Reassessment Quashed for Want of Section 143(2) Notice: ITAT Delhi Upholds Mandatory Jurisdiction Requirements in Ravinder Oil Group Search Cases
Background and Overview
The Income Tax Appellate Tribunal, Delhi Bench, pronounced a significant order on 09.09.2026 in a cluster of appeals arising from search proceedings conducted in the Ravinder Oil Group cases. The Tribunal disposed of five appeals — ITA Nos. 3888, 3889, 3890/Del/2025 filed by Shri Sanjeev Kumar Agarwal for Assessment Years 2017-18 to 2019-20, ITA No. 4094/Del/2025 filed by the Revenue for AY 2018-19, and ITA No. 3878/Del/2025 filed by Shri Vijay Kumar Agarwal for AY 2016-17 — all arising from a common order of the CIT(A)-3, Noida dated 15.04.2025.
The central thread running through almost all these appeals was a foundational procedural question: can a reassessment under Section 147 / Section 144 be sustained when the Assessing Officer fails to issue the mandatory notice under Section 143(2) of the Income Tax Act, 1961, despite the assessee having filed a return of income? The Tribunal answered this question unequivocally in the negative and quashed the impugned reassessment orders.
Facts of the Case: Sanjeev Kumar Agarwal — AY 2017-18 (ITA No. 3888/Del/2025)
Search and Reassessment Proceedings
Shri Sanjeev Kumar Agarwal, an individual assessee, originally filed his return of income on 16.12.2017 declaring a total income of ₹15,35,890/-. A search and seizure operation was conducted in the Ravinder Oil Group on 02.06.2022, which extended to the assessee's premises as well. Following centralisation of his case with the DCIT, Central Circle, Ghaziabad, a notice under Section 148 was issued on 27.03.2023 after obtaining the requisite statutory approval.
The Assessing Officer, proceeding on the basis that no return was filed in response to the Section 148 notice, examined digital evidence found during the search — specifically, a laptop containing a ledger account bearing the title "Sanjeev Property" — and concluded that cash payments totalling ₹1,33,90,000/- were made by the assessee towards property acquisitions. After considering the assessee's submissions, the AO treated ₹59,76,070/- as unexplained cash investment in the relevant year, brought it to tax as undisclosed investment under Section 69A, and invoked Section 115BBE to apply the higher rate of tax. The assessed total income was determined at ₹75,11,960/-.
CIT(A) Order
Before the CIT(A), additions were deleted. The appellate authority, while accepting that cash payments towards property acquisitions had been made, granted the benefit of telescoping against income generated from the group entities — specifically M/s Ravinder Oil & Ginning Mills and J.K. Trading Company — and consequently deleted the additions for AY 2017-18 through AY 2019-20 and AY 2022-23 through a consolidated order.
Additional Legal Grounds — Admission by ITAT
Grounds Raised Before the Tribunal
When the matter came up before the ITAT, the assessee filed an application dated 18.06.2026 seeking admission of additional legal grounds. The following additional grounds were raised for AY 2017-18 and AY 2018-19:
**Ground No. 5 (AY 2017-18 and AY 2018-19)😗* The reassessment order framed under Section 147 of the Income-tax Act, 1961 is void ab initio and bad in law, as the mandatory notice under Section 143(2) of the Act was not issued prior to the completion of the reassessment proceedings. The entire reassessment is consequently liable to be quashed.
**Ground No. 6 (AY 2018-19 and AY 2019-20)😗* That the notice issued under Section 148 is bad in law as the alleged properties reflected in the seized "Property" ledger do not belong to the appellant as per the registered purchase deeds / seized property documents. That in absence of ownership or corroborative material linking the appellant with any asset the reopening and consequential addition are bad in law and liable to be quashed / deleted.
**Ground No. 7 (AY 2017-18, AY 2018-19, AY 2019-20)😗* That the Ld. AO has erred in making the addition solely on the basis of alleged third-party digital material, namely "Sanjeev Tally", found from M/s Ravindra Oil and Ginning Mills and not from the premises or books of the assessee, without recording mandatory satisfaction under Explanation 2(iv) to section 148 or establishing any live nexus with the assessee. In absence of the assessee's name in the Panchnama and any independent corroboration, the addition is bad in law and liable to be deleted.
Tribunal's Ruling on Admission
The Revenue's representative opposed the admission of these additional grounds, contending that factual verification from the Assessing Officer was necessary. However, the Tribunal observed that the question of non-issuance of notice under Section 143(2) was verifiable from the assessment order itself — the AO had expressly noted in his order that no return was filed in response to the Section 148 notice, and therefore no notice under Section 143(2) was issued.
Placing reliance on the Supreme Court's ruling in National Thermal Power Co. Ltd. v. CIT [1998] 229 ITR 383 (SC), which permits admission of additional legal grounds that go to the root of the matter and require no fresh factual investigation, the Tribunal admitted the additional grounds for adjudication.