RAJENDRA HARIPRASAD JANI,VADODARA vs. THE INCOME TAX OFFICER, WARD-8(1), BARODA

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ITA 1439/AHD/2016Status: DisposedITAT Ahmedabad29 January 2020AY 2009-103 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that if an assessment is reopened for a specific reason and no addition is made on that ground, the AO cannot make additions on other issues that came to notice during the reassessment proceedings. Therefore, the reassessment order was quashed.

What were the facts?

The assessee's assessment was reopened under Section 147 based on the alleged sale of immovable property. However, the Assessing Officer (AO) did not make any addition related to this specific reason for reopening.

What were the issues?

Whether the AO can make additions on grounds other than those for which the assessment was reopened under Section 147, when no addition is made on the original ground.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 143(3)

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, AHMEDABAD - BENCH ‘SMC’

Before: SHRI RAJPAL YADAV, VICE- & SHRI AMARJIT SINGH

For Respondent: Shri Dilip Kumar, Sr.DR
Hearing: 28/01/2020Pronounced: 29/01/2020

आदेश/O R D E R PER RAJPAL YADAV, VICE-PRESIDENT:

1.

Assessee is in appeal before the Tribunal against order of ld.CIT(A)-4, Vadodara dated 17.2.2016 passed for the Asstt.Year 2009- 10.

2. In response to notice of hearing, the assessee has filed written submissions, but did not appear in person or through authorized representative. The assessee in the first ground of appeal has pleaded that the ld.CIT(A)has erred in upholding the assessment order passed by the AO under section 143(3) r.w.s 147.

3.

With the assistance of the ld.DR, we have gone through the record carefully. It emerges out from the record that the assessment of the assessee was reopened by issuance of notice under section 148 of the Income Tax Act, 1961. Reasons recorded for reopening are available on page no.7 of the paper book. They read as under:

“Reasons recorded for initiation of proceedings u/s. 147 of the Act for issue of Notice u/s. 148 of the Income Tax Act 1961 On verification it is noticed that the assessee has not filed his return of income for the A.Y.2009-10.

2.

On going through the ITS details of AIR transactions, it is noticed that the assessee has during the F.Y.2008-09 Sale of immovable property valued at Rs.39,00,000/- on 12/12/2008.

3. In view of the above, the taxability of the source of payment is required to be investigated and also escapement of income as the assessee has not filed his return of income for A.Y.2009-10.

4.

I have, therefore, reason to believe that the income chargeable to tax has escaped assessment for A.Y. 2009-10 within the meaning of section 147 of the Act. Accordingly, notice u/s 148 is hereby issued.

Place: Baroda Sd/-, (L.N.MEENA) Date: 10/02/2012 Income tax officer Ward-8(l), Baroda 4. The AO sought to investigate this source of payment qua the alleged sale of immovable property. In other words, the assessment was reopened under the reason that the income of Rs.39 lakhs appears to have escaped the taxation. It emerges out from the record that ground on which assessment was reopened no addition has been made. The ld.AO has made addition qua (a) unexplained cash credit in the bank account, difference in interest declared and interest assessed, and (c)excess deduction under section 80C. The Hon’ble Gujarat High Court, Hon’ble Bombay High Court, and Hon’ble Delhi High Court are unanimous in their opinion that if no addition is being made qua any issue on which the assessment order is being reopened, then the AO will not be authorized to make addition of any other issue, which came to his notice during the assessment proceedings. For this view, we find support from the decisions of Hon’ble Bombay High Court in the case of CIT Vs. Jet Airways India Ltd., 195 taxmann 117, Ranbaxy Laboratories Ltd., 336 ITR 136 for the proposition that upon issuance of notice under section 148, if no addition is made on that issue, then it is not open to the AO to assess independently any other income which does not form the subject matter of the notice. In view of the above position of law, we quash the reassessment order, and allow the ground of appeal.

5.

In the result, appeal of the assessee is allowed. Order pronounced in the Court on 29th January, 2020 at Ahmedabad.

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