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May 2025

Reassessment—Scope of jurisdiction of AO— Notice — Reasons recorded — Grounds must be recorded before issue of notice — AO is not entitled to record additional reasons thereafter —Re-assessment based on other grounds recorded after issue of notice not valid — Order and notice quashed: Re-assessment — Applicability of Explanation 3 to section 147 — Explanation applied only where power to re-assess validly invoked:

By Keshav Bhujle | Ritu Punjabi, Advocates
Reading Time 4 mins

10. ATS Infrastructure Ltd. vs. ACIT:

[2025] 473 ITR 595 (Del.):

A. Ys. 2014-15 to 2016-17: Date of order 18th July, 2024:

Ss.147, 148, 148A(b) and 148A(d) of ITA 1961:

Reassessment—Scope of jurisdiction of AO— Notice — Reasons recorded — Grounds must be recorded before issue of notice — AO is not entitled to record additional reasons thereafter —Re-assessment based on other grounds recorded after issue of notice not valid — Order and notice quashed:

Re-assessment — Applicability of Explanation 3 to section 147 — Explanation applied only where power to re-assess validly invoked:

Notice u/s. 148A(b) was issued on the ground that the assessee had received loan from its 100% subsidiary. In response to the notice, the assessee submitted that the assessee had not received any loan from its subsidiary but on the contrary it had repaid the loan. The Assessing Officer, vide order dated 23rd July, 2022 passed u/s. 148A(d) of the Act accepted the explanation of the assessee. However, he alleged that the assessee had not been able to completely explain the source of the money which was used to repa

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