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Facts
The assessee filed four appeals against reopening proceedings initiated by the Assessing Authority for assessment years 2013-14 to 2016-17. The reopening was based on the premise that credits under Section 68 and income from undisclosed sources were not verified during the normal assessment.
Held
The Tribunal ruled that reopening assessment proceedings under Sections 148/147 are not sustainable in law when the Assessing Authority's stated reason is merely for verification of issues (Section 68 credits and undisclosed income) that were admittedly not examined in the original assessment. Citing judicial precedents, the Tribunal quashed the impugned reopening orders.
Key Issues
Whether reopening assessment proceedings under Sections 147/148 are valid if the Assessing Authority's reason is solely to verify credits under Section 68 and undisclosed income not examined during the original assessment.
Sections Cited
Section 143(3), Section 147, Section 148, Section 68
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH “SMC”: NEW DELHI
Before: SHRI SATBEER SINGH GODARA
O R D E R PER SATBEER SINGH GODARA, JM:
These assessee’s four appeals - 2231, 2232 & 2234/Del/2023 for corresponding assessment years 2013-14, 2014-15, 2015-16 & 2016-17, arise against National Faceless Appeal Centre (INFAC), Delhi’s separate DIN and order nos. ITBA/NFAC/S/250/2023-24/1053622060(1), ITBA/NFAC/S/250/2023- 24/1053622137(1), ITBA/NFAC/S/250/2023-24/1053622174(1) and ITBA/NFAC/S/250/2023-24/1053622213(1), all dated 08.06.2023 in case nos.
CIT(A), Delhi-4/10276/2018-19, CIT(A), Delhi-4/10277/2018-19, CIT(A), Delhi- u/s 143(3) read with section 147 of the Income-tax Act, 1961, hereinafter referred to as the “Act”.
Heard both the parties at length. Case files perused.
It emerges at the outset that the first and foremost substantive issue that arises for the undersigned adjudication is that of validity of the impugned reopening itself wherein the learned assessing authority duly observes in it’s identical wordings that the credits forming subject matter of section 68 along with income from undisclosed source had not been verified in the course of normal assessment at any point.
The Revenue is indeed fair enough in not rebutting this clinching factual position emanating from the case files.
Faced with this situation, I hereby quote PCIT v. Manzil Dinesh Kumar Shah (2018) 406 ITR 306 (Guj.) and PCIT v. Maheshwari Devi (2023) 454 ITR 755 (Jharkhand) to conclude that such a recourse to 148/147 proceedings for the purpose of verification only is not sustainable in law. The impugned reopening stand quashed in very terms.
All other pleadings on merits stand rendered academic.
This assessee’s appeals are allowed in above terms. A copy of this common order be placed in the respective case files.
Order pronounced in open court on 21.11.2024.