2024 (10) TMI 1285 - HC - Income Tax

Validity of assessment proceedings initiated u/s 147 - as per CIT(A) no income had been brought to tax on the grounds set out in the notice issued u/s 148 - HELD THAT - Undisputedly, the controversy involved in the present case whether any addition can be made by the AO pursuant to initiation of re-assessment proceedings, notwithstanding that no addition is made on the grounds on the basis of which the assessment was reopened is covered by an earlier decision of this Court in Ranbaxy Laboratories Ltd. 2011 (6) TMI 4 - DELHI HIGH COURT . The said issue was also considered by this Court in the recent decision of ATS Infrastructure 2024 (7) TMI 1441 - DELHI HIGH COURT - It is not disputed that the questions of law, as projected, are covered in favour of the assessee.

Issues:
1. Condonation of delay in filing and re-filing the appeal.
2. Interpretation of Section 260A of the Income Tax Act, 1961.
3. Assessment of income chargeable to tax for AY 2012-13.
4. Validity of re-assessment proceedings under Section 147 of the Act.
5. Addition of income by the AO in re-assessment proceedings.

Analysis:
1. The judgment addresses applications for condonation of delay in filing and re-filing the appeal, which were both allowed. The delay was condoned based on the reasons stated in the applications, leading to the disposal of both applications.
2. The appeal under Section 260A of the Income Tax Act, 1961 was filed by the Revenue against an order passed by the Income Tax Appellate Tribunal (ITAT) regarding an assessment for AY 2012-13. The controversy centered around the assessment framed in the re-assessment proceedings initiated under Section 147 of the Act.
3. The Assessing Officer (AO) initiated re-assessment proceedings based on discrepancies between the turnover disclosed by the assessee and the receipts in its bank accounts. The AO concluded that a portion of the credit entries remained unexplained, leading to an assessment of the assessee's income chargeable to tax at a specific amount.
4. The assessee appealed against the assessment order before the Commissioner of Income Tax (Appeals) (CIT(A)), which was allowed on the grounds that no income had been brought to tax based on the reasons for re-opening the assessment. The CIT(A) held that if no addition was made on the stated grounds, no further addition could be made.
5. The Revenue, aggrieved by the CIT(A)'s decision, appealed before the ITAT. The ITAT dismissed the Revenue's appeal, upholding the decision of the CIT(A). The Revenue then projected questions for consideration by the High Court, which were found to be covered by previous decisions in favor of the assessee.
6. The High Court noted that the issue in the present case had already been addressed in earlier decisions, such as Ranbaxy Laboratories Ltd. v. Commissioner of Income Tax and ATS Infrastructure v. Assistant Commissioner of Income Tax, where it was held that no addition could be made by the AO in re-assessment proceedings if no addition was made on the grounds for re-opening the assessment.
7. Consequently, the High Court found no substantial questions of law to consider in the appeal and dismissed the same based on the precedents and the lack of new legal issues raised.

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