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Judgment
PER AMITABH SHUKLA, AM,
This appeal by the assessee is directed against the order of National Faceless Appeal Centre/Ld. Commissioner of Income Tax(Appeals), New Delhi, [hereinafter referred to as ‘ld. CIT(A)] dated 21.10.2025 arising out of assessment order dated 08.01.2024 passed under section 147 r.w.s 144 read with section 144B of the Income Tax Act, 1961, for the Assessment Year 2016-17. The word ‘Act’ herein this order would mean Income Tax Act, 1961.
The assessee has raised following grounds of appeal:-
1.Based on the facts and in the circumstances of the case, the assessment order passed u/s 147 read with 144 is bad in law and appellant denies the income tax demand.
2.Based on the facts and in the circumstances of the case, the Ld. CIT(A) erred in affirming and Ld. AO has erred in issuing the notice u/s 148 of the income tax act as per the provision of section 149(1)(b) without there being any special circumstances of the case, the said proceedings is barred by limitation. The Ld. AO does not have any material which reveals that income chargeable to tax has escaped assessment.
3.Based on the facts and in the circumstances of the case, the Ld. CIT(A) erred in affirming and Ld. AO has erred in passing the order u/s 148A(d) of the income tax act, despite the fact that the property of Rs. 3,00,00,000 has been sold by the appellant, the Ld. AO continue to believe on the wrong information provided on the insight portal that property has been purchased by the appellant.
4.Based on the facts and in the circumstances of the case, the Approval u/s 151 is bad in law and perfunctory, mechanical and automatic approval is provided by the higher authorities.
5.Based on the facts and in the circumstances of the case, the reassessment proceedings is based on suspicion, surmises and conjectures of the Ld. AO. The reassessment procedure is a matter of review and not reassessment.
6.Based on the facts and in the circumstances of the case, the CIT(A) erred in affirming and Ld. AO has erred in adding the whole amount of the property sales proceedings to the total income despite the fact that the appellant has complied with the notice u/s 148 of income tax act.
7.Based on the facts and in the circumstances of the case, the Ld. CIT(A) erred in affirming and Ld. AO has erred in holding that the appellant is mandatory required to file the income tax return for the AY 2016-17, even through the provision for section 139(1) proviso, applicable to the facts to the case applies prospectively from AY 2022-23.”
At the outset, ld. Counsel argued that the order under section 147 dated 08.01.2024 passed in its case is untenable as the same is based upon wrong facts. The ld. Counsel argued that there has been a case of total non-application of mind alluding towards a mechanical reopening based on incorrect facts. The ld. Counsel drew our attention to the column-21 of the reasons recorded under section 151 dated 09.03.2023, wherein, the ld. AO had averred that the assessee had purchased immovable property exceeding Rs.50 lakhs and that the said purchase has escaped assessment. The same position was reiterated by the lower authorities as evident from order under section 148A(d) dated 10.03.2023, wherein, notice u/s 148 was issued to bring to tax an amount of Rs.3 Crores to tax concerning purchase of an immovable property. The ld. Counsel further drew our attention to para-4 of the assessment order dated 08.01.2024, wherein, the ld. AO made an addition on the premise that the assessee had sold immovable property of Rs.3 Crores. The ld. Counsel drew our attention to the judicial precedents governing the matter. Thus, reference was invited to decision of Hon’ble Delhi High Court in the case of Catchy Prop-build Pvt. Ltd., of the Hon’ble Rajasthan High Court in the case of Veer Teja Real Estates Developers Pvt. Ltd. and of this Tribunal in the case of Santosh as in ITA No.2025/Del/2024. The ld. Counsel has placed on records a paper-book evidencing the above incoherent facts. It was accordingly requested that the orders of the lower authorities be quashed and relief allowed.
The ld. DR placed reliance upon the order of the lower authorities. It was argued that the assessee had not represented properly before the ld. AO and that therefore the matter be set-aside to the ld. AO for re-adjudication.
We have heard the rival submissions in the light of material placed on record. The argument of the ld. DR of remitting the matter back to the ld. AO has been considered and not found to be worth any meritorious consideration. We have noted that the notice under section 148 per se is based upon wrong facts. We have also noted that there is total inconsistency of facts recorded u/s 151 vis a vis those available in the assessment order u/s 143(3) of the Act, alluding towards a case of total non-application of mind by the Revenue authorities.
We have noted that the Hon’ble Rajasthan High Court in the case of Veer Teja Real Estates Developers Pvt. Ltd. (supra) has held that notice issued u/s 148 upon wrong facts cannot be treated as a valid notice and cannot be sustained. Hon’ble Delhi High Court in the case of Catchy Prop-build Pvt. Ltd. has held that the foundation allegation raised by the revenue authorities in its show-cause notice u/s 148A(b) of the Act cannot be supplemented. Further, this Tribunal in the case of Santosh as in ITA No.2025/Del/2024 has held that reopening on wrong facts would assume the character of mechanical reopening and cannot be sustained. We have noted from the facts discussed hereinabove that the present case falls in the category of total non-application of mind. Accordingly, we set-aside the order of the Ld. CIT(A) and allow the appeal of the assessee.
In the result, the appeal of the assessee is allowed.