ITAT Hyderabad Sets Aside Reassessment Based on Incorrect “Non-Filer” Premise

Background and Context

The Hyderabad Bench of the Income Tax Appellate Tribunal, in the case of Ravindra Kumar Gupta Vs ITO, has invalidated a reassessment carried out under Section 147 of the Income Tax Act 1961 on the ground that the very basis for reopening was factually wrong.

The Assessing Officer (AO) had proceeded on the footing that the assessee had not filed a return of income for Assessment Year (AY) 2014-15 and, therefore, treated him as a “non-filer” while recording reasons for reopening under Section 147. However, records clearly demonstrated that the assessee had already filed his return under Section 139 for the relevant year.

This factual mismatch led the Tribunal to hold that the assumption of jurisdiction itself was vitiated due to non-application of mind, rendering the entire reassessment process invalid.

Essential Facts of the Case

Initial Return and Reopening

  • The assessee, Shri Ravindra Kumar Gupta, had filed his return of income for AY 2014-15 under Section 139 on 28.07.2014.
  • Subsequently, the AO issued a notice under Section 148 dated **30.03.2021to reopen the assessment underSection 147`.
  • In response to this notice, the assessee again filed a return on 23.04.2021, declaring total income of Rs. 27,86,730/-.

Additions Made in Reassessment

Pursuant to the reopening, the AO conducted reassessment proceedings and made substantial additions, including:

  • Addition of Rs. 3,86,23,860/- under Section 69A
  • Addition of Rs. 61,30,514/- under Section 69A
  • Addition of Rs. 11,24,800/- under Section 69A
  • Further addition of Rs. 1,45,106/- under Section 69C

The AO completed the reassessment under Section 147 read with Section 144B vide order dated 27.03.2022, determining total income at Rs. 4,88,10,010/-.

Proceedings Before CIT(A) and ITAT

Before the CIT(A)

  • The assessee challenged the reassessment order before the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi (Ld. CIT(A)).
  • The Ld. CIT(A) upheld the reassessment and dismissed the appeal.

Appeal Before ITAT

  • The assessee carried the matter to the Income Tax Appellate Tribunal, Hyderabad, contesting the order of the Ld. CIT(A) dated 07.07.2025 for AY 2014-15.
  • Among various grounds, Ground No. 2 was a purely legal challenge aimed at the validity of the reopening itself, focusing on the legality of the notice issued under Section 148.

Assessee’s Contention

The Learned Authorised Representative (Ld. AR) for the assessee raised a fundamental objection:

  1. Incorrect factual assumption in reasons recorded
    • The assessee drew attention to para 1 of the reassessment order, where the AO reproduced the reasons recorded for issuing notice under Section 148.
    • In the recorded reasons, the AO had clearly mentioned that the assessee was a “non-filer”.