Quote for the Day:

"A paper is flying in the air due to luck. 
But a kite flying in the air is due to efforts. 
So don't worry, if luck doesn't support efforts are always yours"

Important Case Law:

“Reassessment based on uncorroborated loose sheets found during search was unjustified: HC"

Where Assessing Officer repeatedly re-presented proposal for obtaining sanction under section 151 after initial refusal, culminating in eventual approval, such repeated presentations were not permissible, rendering the sanction and consequent reassessment proceedings under sections 147 and 148 vitiated and liable to be quashed.

Where revenue issued reopening notice against assessee on ground that during search operation conducted against one AS, two loose sheets were found which revealed that AS had made transactions in cash to tune of about Rs. 16 crores in favour of assessee, since said loose sheets were not corroborated by any other independent material and there was no material to demonstrate proximity between assessee and AS, impugned reopening notice issued against assessee was unjustified.

Case Analysis: Principal Commissioner of Income-tax (Central) Vs. Rajan Rajesh Kumar

Date:                 December 17, 2025

Citation:           [2025] 181 taxmann.com 750 (Uttarakhand)

Bench:              G. Narendar, CJ. and Subhash Upadhyay, J.

Facts of the Case:

• The assessee, serving as Managing Director of SIDCUL, filed a return for A.Y. 2015-16 declaring about Rs. 6.55 lakhs.

• A survey and search on a third-party subcontractor (AS) of UPRNN led to impounding of two loose sheets (LP 186 & 187) with entries of cash, bullion, silver and cheques allegedly favouring the assessee to about Rs. 16 crores. It was not disputed that SIDCUL and UPRNN were distinct entities, and the Department relied solely on these loose sheets without other corroborative material.

• Based on LP 186 & 187, the AO recorded reasons under section 147 and sought sanction under section 151 to issue notice under section 148. The first proposal (within four years) recorded escaped income at about Rs. 16.72 crores and was refused for failure to corroborate pages 186 & 187. After the four-year period elapsed, fresh reasons were recorded showing about Rs. 13.16 crores; this did not culminate in approval. A further proposal followed, recording about Rs. 13.16 crores and Rs. 15.85 crores; this too was not approved, with a note that reasons be discussed in detail. A fourth proposal with substantially similar reasons was then sent; this time the PCIT granted approval, and sanction dated 08.01.2021 issued, leading to reassessment proceedings for A.Ys. 2015-16 and 2016-17. The assessee also pointed out that the same PCIT had earlier, in a Rule 9 report before the Settlement Commission in the third party’s case, attributed only about Rs. 20 lakhs to the assessee but later accorded approval to about Rs. 13.26 crores.

• On appeal, the Commissioner (Appeals) upheld the AO’s action.

• Before the Tribunal, the assessee contended that the AO proceeded solely on LP 186 & 187 without corroborative material; that earlier proposals had been refused; and that repeated re-presentations with changing figures (about Rs. 16.72 crores, Rs. 13.16 crores, and Rs. 15.85 crores) culminated in approval on the fifth attempt. The Tribunal recorded these repetitive proposals, and noted that there was absence of any material beyond the two loose pages and observed that the same PCIT had earlier placed a figure of about Rs. 20 lakhs before the Settlement Commission but later accepted about Rs. 13.26 crores while granting approval, and noted that entries linked to the assessee’s father were accepted as the father’s transactions (though his case was reopened under section 148, no additions were made). The Tribunal allowed the assessee’s appeals for A.Ys. 2015-16 and 2016-17.

• On appeal to the High Court.

For Judgment,  Please click here

Useful Updates:

( Contribution by CA. Gaurav Arya )

• LUT Saga under GST  Read More

( Contribution by CA. Rishabh Agarwal )

• 										The Weekly Global Tax & TP Brief | 05 Jan - 09 Jan 2026  Read More
  										

• Tax challenges arising from the Digitalisation of the Economy - Global Anti-base Erosion Model Rules (Pillar Two), side-by-side Package  Read More

• 										Singapore | IRAS updates Transfer Pricing guidance for related party loans (2026)  Read More
  										

( Contribution by CA. Samarpit Sharma )

• 										The GST Insider 27th Edition - Enforcement Provisions under GST (Part 1)  Read More
  										

Forthcoming CPE Programs in the North Region:

Find Your Next CPE Program with Ease!

Discover CPE programs near you in the North Region with Voice of CA's CPE Hours Program Ready Reckoner - your one-stop solution for professional development!

Click on below link for the Ready Reckoner:

https://docs.google.com/spreadsheets/d/1K3E-NfnSIl-UXEnZiIc4S1fzGPcpnG-a/edit?usp=sharing&ouid=118156324865208974839&rtpof=true&sd=true

Job Vacancies of the Week:

Click on the button below for this week's collated job vacancies.

You can always stay in touch with Voice of CA on various social media platforms. Click on the Linktree to reach out to us :