February 21, 2026 : The Delhi Bench ‘F’ of the Income Tax Appellate Tribunal (ITAT) has quashed reassessment proceedings initiated against Vedanta Limited for the Assessment Year (AY) 2010-11, holding that reopening of the assessment beyond four years was invalid in the absence of any fresh tangible material or failure by the assessee to disclose material facts.
The Bench comprising Judicial Member Pawan Singh and Accountant Member Brajesh Kumar Singh observed that the jurisdictional requirements under Section 147 of the Income-tax Act, 1961 were not satisfied and therefore the notice issued under Section 148 dated 23 December 2016 was without authority of law.
Vedanta Limited, engaged in the manufacture and sale of aluminium and commercial power generation, had filed its return of income for AY 2010-11 on 28 September 2010 declaring income under the normal provisions and book profits under the Minimum Alternate Tax (MAT) regime. The assessment was completed under Section 143(3) on 28 January 2013, during which the Assessing Officer made a disallowance of ₹2,06,19,999 under Section 14A while computing income under the normal provisions.
Subsequently, the Assessing Officer issued a notice under Section 148 seeking to reopen the completed assessment. The reasons recorded for reopening stated that the disallowance under Section 14A had not been added back while computing book profits under Section 115JB, leading to an alleged short computation of income. It was further alleged that the non-claim of additional depreciation of ₹15,49,26,546 resulted in excess deduction claimed under Section 80-IA.
Vedanta objected to the reassessment proceedings on the ground that the notice was issued beyond four years from the end of the relevant assessment year and that there was no failure on its part to disclose fully and truly all material facts necessary for the assessment. The company also contended that the issues relied upon for reopening had already been examined during the original scrutiny proceedings, and therefore the reassessment amounted to a mere change of opinion.
After examining the reasons recorded by the Assessing Officer, the Tribunal noted that the original assessment had been completed under Section 143(3) and the reopening was initiated after the expiry of four years. In such circumstances, the first proviso to Section 147 becomes applicable, which requires the Revenue to demonstrate that income escaped assessment due to the assessee’s failure to disclose material facts fully and truly.
The Tribunal found that the recorded reasons did not allege any such failure by the assessee. It further observed that the issues relied upon for reopening were based entirely on material already available on record during the original assessment proceedings. There was no reference to any new or tangible material that came to the possession of the Assessing Officer after the completion of the assessment.
Relying on the settled legal principle laid down by the Supreme Court in CIT v. Kelvinator of India Ltd. and by the Delhi High Court in CIT v. Orient Craft Ltd., the Bench held that reassessment proceedings cannot be sustained when they are founded merely on a change of opinion on the same set of facts.
The Tribunal therefore held that the reassessment proceedings initiated through the notice dated 23 December 2016 were without jurisdiction and liable to be quashed. Consequently, the assessee’s appeal was allowed and the Revenue’s cross-appeal for AY 2010-11 was dismissed as infructuous.
Case Details:
Vedanta Limited v. Assistant Commissioner of Income Tax, Circle 26(1), New Delhi
ITA Nos. 2405/Del/2019 & 2250/Del/2019
Coram: Judicial Member Pawan Singh and Accountant Member Brajesh Kumar Singh
