JHM DEVELOPERS PRIVATE LIMITED,KOLKATA vs. INCOME TAX OFFICER - 13(3), DELHI

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ITA 1470/DEL/2024Status: DisposedITAT Delhi21 November 2024AY 2011-12Bench: SHRI SATBEER SINGH GODARA (Judicial Member)2 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 initiating reopening proceedings under Sections 148/147 solely for the purpose of verification is not sustainable in law, citing relevant judicial precedents. Consequently, the impugned reopening was quashed, and all corresponding additions were deemed academic.

What were the facts?

The assessee challenged the validity of reopening assessment proceedings for AY 2011-12, which resulted in additions of Rs. 26.95 lakhs for share sales and Rs. 26,950/- under Section 69C for commission. The reopening was initiated by the Assessing Officer to verify transactions amounting to Rs. 57.70 lakhs.

What were the issues?

Whether assessment reopening proceedings under Sections 148/147 of the Income Tax Act are legally valid if initiated merely for the purpose of verification of transactions.

Which sections of the Income-tax Act were involved?

Section 250,Section 148,Section 147,Section 69C

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(2)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

Income Tax Appellate Tribunal, DELHI BENCH “SMC”: NEW DELHI

Before: SHRI SATBEER SINGH GODARA

For Appellant: Shri Divesh Poddar, Adv
For Respondent: Shri Sanjay Kumar, Sr. DR
Hearing: 14.11.2024Pronounced: 21.11.2024

O R D E R

PER SATBEER SINGH GODARA, JM:

1.

This assessee’s appeal for assessment year 2011-12 arises against National Faceless Appeal Centre (INFAC), Delhi’s DIN and order no. ITBA/NFAC/S/250/2023-24/1060991733(1), dated 15.02.2024 in case no. CIT(A), Delhi-5/10283/2018-19 in proceedings u/s 250 of the Income-tax Act, 1961, in short the “Act”.

Heard both the parties at length. Case file perused.

2.

Coming to the assessee’s legal plea challenging validity of the impugned reopening itself culminating in corresponding additions from sale of shares of Rs. 26.95 lakhs and section 69C commission addition on estimation to the tune of Rs. 26,950/-, it emerges from a perusal of the Assessing Officer’s discussion at page 3 148/147 in order to verify the corresponding transactions of Rs. 57.70 lakhs. This clinching fact has gone unrebutted from the Revenue’s side.

3.

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 stands quashed in very terms.

All other pleadings on merits stand rendered academic.

4.

This assessee’s appeal is allowed in above terms.

Order pronounced in open court on 21.11.2024.

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