No Fresh Reassessment after 4 years when Facts Were Fully Disclosed: ITAT [Read Order]
Tribunal held that the reopening of assessment was based only on the Investigation Wing’s report without any independent application of mind by the AO, making the reassessment proceedings illegal and liable to be quashed
![No Fresh Reassessment after 4 years when Facts Were Fully Disclosed: ITAT [Read Order]](https://images.taxscan.in/h-upload/2026/03/02/2127581-itat-4-yearsjpg.webp "No Fresh Reassessment after 4 years when Facts Were Fully Disclosed: ITAT [Read Order]")
The Income Tax Appellate Tribunal (ITAT) Delhi Bench has dismissed the appeal and allowed the cross objection, ruling that reassessment proceedings initiated beyond four years were legally unsustainable and that additions under Section 69A cannot stand without proof of unexplained money. The matter arose from the case of Rajan Kumar, proprietor of Shipra Engineers &...
The Income Tax Appellate Tribunal (ITAT) Delhi Bench has dismissed the appeal and allowed the cross objection, ruling that reassessment proceedings initiated beyond four years were legally unsustainable and that additions under Section 69A cannot stand without proof of unexplained money.
The matter arose from the case of Rajan Kumar, proprietor of Shipra Engineers & Consultants, for AY 2012–13. The Assessing Officer had reopened the assessment based on an Investigation Wing report and added ₹1.83 crore under Section 69A, alleging accommodation entries, along with a 2% commission.
The assessee argued that the reopening was invalid since the original assessment under Section 143(3) had already concluded in 2015 with full disclosure of material facts. He further contended that Section 69A applies only when unexplained money or valuables are found in possession but not recorded in books, which was not the case here.
Property Transferred Prior toAttachment, Director Not Liable While Company Is in Existence: Madras HCDirects Registration Without NOC [Read Order]The Revenue argued that the NFAC erred in deleting the addition of ₹1.83 crore under Section 69A, contending that the amount represented accommodation entries in the form of non-genuine share premiums routed through entities such as SSJ Foods Ltd. and South Asia Impex Pvt. Ltd.
They maintained that the assessee acted as an entry operator and therefore the entire sum should have been treated as unexplained money, not just the commission element.
The tribunal upheld NFAC's reasoning, stressing that the AO failed to establish ownership of unexplained money and had merely relied on statements under Section 131(1A).
On the cross objection, the Tribunal held that reassessment under Section 147 after four years is permissible only if there is a failure to disclose material facts. Since the assessee had fully disclosed facts during the original assessment, the proviso to Section 147 was not satisfied. The reassessment order was therefore quashed.
The bench of Sudhir Kumar (Judicial Member) and Renu Jauhri (Accountant Member) thereby dismissed the revenue’s appeal and allowed the assessee’s cross objection.
Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
