TaxTMI 
TaxTMI 
2026 (5) TMI 616
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....022-23 on 22.07.2022 declaring total income of Rs. 8,24,770/-. The return included business and interest income, with a tax liability of Rs. 80,552/- and TDS of Rs. 7,15,391/-, resulting in a claimed refund of Rs. 6,34,840/-. Upon processing under Section 143(1), the Centralized Processing Center (hereinafter referred as CPC), vide intimation dated 05.12.2022, restricted the TDS credit to Rs. 2,83,663/- citing mismatch with Form 26AS, without providing adequate opportunity or basis for such adjustment. 2.1 Aggrieved, the Petitioner filed a rectification application under Section 154 explaining that the entire interest income of Rs. 73,94,574/- was duly recorded in the books of M/s Ranka Dyeing Mills, corresponding interest expenditure of Rs. 74,83,321/- was accounted for, and only the net figure was reflected under business income. Additionally Rs. 6,47,842/- was disclosed under "Income from Other Sources." However, the CPC rejected the rectification application on 04.10.2024. 2.2 The petitioner then preferred an appeal before the Commissioner of Income Tax (Appeals) on 07.11.2024. Vide order dated 04.12.2025 passed under Section 250, the appellate authority allowed the appea....
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....sdiction legally unsustainable. 3.2 Learned counsel further submits that the impugned notice is nothing but a clear case of impermissible "change of opinion" on identical facts and material that stood thoroughly examined and decided in favour of the Petitioner by the Commissioner (Appeals) vide order dated 04.12.2025. The Assessing Officer has sought to reopen a concluded issue without any fresh tangible material, which amounts to a review in the guise of reassessment-an action not contemplated under the scheme of the Act. It is well settled that reassessment proceedings cannot be initiated to re appreciate or revisit the same material merely because a different view is sought to be taken. 3.3 Lastly, it is contended by learned counsel for the petitioner that the impugned proceedings are vitiated by borrowed satisfaction and gross non-application of mind, as the Assessing Officer has mechanically relied on system-generated data without conducting any independent inquiry or appreciating the detailed reconciliation already accepted in earlier proceedings. The reopening, based on superficial comparison of figures in Form 26AS, ignores settled principles that taxation must be bas....
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....isk e-Verification', the scheme notified under Section 135A by the Hon'ble CBDT vide Notification No. 137/2021/F. No. 370142/57/2021TPL (Part-1) dated 13.12.2021 notifying the e-Verification Scheme, 2021. 2. Vide aforementioned Notification, the Central Government has notified the e-Verification Scheme, 2021 in accordance with the provisions of Section 135A of the Income tax Act, 1961. Accordingly, High Risk Cases related to Assessment Year 2022-23 have been verified by the Prescribed Authority under the scheme and submitted a Preliminary Verification Report (PVR) estimating the Income Escapement. As per Clause 4(9) of the e-Verification Scheme-2021, matched the Preliminary Verification Report with the latest Income Tax Return to prepare the Final Verification Report (FVR) wherein Value at Risk (VaR) has been arrived. Which is mentioned as under:- 3. In the instant case notices u/s 133(6) were issued to verify the interest from deposits at Rs.71,99,135/ and the interest from savings bank at Rs. 73/-. In response to the notice issued assessee has filed its submission and stated that "It Has Already Been Considered While Filing the Return. ....
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....f the above facts and circumstances there is information within the meaning of Clause (iv) of sub section (3) of section 148 of the I.T. Act, 1961 which suggest that income chargeable to tax as discussed above has escaped assessment for Assessment Year 2022-23 and accordingly it is fit case for issuance of notice under section 148. Further, in view of section 148A(4) of the I.T. Act proceeding under section 148A are not required. Notice Dated 23.03.2026 1. I have received information under the scheme notified u/s 135A that income chargeable to tax has escaped assessment for the Assessment Year under consideration in your case/the case of the person in respect of which you are assessable under Income-tax Act, 1961. 2. 1, therefore, propose to assess or reassess such income or recompute the loss or the depreciation allowance or any other allowance or deduction for the Assessment Year 2022-23 and I, hereby, require you to furnish, within a period of 90 days in which this notice is issued, a return in the prescribed form for the Assessment Year 2022-23. 3. This notice in being issued after obtaining the prior approval of the specified author....
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.... such TDS was not fully reflected in the return. However, the intimation does not set out any detailed computation or reason as to how the figure of Rs. 2.83.663/- was arrived at. Further, during rectification proceedings under section 154 of the Act, no specific mismatch or unreported income was pointed out by AO, CPC, nor was any material furnished to demonstrate that the interest income subject to TDS was not accounted for in the returned income. The Appellant's repeated rectification applications thus remained unaddressed on merits, which has resulted in the continuation of an adjustment whose basis is not clearly discernible from the record. 5.4. It is a settled position that an adjustment under section 143(1)(a) of the Act must be confined strictly to matters apparent from the return and must be supported by clear and objective data. Likewise, for invoking section 154 of the Act, the error must be apparent from the record. In the present case, the AO, CPC has not demonstrated that there existed any non-disclosure of income relating to TDS which would justify restricting the TDS credit. On the contrary, the financial statements and computation furnished by the App....
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....receding part, even otherwise, the order passed by the CIT(A) is legally and factually well-grounded. The core issue before the CIT(A) was the arbitrary restriction of TDS credit to Rs. 2,83,663/- against the assessee's legitimate claim of Rs. 7,15,391/-, without any computation, reasoning, or identification of a specific mismatch in the intimation issued under Section 143(1). The CIT(A) correctly held that such an adjustment, being a summary proceeding confined strictly to errors apparent from the return, cannot be sustained in the absence of any demonstrable basis. 12.1. On the question of disclosure, the CIT(A) rightly noted that the assessee had not suppressed any income. Interest income of Rs. 73,94,574/- was recorded in the business accounts after netting against interest expenditure, and a further Rs. 6,47,842/- was declared under income from other sources. The totality of interest income was thus offered to tax, albeit across different heads, a fact the AO (CPC) failed to appreciate before mechanically restricting the TDS credit. 12.2. The CIT(A) further correctly held that the assessee's repeated rectification applications under Section 154 were left unaddres....
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....ein that the Assessing Officer must have tangible material to conclude that income has escaped assessment and that mere reexamination of the same facts cannot justify reopening. 18. This principle has also been consistently affirmed by various High Courts. Delhi High Court in CIT v. Eicher Ltd. (2007) 294 ITR 310 (Del) reiterated that where the original assessment was completed after due application of mind to the material on record, issuance of a reassessment notice on the same material is impermissible. Similarly, Gujarat High Court in Praful Chunilal Patel v. M.J. Makwana (1994) 236 ITR 832 (Guj.) held that reopening based on information already available during original assessment proceedings amounts to a change of opinion and is liable to be quashed. Qua the ratio enunciated by both the High Courts, ibid, we need add no more, other than simply observe that we are in respectful agreement with the same. 19. In the present case, the interest income from deposits and the manner of its disclosure in the return were matters already examined, and conclusively adjudicated, by the CIT(A) in its order dated 04.12.2025. No new or fresh material has come to light thereafter. The san....