ITAT New Delhi Quashes Reassessment Based On Information Already Available On Record

The Delhi Income Tax Appellate Tribunal (ITAT) on 24 August 2026 held that reassessment proceedings cannot be initiated by presenting information already available on the assessment record as fresh material. Such proceedings are without jurisdiction.

A Bench comprising Accountant Member S. Rifaur Rahman and Judicial Member Sunil Kumar Singh allowed five connected appeals involving Jay Ace Technologies Limited, JNJ Electronics Limited and other companies of the JP Minda Group for Assessment Year 2013-14.

The Tribunal held that the Assessing Officer had relied on material already considered during earlier proceedings under Sections 153A and 263 of the Income Tax Act and deleting the consequential additions. It held:

“We observed that the AO had relied upon the information received from Investigation Wing dated 12.03.2020 and the information contained in the above report from Investigation Wing is the same old information which was the basis of initiation of proceedings u/s 153A and 263 of the Act. Now the same information was rebottled afresh in order to initiate the reassessment proceedings.”

The companies had earlier faced search proceedings, followed by assessments under Section 143(3) read with Section 153A (assessment following a search). The same transactions and material were subsequently examined in proceedings under Section 263 (revision of an assessment order by the Principal Commissioner or Commissioner).

In the lead case of Jay Ace Technologies Limited, the dispute concerned an alleged accommodation-entry transaction. During the earlier Section 263 proceedings, the Principal Commissioner of Income Tax (PCIT) directed an addition of Rs. 96.90 lakh under Section 68 (unexplained cash credits) in relation to a Rs. 95 lakh unsecured loan and Rs. 1.90 lakh in alleged commission. Pursuant to the revision proceedings, the Assessing Officer made the additions, which the Tribunal subsequently deleted after finding the transaction genuine.

Before initiating the reassessment proceedings, the Assessing Officer also issued notices under Section 133(6) to Suhana Marketing Pvt Ltd and Manish Merchants Pvt Ltd, seeking information concerning the transactions. Both companies responded by furnishing confirmations.

The Revenue thereafter sought to reopen the assessment under Section 148. The Assessing Officer relied on an Investigation Wing report dated 12 March 2020, which referred to the statement of Anand Kumar Sharma recorded on 6 February 2014.

The Tribunal found that the statement had already been available to the Department during the earlier proceedings under Sections 153A and 263. The Assessing Officer had therefore relied on material already available on the assessment record without bringing anything new on record. The Bench held:

“AO had heavily relied on the statement recorded from Mr. Anand Kumar Sharma dated 06.02.2014, nothing new was brought on record. In our view, the AO had proceeded to initiate the reassessment proceedings based on the information which was already available on assessment records.”

The Bench further noted that the Assessing Officer had obtained confirmations from Suhana Marketing Pvt Ltd and Manish Merchants Pvt Ltd before initiating the reassessment proceedings. Despite receiving the confirmations, the Assessing Officer proceeded to reopen the assessment on the ground that there was insufficient proof of the genuineness of the transactions.

It observed that “the AO had initiated the proceedings prior to initiation of reassessment proceedings and collected the confirmation from both the parties under consideration and still proceeded to initiate the proceedings as not sufficient proof for genuineness of the transaction.” It also took note of the approval granted under Section 151, which relied on the same statement dated 6 February 2014.

Moreover, the Tribunal held that the Investigation Wing report could not constitute fresh tangible material merely because information already available on the assessment record was subsequently communicated to the Assessing Officer in a different form. It consequently held the reassessment proceedings to be without jurisdiction and deleted the consequential additions.

Since the remaining four appeals involved substantially identical facts and issues, the ITAT applied its findings in Jay Ace Technologies Limited mutatis mutandis and allowed all five appeals.

Counsel for the Assessees: Salil Aggarwal, Senior Advocate; Madhur Aggarwal, Advocate; Shailesh Gupta, CA; Mahir Aggarwal, Advocate; and Uma Shankar, Advocate

Counsel for the Revenue: Vikram Singh Sharma, CIT-DR