Validity of Notice u/s 148: ITAT Quashes Reassessment for Lack of New Evidence

The present appeal has been filed by Rupa Infotech and Infrastructure Pvt. Ltd. (Assessee) against the Dy. Commissioner of Income Tax, Circle (Respondent) in the Income Tax Appellate Tribunal (ITAT) Bench “D”, Mumbai. The appeal is filed against the order dated July 11, 2025, passed by the CIT(A).

The assessee is a private limited company involved in construction and property development. For the relevant year, it filed its income tax return on September 29, 2012, declaring a total income of Rs. 19,339,494. After examining the return, the Income Tax Department completed the assessment on May 23, 2015, under section 143(3) of the Income Tax Act and slightly increased the assessed income to Rs. 19,662,711. Later on, the tax department decided to reopen the completed assessment and issued a notice under section 147 on March 28, 2019, after recording the reasons for reopening the case.

The assessee raised objections challenging the reopening of the assessment. These objections were considered and disposed of by the AO through an order dated November 9, 2019.

AO further submitted that there is nothing on record to show that the assessee has not complied with the basic requirement of having 52 units. However, the assessee submitted all details with regard to the eligibility of deduction under section 80IA(4)(iii) of the Act. Being aggrieved by the order of the AO, the assessee filed an appeal before the CIT(A).

Before CIT(A), the assessee challenged the reopening of the assessment to be bad in law by stating that it was based on a change of opinion on the reappraisal of pre-existing material on record. However, CIT(A) dismissed the legal issue and did not accept the challenge on the reopening of the assessment.

Being aggrieved by the order of CIT(A), the assessee approached the Tribunal. The assessee submitted that Ground No. 2 and 3 raised by the assessee challenge the validity of the notice under section 148 of the Act. He submitted that no new tangible material was available with the AO in order to reopen the present assessment.

After considering all facts of the case, the Tribunal said that, since the tax department reopened the assessment without any new or solid evidence, it deserves to be quashed. As a result, the appeal filed by the assessee is allowed.