Back
2025 Supreme(Online)(ITAT) 5559
INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH)
M. Balaganesh, AM, Mahavir Singh, VP
NEWS BUILDERS AND DEVELOPERS PRIVATE LIMITED DELHI – Appellant
Versus
INCOME TAX OFFICER DELHI – Respondent
ITA No. 1769/Del/2024
For the Appellants/Petitioners:
Reopening of assessment requires substantial evidence; reliance on unsigned documents is insufficient for valid jurisdiction.
Headnote:(A) Income Tax Act, 1961 - Sections 69 and 147 - Reopening of assessment - Authorities must substantiate claims with tangible evidence and cannot rely merely on unsigned documents; assertion of payment lacks sufficient ground unless corroborated. Court found assessment invalid based on preponderance of evidence. Documents deemed having no evidentiary value. (Paras 8, 10, 11)
(B) Assessment Reopening - Jurisdiction must be based on legitimate belief of income escaping assessment, while the use of unsigned documents for substantial claims is not permissible. (Paras 9)
Facts of the case:
Appeal against NFAC's confirmation of addition of unexplained investment of Rs.1,01,00,000/- based on alleged findings from a hard disk without sufficient and direct evidence linking the income to the assessee.
Findings of Court:
The reassessment was invalidated as the primary document was unsigned, and no substantial evidence of cash payment was established against the appellant.
Issues: Was the reopening of the assessment valid based on the evidence presented? Did the AO have sufficient grounds to make the additions?
Ratio Decidendi: The Court ruled that reopening assessments requires credible, substantive evidence; resorting to unsigned documents lacks legal standing. The absence of direct evidence rendered the reopening unjustifiable.
Result: Appeal partly allowed.
| Table of Content |
|---|
| 1. the appeal concerns reopening assessments and evidentiary standards. (Para 1 , 4 , 5) |
| 2. the legitimacy of reliance on unsigned documents for tax reassessment is questioned. (Para 2 , 7 , 8) |
| 3. the court affirms that reopening requires substantive, corroborative evidence. (Para 9 , 10) |
| 4. final determination on assessment outcome based on evidentiary evaluation. (Para 11 , 12) |
ORDER
PER M. BALAGANESH, AM
1. The appeal in ITA No.1769/Del/2024 for AY 2009-10, arises out of the order of the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as „ld. NFAC‟, in short] in Appeal No. ITBA/NFAC/S/250/2023- 24/1061128269(1) dated 19.02.2024 against the order of assessment passed u/s 147 of the Income-tax Act, 1961 (hereinafter referred to as „the Act‟) dated 26.12.2016 by the Assessing Officer, ITO, Ward-18(2), New Delhi (hereinafter referred to as „ld. AO‟).
-
2. The assessee has raised the following grounds of appeal:-
“1. That, on the facts and the circumstances of the case and in law and material available on record, the action of the Ld. CIT(Appeal) is arbitrary, without application of mind and gross violation of the principle of natural justice and on the basis of borrowed satisfaction.
2. That in view of facts and in circumstance of the case and in law, the Ld. CIT (Appeal) is grossly erred and is not dealing with the material and evidence placed on the record.
3. That, on the facts and circumstance of the case and in law, the Ld CIT(Appeal) erred in confirming the addition of Rs. 1,01,00,000/- under section 69 of IT Act, 1961 for unexplained investment.
4. The action of the Ld. CIT (Appeal) for not considering the actual sale deed (purchase deed for the appellant) dated 25-06-2010 is wrong and bad in law.
5. The assessee reserves the right to add, to amend or to alter the ground of appeal at any time during.”
3. The assessee has raised the following additional grounds of appeal:-]
“a. On the facts and circumstances of the case and in law, Ld. CITA) has erred in confirming the actions of the Assessing Officer (AO) in reopening assessment under Section 147 of the Income Tax Act 1951 (the Act) merely on the basis of suspicion, surmises and conjecture. The notice issued under Section 148 of the Act and the assessment order passed pursuant to the said notice is illegal, bad in law, without jurisdiction, and without dealing with the material and evidence placed on record
b. On the facts and circumstances of the case and in law, Ld. CITA) has erred in confirming the addition of Rs. 1,01,00,000/- under Section 69 of the Act made by the Assessing Officer on presumption, surmises and conjecture
c. That the CIT(A) has erred in confirming the action of the AD, in absence of any justification or reasoning forthcoming in the impugned CIT(A) order Reassessment order of said addition amounting to Rs. 1,01,00,000/-being made for AY 2009-10.
-
4. Out of the aforesaid additional grounds, we find that Additional Ground No. (a) is purely legal in nature and goes to the root of the matter. The facts relevant for its adjudication are already on record. Hence, the same is hereby admitted and taken up for adjudication. The other two additional grounds are already part of the original grounds raised by the assessee.
5. We have heard the rival submissions and perused the material available on record. The assessee company filed its return of income for AY 2009-10 on 27.09.2009 declaring loss of Rs. 26,800/-, which was duly processed u/s 143(1) of the Act on 31.03.2011. The case of the assessee was sought to be reopened vide issuance of notice u/s 148 of the Act dated 30.03.2016 after recording the reasons for reopening the assessment. The ld AO in the reasons recorded observed that information was received vide letter dated 21.03.2016 from the ld ACIT, Central Circle-26, New Delhi that during the course of search action dated 11.09.2013 in AKN Group of cases, a hard disk was found at the residential premises of Shri Naresh Gupta,
