RAMA SHANKER PAREEK,JAIPUR vs. INCOME TAX OFFICER, WARD NO. 7(2), JAIPUR

ITA 253/JPR/2025Status: DisposedITAT Jaipur24 June 2025AY 2010-1131 pages
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What did the Tribunal hold?

The Tribunal quashed the assessment order passed by the AO and the order of the CIT(A). The primary reasoning was that the reasons recorded by the AO for initiating reassessment proceedings under Section 147 were factually incorrect, stating a sale of property when it was a purchase. The Tribunal held that the reasons recorded must be clear, unambiguous, and based on tangible material, and that the AO must disclose the material that led to the belief of escaped income. The Tribunal found that the AO had not provided any material or referred to any material on the basis of which the reasons were formed, and there was no tangible material in possession of the AO leading to the belief that income had escaped assessment. The Tribunal further noted that the AO substituted the reasons recorded for initiating proceedings under Section 148 when passing the assessment order, which was beyond his jurisdiction. The Tribunal observed that the CIT(A) did not apply his mind to the fact that wrong reasons were recorded and no addition was made on those grounds, hence the CIT(A) should have quashed the assessment order. Consequently, grounds 3 and 4 became infructuous. The appeal of the assessee was allowed.

What were the facts?

The assessee, Rama Shanker Pareek, filed his return of income for Assessment Year 2010-11 on 27.07.2010, declaring a total income of Rs. 3,46,497/-. The Assessing Officer (AO) initiated reassessment proceedings under Section 147 based on information that the assessee had sold a plot for Rs. 20,00,000/- on 04.11.2009 and failed to disclose capital gains. The assessee contended he had purchased the plot for Rs. 20,00,000/- on 04.11.2009 and that the source of funds included a housing loan and bank deposits. The AO, finding cash deposits of Rs. 4,28,000/- in the bank account unexplained, made an addition of this amount under Section 69C. The CIT(A) set aside the assessment order to the AO for a fresh assessment. The assessee appealed to the ITAT.

What were the issues?

1. Whether the reassessment proceedings initiated under Section 147 read with Section 144 of the Income Tax Act, 1961, are illegal, bad in law, barred by limitation, without jurisdiction, and without proper approval, and thus liable to be quashed. The assessee argued that the reasons recorded for reopening were incorrect as they stated a sale of property when it was a purchase, rendering all proceedings invalid. The assessee also contended that the AO failed to disclose the material on record that led to the belief of escaped income and that the reasons recorded were not based on tangible material. The revenue did not record any specific arguments on this issue. 2. Whether the CIT(A) erred in setting aside the assessment to the AO for a fresh assessment without deciding the legal and other grounds of appeal when all details were available. The assessee argued that the CIT(A) should have quashed the assessment order given the flawed reasons for reopening. The revenue did not record any specific arguments on this issue. 3. Whether the addition of Rs. 4,28,000/- made by the AO on account of cash deposits in the bank account as unexplained investment under Section 69C, and confirmed by the CIT(A), is bad in law and liable to be deleted. The assessee argued that the addition was contrary to facts and law. The revenue did not record any specific arguments on this issue. 4. Whether the AO erred in charging interest under Sections 234A, 234B, and 234C. The assessee denied liability for such interest. The revenue did not record any specific arguments on this issue.

Which sections of the Income-tax Act were involved?

Section 147,Section 144,Section 69C,Section 251(1)(a),Section 148,Section 142(1),Section 234A,Section 234B,Section 234C

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Income Tax Appellate Tribunal, JAIPUR BENCHES,”SMC” JAIPUR

Before: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM

For Respondent: Shri Gautam Singh Choudhary, Addl.CIT
Hearing: 08/04/2025Pronounced: 24/06/2025

PER: DR. S. SEETHALAKSHMI, J.M. This is an appeal filed by the assessee against the order of ld. CIT(A), National Faceless Appeal Centre (in short "NFAC") Delhi dated 09.12.2024 passed under section 250 of the I.T. Act, 1961, for the assessment year 2010-11. The assessee has raised the following grounds of appeal :- "

1.

The impugned order u/s 147 r.w.s.144 of the I. T. Act, 1961 dated 13.11.

The order continues below.

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