RANJITH KUMAR MANIKONDA,HYDERABAD vs. INCOME TAX OFFICER, WARD-11(3), HYDERABAD

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ITA 99/HYD/2020Status: DisposedITAT Hyderabad15 February 2022AY 2008-093 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 Assessing Officer failed to record that the assessee's taxable income had escaped assessment, which is a mandatory requirement for reopening. Therefore, the impugned reopening was quashed.

What were the facts?

The Assessing Officer reopened the assessment for AY 2008-09 based on a statement recorded during a survey, which indicated the assessee purchased agricultural land for a significant sum without filing a return reflecting the source of investment. The AO's reasons for reopening were for 'further verification of the sources of investments'.

What were the issues?

Whether the reasons recorded by the Assessing Officer for reopening the assessment were sufficient to establish that income had escaped assessment, as required by law.

Which sections of the Income-tax Act were involved?

Section 147,Section 148

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, HYDERABAD BENCHES “B” : HYDERABAD

Before: SHRI S.S.GODARA & SHRI LAXMI PRASAD SAHU

BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER Assessment Year: 2008-09 Ranjith Kumar Manikonda, Income Tax Officer, HYDERABAD Vs Ward-11(3), [PAN: ALHPR3561K] HYDERABAD (Appellant) (Respondent) For Assessee : Shri P.Murali Mohan Rao, AR For Revenue : Shri Rohit Mujumdar, DR Date of Hearing : 13-01-2022 Date of Pronouncement : 15-02-2022 O R D E R PER S.S.GODARA, J.M. : This assessee’s appeal for AY.2008-09 arises from the CIT(A)-1, Hyderabad’s order dated 18-10-2019 passed in case No.0118 / CIT(A)-1 / Hyd / 2016-17, involving proceedings u/s.144 r.w.s.147 of the Income Tax Act, 1961 [in short, ‘the Act’]. Heard both the parties. Case file perused.

2.

Coming to the assessee’s first and foremost substantive ground challenging validity of the impugned re-opening, we note that the Assessing Officer herein had recorded the following reasons: “During the survey proceedings in the case of M/s KSR Constructions, sworn statement of Sri M.Ranjith Kumar (brother-in- law of Sri K. Kondal Rao who is a partner in M/s KSR Constructions) was recorded u/s 131 of the I.T. Act, 1961.

In the statement, regarding details of immovable properties Sri M Ranjith Kumar stated that in the year 2008 he and his wife Smt. M. Saritha purchased agricultural lane. admeasuring 17.5 acres in the village Kandi, Medak Dist. for a consideration of Rs.2,10,75,000/- and admitted that total consideration was paid by himself and his wife Smt.M. Saritha. However, the assessee has not filed return of income for the AY 2008-09 reflecting the source for investment. In view of the above, for further verification of the sources of investments of the assessee, it is opined that the case would require re-opening of the assessment for the AY 2008-09. In view of the same, kind approval is sought for issue of notice u/s 147 of Income Tax Act”.

3.

Learned departmental representative fails to dispute that the Assessing Officer has clearly stated in his re-opening reasons that he proposed the said Section 148/147 mechanism in motion for “further verification of the sources of investments of the assessee” only. That being the case, we are of the opinion that learned Assessing Officer had miserably failed to record that the assessee’s taxable income liable to be assessed had escaped assessment which is in the nature of a mandatory requirement. Case law Hindustan Lever Ltd., Vs. R.B. Wadkar [268 ITR 332] (Bom) holds that the Assessing Officer’s reopening reasons have to be read as it is without any scope for addition/deletion or substitution thereof at a latter stage. The impugned re-opening itself is quashed in light thereof accordingly. All other pleadings on merits are rendered infructuous.

4.

This assessee’s appeal is allowed in above terms.

Order pronounced in the open court on 15th February, 2022

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