Herein, we report an unexpected cascade ring expansion/annulation reaction between 4-diazo-1,4-dihydroisoquinolin-3-ones and a variety of isatin derivatives in the presence of Sc(OTf)3 catalyst. A series of novel indolobenzazepinones were synthesized in good to excellent yields with the exclusion of nitrogen and carbon dioxide gases. High bond-forming efficiency, novel reaction mechanism, readily available starting materials, commercially available cheap catalyst, broad substrate scope, and mild reaction conditions are the prominent features of this method.