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Facts
The Assessing Officer initiated reassessment proceedings under section 147/148 based on a belief that the assessee made unexplained cash deposits of Rs. 60.40 lakhs. However, during the reassessment, the AO ultimately made a disallowance of Rs. 46,86,458/- related to purchases, an issue not part of the original reasons for reopening.
Held
The Tribunal, relying on CIT Vs. Jet Airways (I) Ltd., held that a reopening is unsustainable when the Assessing Officer makes an addition on an issue not part of the initial reasons recorded, and no addition is made on the original reasons. Consequently, the impugned reassessment proceedings were quashed.
Key Issues
Whether reassessment proceedings are valid if the final addition is made on an issue not forming part of the initial reasons to believe, and no addition is made on the original reasons.
Sections Cited
147, 144, 148
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH: ‘SMC’ NEW DELHI
Before: SHRI SATBEER SINGH GODARA
Assessment Year: 2012-13 Vs. Income Tax Officer, Nipun Trading Company, IX/6560, Nehru Gali, Ward-58(8), Gandhi Nagar, New Delhi New Delhi PAN: AAHFN5820A (Appellant) (Respondent) Assessee by Sh. Narender Chillar, Advocate Department by Sh. Yogesh Sharma, Sr. DR Date of hearing 07.11.2024 Date of pronouncement 14.11.2024 ORDER This assessee’s appeal for assessment year 2012-13, arises against the National Faceless Appeal Centre [in short, the “NFAC”] Delhi’s Din and Order No. ITBA/NFAC/S/250/2024- 25/1065118738(1), dated 24.05.2024, involving proceedings under section 147 read with section 144 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’).
Heard both the parties. Case file perused.
It emerges during the course of hearing with the able assistance coming from both the parties that learned Assessing Officer had set into motion section 148/147 proceedings vide notice dated 29.03.2019, after recording reasons to believe that the assessee had made cash deposits of Rs.60.40 lakhs which represented its unexplained income. Suffice to say that, the learned Assessing Officer ended up in making disallowance of assessee’s purchases of Rs.1,87,45,832/- at the rate of 25% coming to Rs.46,86,458/- as evident from the impugned assessment discussion.
This being the clinching case, I am of the considered view that case law CIT Vs. Jet Airways (I) Ltd., reported in [2011] 331 ITR 236 (Bom) has already settled the issue in assessee’s favour and against the department that such a reopening wherein the Assessing Officer makes an addition on an issue which never formed part of the reason quoted, coupled with no addition as reasons recorded, is not sustainable in law. I accordingly quash the impugned reopening in very terms. Ordered accordingly.] [All other pleadings on merits stand rendered academic.] 5. This assessee’s appeal is allowed. Order pronounced in the open court on 14th November, 2024 Sd/- (SATBEER SINGH GODARA) JUDICIAL MEMBER Dated: 14th November, 2024. RK/- Copy forwarded to: 1. Appellant 2 | P a g e