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Facts
The assessee filed four appeals against orders from the National Faceless Appeal Centre (INFAC) for assessment years 2013-14 to 2016-17. The core issue concerned the validity of reopening assessments under sections 147/148 of the Income Tax Act, 1961, for verifying credits under section 68 and undisclosed sources, which the Assessing Authority admitted had not been verified during the original assessment proceedings.
Held
The Tribunal, relying on judicial precedents, ruled that reopening proceedings under sections 148/147 solely for the purpose of verification is not sustainable in law. Consequently, the impugned reopening of the assessments was quashed.
Key Issues
Whether the reopening of assessment under sections 147/148 is valid if the sole purpose is to verify credits under section 68 and undisclosed sources not examined during the original assessment.
Sections Cited
143(3), 147, 68, 148
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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.