Urn: Cw / 15998U / 2026Ashok Kumar Manish ... vs Joint Commissioner Of Income Tax ...
2026 Latest Caselaw 7122 Raj

Rajasthan High Court - Jodhpur

Urn: Cw / 15998U / 2026Ashok Kumar Manish ... vs Joint Commissioner Of Income Tax ... on 1 May, 2026

 [2026:RJ-JD:20594-DB]



       HIGH COURT OF JUDICATURE FOR RAJASTHAN AT
                        JODHPUR
                 D.B. Civil Writ Petition No. 8724/2026
 Ashok Kumar Manish Kumar Huf, Through Its Karta Ashok Kumar
 S/o Shiv Lal Golecha Aged About 61 Years R/o Arihant Colony,
 Ward No. 23, Balotra, Rajasthan - 344022
                                                                        ----Petitioner
                                        Versus
 1.        Joint Commissioner Of Income Tax, Range-3(R), Ju,
           Aayakar Bhawan, Paota C Road, Jodhpur, Rajasthan -
           342010
 2.        Income Tax Officer, Balotra, Shaheed Bhagat Singh
           Circle, Balotra, 344022
 3.        Commissioner Of Income Tax, Appeal Addl/jcit (A)-8,
           Aayakar Bhawan, M.k. Road, Mumbai, 400020
 4.        Central Board Of Direct Taxes, Through Secretary, Cbdt
           Headquarters, North Block (Department Of Revenue),
           New Delhi - 110001
                                                                     ----Respondents


  For Petitioner(s)             :    Mr. Sharad Kothari
                                     Mr. Kalpit Shishodia
                                     Mr. Pranjul Mehta
                                     Mr. Chirag Soni
                                     Mr. Dinesh Kumar Suthar
  For Respondent(s)             :    Mr. Sunil Bhandari

               HON'BLE MR. JUSTICE ARUN MONGA

HON'BLE MR. JUSTICE SANDEEP SHAH Order

Reportable 01/05/2026 Per: Arun Monga, J.

1. Petitioner is before this Court challenging the notice dated

23.03.2026 issued under Section 148 of Income Tax Act, 1961

(Annexure-2), sanction note dated 20.03.2026 and all other

consequential proceedings/actions.

2. Brief facts of the case are that the petitioner, a Hindu

Undivided Family (HUF) acting through its Karta Mr. Ashok Kumar,

resident of Balotra, Rajasthan, filed its return of income for A.Y.

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2022-23 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 appeal, accepted the Petitioner's

reconciliation of interest income, and directed grant of full TDS

credit after verification with Form 26AS, along with consequential

relief. The findings adjudicated the issue of alleged mismatch and

treatment of interest income.

2.3 Notwithstanding, the respondents have issued a fresh notice

dated 23.03.2026 under Section 148 based on a sanction dated

20.03.2026, seeking to reopen the assessment on the ground of

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alleged escapement of income of Rs. 65,51,706/- based on the

same discrepancy flagged earlier on the Insight Portal.

2.4 Hence, the instant writ petition.

3. Mr. Sharad Kothari, learned counsel for the petitioner argues

that the impugned notice dated 23.03.2026 issued under Section

148 of the Income Tax Act, 1961, along with the sanction note

dated 20.03.2026, is ex facie illegal, arbitrary, and mechanical,

having been issued without proper application of mind to the facts

on record. The reopening is founded solely on a system-generated

flag under the "High Risk e-Verification" category on the Insight

Portal, alleging mismatch of interest income, while completely

disregarding that the entire interest income, as reflected in Form

26AS, had already been duly accounted for in the books and

disclosed in the return under the head "Business Income" after

netting off corresponding interest expenditure. It is further

contended that the Respondents failed to furnish the Petitioner

with the foundational material and verification reports relied upon,

thereby causing serious prejudice and violating principles of

natural justice.

3.1 It is further argued by learned counsel for the petitioner that

the impugned action is wholly without jurisdiction as it fails to

satisfy the mandatory requirement of existence of "information"

suggesting escapement of income within the meaning of Section

148. The term "information" necessarily connotes fresh, specific,

and tangible material coming into the possession of the Assessing

Officer subsequent to earlier proceedings. In the present case, the

entire basis of reopening is the very same alleged discrepancy

relating to interest income reflected in Form 26AS, which was

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already on record, duly explained, and conclusively adjudicated by

the appellate authority. No new material or independent input

under the scheme of Section 135A has been brought on record,

rendering the assumption of jurisdiction 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 based on

real income and proper accounting treatment. The repeated

initiation of proceedings on the same grounds, despite a binding

appellate order, constitutes a colourable exercise of power, is

contrary to judicial discipline, and renders the impugned notice

liable to be quashed.

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4. Mr. Sunil Bhandari, learned counsel for the respondents, on

the other hand opposes the petition urging that not only the same

has been filed prematurely without responding to the impugned

notice and but is an attempt to short circuit the statutory scheme

contained under the Income Tax Act.

4.1. He would further strenuously argue that in any case, the

contention that the show cause notice has been issued without

any additional information is belied by the very bare reading of the

sanction note dated 20.03.2026, which would reveal that it is

based on the cogent information which was found to be prima

facie believe worthy upon due application of mind which led the

competent authority to issue the impugned show cause notice.

Any argument to the contrary is thus, untenable and has to be

necessarily rejected by this Court and the writ petition accordingly

deserves to be dismissed at the very threshold.

5. In the aforesaid backdrop, we have heard the rival

contentions of the learned counsels representing the respective

parties and have perused the material available before us. We

shall now proceed to render our opinion qua the same by

recording reasons and discussion thereof in the succeeding part of

the instant order.

6. Before examining the merits of the contentions, it is

necessary to refer to the sanction note dated 20.03.2026, which

sets out the reasons for issuing the impugned notice dated

23.03.2026 under Section 148 of the Income Tax Act, 1961,

proposing reassessment for Assessment Year 2022-23.

7. At this stage, it may be noted that the assessee had filed an

appeal against the original assessment for the said year, which

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was disposed of by the Commissioner of Income Tax (Appeals)

vide order dated 04.12.2025, and that order has since attained

finality.

8. Reverting to the sanction note dated 20.03.2026 and the

notice dated 23.03.2026 issued under Section 148, same are

reproduced below for ready reference :-

"Sanction Note dated 20.03.2026 In this case information has been made available to this office through Insight Portal under the head High Risk 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. 3.1 The reply of the assessee is considered after duly examination of ITR which is placed on record.

3.2 To verify the facts of the case it is seen from the ITR that the assessee has disclosed interest income of Rs. 6,47,842/- (including interest from deposit of Rs. 6,47,429/- and interest from saving bank of Rs. 313/-) during the F.Y.2021-22 offering income under income from other sources. The relevant portion of the ITR is being reproduced as under:

      B4            Income From Other        B4                     6,47,842
                    Source
                    Note-Fill "Sch
                    TDS2" if applicable
      S.No.         Nature of Income         Description (If any    Total Amount
                                             other selected)

1. Interest from Saving Interest from Saving 313 Bank Account

2. Any Other Interest (Others) 6,47,429

3.3 From the above, it can be inferred that the assessee has shown an amount of only Rs.6,47,429/- against Rs. 71,99,135/- on account of

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interest from deposits and a separate amount of Rs. 313/- as interest from savings bank which is more than the amount i.e., Rs. 73 which is subject to verification.

3.4 As the assessee has disclosed interest from savings bank of Rs.

313/- in its ITR for AY 2022-23 which is more than the amount under verification, hence no adverse inference is drawn on the issue. 3.5 Further in absence of any satisfactory explanation from the assessee with regards to the amount under verification on account of interest received from deposits the balance amount of Rs. 65,51,706/- (Rs. 71,99,135/- Rs. 6,47,429/-) cannot be verified. Further, though it is seen that the assessee has shown business receipts of Rs. 29,94,300/- and offered income of Rs. 3,27,245/- under provisions of section 44AD of the Income Tax Act, 1961, no credit of such receipts can be given in the absence of any explanation from the assessee with regards to the nature of business and receipts received by the assessee during the FY 2021-22.

3.6 Having regard to the above, and in view of the absence of satisfactory explanation with regards to the interest from deposits received during the relevant year, there seems to be an escapement of income of Rs. 65,51,706/- on account of interest from deposits in the hands of the assessee and remained unexplained and the same has escaped assessment within the meaning of section 147 of the Act.

4. In view of 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 authority accorded on date 20-MAR-26 vide Reference No. 100000090968176."

9. As already mentioned, after the completion of the original

assessment proceedings, the assessee preferred an appeal before

the Commissioner of Income Tax (Appeals). We find that the

CIT(A), upon due examination of the same material on record, as

noted in the sanction note, ibid, adjudicated the matter on merits.

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No fresh material or new information has since come into the

possession of the Assessing Officer that can possibly justify

reopening the assessment on the ground of alleged escapement of

income. Issuance of the impugned show cause notice in the

present case is, at best, one of a mere change of opinion by an

assessing officer, which does not constitute a valid ground for

reassessment. Let us see how.

10. CIT order be seen at this stage, relevant extract thereof is

reproduced hereinbelow:-

"5. Findings & Decision 5.1. I have carefully considered the grounds of appeal, the material available on record, the rectification order passed under section 154 of the Act, the intimation issued under section 143(1) of the Act, and the submissions tendered by the Appellant. The primary issue for adjudication is whether the AO, CPC was justified in restricting the TDS credit to Rs.2,83,663/- as against the claim of Rs.7,15,391/- made in the return of income, and whether the subsequent rectification applications filed by the Appellant warranted acceptance under section 154 of the Act.

5.2. It is noted from the return and accompanying financials that the Appellant had disclosed substantial interest transactions during the relevant year. Interest income of Rs. 73.94.574/- was recorded in the business accounts after netting off interest expenditure, and a further sum of Rs.6.47,842/- was separately declared as income from other sources. The totality of interest income was thus stated to have been duly offered to tax under the relevant heads. The TDS reflected in Form 26AS/AIS corresponds to such interest receipts. The Appellant's contention is that the gross interest income corresponding to the TDS has in fact been declared in the ITR, albeit partly under business income after netting and partly under income from other sources.

5.3. The intimation issued under section 143(1) of the Act restricted the TDS credit on the ground that the income relating to 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,

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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 Appellant prima facie reflect that the underlying interest income was indeed included in the return, either as business income or income from other sources. The non-consideration of this aspect, despite specific rectification petitions filed by the Appellant, constitutes a mistake apparent from the record.

5.5. It is further observed that Form 26AS fully reflects the Appellant's entitlement to TDS credits claimed in the return. If the AO, CPC considered that any portion of Income corresponding to the TDS was not disclosed, it was incumbent on the AO, CPC to specify the precise mismatch, quantify the undisclosed amount, and provide reasoning. The absence of such disclosure renders the restriction of TDS credit unsustainable. The consistent explanation of the Appellant that the interest income Was duly declared has not been rebutted with any contrary evidence. In the absence of such rebuttal, and in view of the materials available, the restriction of TDS credit appears to have been mechanically applied and not in accordance with law.

5.6. Accordingly, I find that the reduction of TDS credit from Rs.6,34,840/- to Rs.2,83,663/- in the intimation under section 143(1) of the Act is erroneous. The resulting denial of TDS credit to the extent of Rs.3,51,177/- is not supported by reasons or by any demonstrable mismatch in income. The denial of rectification is therefore not in accordance with section 154 of the Act. The Appellant is entitled to the full TDS credit as claimed in the return, subject to verification of matching PAN- based credits in Form 26AS".

11. The contents of the sanction note leading to issuance of the

fresh notice for reassessment, when read in conjunction with and

compared against the order dated 04.12.2025 passed by the

CIT(Appeals), do nothing more than reveal a change of opinion on

the part of the Assessing Officer with respect to facts and

materials that had already been examined and conclusively

adjudicated by a competent appellate authority. The sanction note

raises no fresh ground, discloses no new material, and advances

no tangible information beyond what was already on record before

the CIT(Appeals). It is, therefore, nothing but an attempt to

reopen a concluded matter on the basis of a revisited view of the

same facts, a course of action that is wholly impermissible in law.

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12. Dehors our discussion in the preceding 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

unaddressed on merits, despite being supported by Form 26AS,

financial statements, and detailed computation. The failure of the

AO (CPC) to either accept or rebut these applications with contrary

evidence itself constitutes a mistake apparent from the record,

warranting correction.

13. Moreover, adverting once again to the core issue of change of

opinion being the cause of reassessment, the findings of CIT order

assume decisive significance in the context of the impugned notice

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dated 23.03.2026 under Section 148. The sanction note proceeds

on the premise that interest income from deposits remains

unexplained and has escaped assessment. However, the CIT(A)'s

order, which has attained finality, not having been challenged by

the Revenue, conclusively establishes that the income was duly

disclosed and the denial of TDS credit was erroneous.

14. There exists, therefore, no fresh information suggesting

escapement of income within the meaning of Section 148. The

Assessing Officer is seeking to reopen an assessment on a premise

already negated by a binding appellate order, which amounts to a

collateral attack on a final adjudication and is wholly impermissible

in law.

15. It is a firmly settled position of law that the power of

reassessment conferred under Section 147 of the Income Tax Act,

1961 cannot be exercised merely on the basis of a change of

opinion by the Assessing Officer with respect to facts and

materials that were already available on record at the time of the

original assessment.

16. Reassessment is not a second innings for the Assessing

Officer to reconsider or re-appreciate evidence that was already

before him. If the Assessing Officer forms an opinion on a

particular issue during the original assessment, whether expressly

or by necessary implication, any subsequent attempt to reopen

the assessment on the same facts constitutes nothing more than a

change of opinion, which is not a valid jurisdictional ground for

invoking Section 147.

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17. Hon'ble the Supreme Court in CIT v. Kelvinator of India

Ltd.1 authoritatively settled this position by holding that although

the Finance Act, 1989 omitted the requirement of "reason to

believe" based on "new tangible material", the concept of "change

of opinion" as a bar to reassessment continues to operate as an

in-built check against arbitrary exercise of the power. It is held

therein that the Assessing Officer must have tangible material to

conclude that income has escaped assessment and that mere re-

examination 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.2 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.

Makwana3 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 sanction note dated 20.03.2026 draws upon the

1. (2010) 320 ITR 561 (SC)

2. (2007) 294 ITR 310 (Del)

3. (1994) 236 ITR 832 (Guj.)

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very same figures and information that were before the appellate

authority. The reassessment notice dated 23.03.2026 is therefore

nothing but a re-examination of a concluded matter, squarely

falling within the prohibited category of a change of opinion. It is

accordingly held to be without jurisdiction and liable to be

quashed.

20. In view of the aforesaid, we are of the opinion that the

appellate order having attained finality, the subsequent notice

dated 23.03.2026 issued under Section 148 of the Income Tax

Act, 1961 for reopening the assessment, on the basis of same

facts and material, is clearly beyond the jurisdiction of the

Assessing Officer and constitutes an overreach of authority. The

very issue has already been examined and adjudicated by the

quasi-judicial authority, i.e., the Commissioner of Income Tax

(Appeals), and therefore cannot be reopened on the same set of

facts. The action of the Assessing Officer in seeking to revisit the

concluded matter amounts to exceeding his authority and reflects

an improper exercise of power.

21. The writ petition is accordingly allowed. Both i.e. the notice

dated 23.03.2026 issued under Section 148 of Income Tax Act,

1961 (Annexure-2) and sanction note dated 20.03.2026 and all

other consequential proceedings arising therefrom are set aside.

22. All pending applications including stay application also stand

disposed of.

                                   (SANDEEP SHAH),J                                                (ARUN MONGA),J
                                    53-raksha/-




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