High Court of Delhi · Judgments and reasoned final orders
Principal Commissioner of Income Tax-4, New Delhi v. NTPC Ltd.
ITA 89/2026 ·
Invalidity of reassessment proceedings under Sections 147/148 for AY 2007-08 as a mere 'change of opinion' where the assessee had specifically replied on 24.02.2009 to queries nos. 7 and 8 during scrutiny assessment regarding Oil & Gas exploration expenses (Rs. 7.70 crore) and preliminary expenses (Rs. 9.89 crore).
1. FACTS OF THE CASE
For AY 2007-08, scrutiny assessment was completed and a subsequent notice under Section 148 was issued on 23.03.2012 culminating in a reassessment order dated 28.03.2013 making additions of Rs. 7,70,00,000/- (Oil and Gas Exploration expenses) and Rs. 9,89,12,000/- (preliminary expenses). The CIT(A) on 25.09.2014 and the ITAT on 14.02.2024 annulled the reassessment as based on a mere change of opinion.
2. DISCUSSION BY THE COURT
The Revenue argued that the predecessor AO's order dated 27.02.2009 suffered from legal infirmity and did not explicitly record the queries asked. The Division Bench observed from paragraph 4.2 of the CIT(A)'s order that the assessee had filed a detailed reply dated 24.02.2009 answering Query Nos. 7 and 8 regarding the very issues on which reassessment was later initiated. Had no query been raised by the AO, the assessee would have had no occasion to file that specific reply. Once the AO was satisfied with the assessee's explanation during scrutiny and chose not to make an addition, a successor AO could not initiate reassessment on the same material.
3. JUDICIAL DECISION
Holding that both the CIT(A) and the ITAT were fully justified in annulling the reassessment proceedings, the High Court rejected the Revenue's appeal.
4. OUTCOME
Assessee - Revenue appeal rejected; annulment of Section 147/148 reassessment for AY 2007-08 upheld.
5. AKHB REVIEW POINT
Where an assessee's written reply during original scrutiny assessment specifically answers numbered queries on an expenditure item, the fact that the original assessment order does not reproduce the query or discuss the allowance does not permit a successor AO to reopen the assessment under Section 147.
Source and verification
5-page official High Court of Delhi judgment PDF (DLHC011320362024_1_2026-09-07.pdf, 608,842 bytes).
Original PDF: 5 pages · SHA-256: a2ec48b90979bae8f1c732797b38eb4a669f5e75829d1a3677317d3c49ebf4ed
Supplied source-reviewed note retained; original bytes and identity validation checked in this release. Substantive re-review is not claimed for this record.
Applies Sections 143(3), 147, and 148 of the Income-tax Act, 1961 for AY 2007-08. Income-tax Act, 2025 equivalence is not verified.
Full 5-page primary judgment PDF text read and verified page-by-page. Reaffirms the 'change of opinion' bar under CIT v. Kelvinator of India Ltd. (2010) 320 ITR 561 (SC).
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