MANISH MITTAL,NARNAUL vs. ITO WARD - 1, NARNAUL

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ITA 1467/DEL/2020Status: DisposedITAT Delhi08 August 2022AY 2013-149 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 the AO was not justified in making additions when the original reasons for initiating reassessment proceedings had ceased to exist. The assessment order was considered bad in law as it went beyond the scope of the reasons for reopening.

What were the facts?

The Assessing Officer (AO) reopened the assessment based on information about cash deposits in the assessee's savings account and purchase of immovable property. However, the additions made during the assessment were on account of disallowance of claimed expenses, not related to the original reasons for reopening.

What were the issues?

Whether additions made during reassessment are valid when they are not related to the reasons that prompted the reopening of the assessment.

Which sections of the Income-tax Act were involved?

Section 147,Section 143(3),Section 148

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(2)Show list

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Income Tax Appellate Tribunal, DELHI BENCH ‘E’, NEW DELHI

Before: SH. N. K. BILLAIYA & SH. YOGESH KUMAR US

Hearing: 03/08/2022Pronounced: 08/08/2022

Appellant Sh. Gautam Jain, Advocate Sh. Lalit Mohan, CA Respondent Sh. Amit Shukla, Sr. DR Date of hearing: 03/08/2022 Date of Pronouncement: 08/08/2022 ORDER PER N.K. BILLAIYA, AM:

This appeal by the assessee is preferred against the order of the CIT(A), Rohtak dated 04.02.2020 pertaining to A.Y.2013-14.

2.

The grievance of the assessee read as under :-

3.

Ground No.1 to 1.4 were not pressed by the Counsel and, therefore, the same are dismissed as not pressed.

4.

Ground No. 2 to 4 relates to the disallowance of expenses. However, the Counsel vehemently argued ground No.5 which reads as under :-

“5. That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that the disallowances made and sustained relating to expenses claimed by the appellant in the return of income are without jurisdiction and untenable as they are beyond the scope of order of assessment framed under section 147 / 143 (3) of the Act.”

5.

Representatives of both the sides were heard at length. Case records carefully perused.

6.

Briefly stated the facts of the case are that as per information available with the AO it came to his notice that the assessee has deposited cash in his savings Bank account amounting to Rs. 53.73 lacs during financial year under consideration. It also came to the notice of the AO that the assessee has purchased immovable property amounting to Rs.27.63 lacs. Since no return was filed by the assessee notice u/s. 148 of the Act was issued to the assessee on 06.01.2016. In response to the notice the assessee filed his return of income declaring income of Rs.182180/-.

7.

The assessment was completed vide order dated 27.12.2016 framed u/s. 147 r.w.s. 143 (3) of the Act by making following additions :-

8.

The assessee challenged the validity of the assessment order before the CIT(A) but without any success.

9.

Before us the Counsel for the assessee vehemently stated that the entire assessment is devoid of any addition relating to the reasons which prompted the AO to reopen the assessment. It is the say of the Counsel that such assessment order is bad in law and deserved to be quashed.

10.

Strong reliance was placed on the decision of the Hon’ble Bombay High Court in the case of Jet Airways India Limited 331 ITR 236 and Ranbaxy Laboratories Limited 336 ITR 136 (Del).

11.

Per contra the DR strongly supported the findings of the AO and the CIT(A).

12.

As mentioned elsewhere the reasons for reopening the assessment/ was cash deposit in the Savings Bank account amounting to Rs.53.73 lacs and purchased of immovable property amounting to Rs.27.63 lacs. However, the assessment has been completed by making addition on account of disallowance of the claim of expenditure as mentioned elsewhere.

13.

On the given set of facts in our considered opinion the decision of the Hon’ble Bombay High Court in the case of Jet Air Ways (supra) squarely apply. The relevant findings of the Hon’ble High Court read as under :-

xxxx

14.

Similar view was taken by the Hon’ble Jurisdictional High Court of Delhi in the case of Ranbaxy Laboratories. The relevant findings read as under :-

15.

Finding parity of facts, respectfully following the decision of the Hon’ble High Court (supra) we have no hesitation in holding that the AO was not justified in making the impugned additions/ disallowances when the reasons for the initiation of reassessment proceedings seized to survive. The appeal is accordingly allowed on ground No.5. Order pronounced in the open court on 08.08.2022.

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