are set aside.”
That being the case, we find merit in the assessee’s instant first and foremost legal ground challenging validity of reopening on both these counts i.e. for want of a valid approval under section 151 as well as that hit by section 147 1st proviso; in foregoing terms. The impugned reopening is hereby quashed therefore. The assessee succeeds in its cross-objection C.O. No. 291/Del/2025 and the Revenue’s appeal ITA No.3534/Del/2025 fails as the necessary corollary thereof.
This Revenue’s appeal ITA No.3534/Del/2025 is dismissed and assessee’s cross objection C.O. No.291/Del/2025 is allowed in above terms. A copy of this common order be placed in the respective case files.