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Facts
The assessee challenged reopening of assessment proceedings, which were initiated based on a tax evasion petition and media hype. The assessee was also involved in proceedings under the Prevention of Money Laundering Act (PMLA) and investigations by the CBI.
Held
The Tribunal held that the reopening of assessment was not permissible solely on the basis of a tax evasion petition and media hype. Given the pendency of PMLA and CBI proceedings, the matter was restored to the file of the Assessing Officer (AO). The AO is to re-adjudicate the issues after the finalization of PMLA proceedings, granting the assessee an adequate opportunity of being heard.
Key Issues
Whether the reopening of assessment is valid when initiated based on tax evasion petition and media hype, especially when PMLA and CBI proceedings are pending.
Sections Cited
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Income Tax Appellate Tribunal, IN THE INCOME TAX APPELLATE TRIBUNAL,
BEFORES/ S/SHRI GEORGE MATHAN, JUDICIAL , JUDICIAL MEMBER AND RATNESH NANDAN SAHAY, ACCOUNTANT MEMBER AND RATNESH NANDAN SAHAY, ACCOUNTANT MEMBER AND RATNESH NANDAN SAHAY, ACCOUNTANT MEMBER & 55/RAN/2017 7 Assessment Year Assessment Years:2006-07, 2007-08 2010 08 2010-11 Shri Kamlesh Kumar Singh, Shri Kamlesh Kumar Singh, Vs. DCIT, Circle- -1, Ranchi Hamidganj, Daltonganj Hamidganj, Daltonganj PAN/GIR No. .AFZPS 8288 J (Appellant (Appellant) .. ( Respondent Respondent) Assessee by : Shri Devesh Poddar, Adv Devesh Poddar, Adv Revenue by :Shri Khubchand T Pandya, Sr DR T Pandya, Sr DR Date of Hearing : 11/06/202 2025 Date of Pronouncement :11/06/ /2025 O R D E R Per Bench These are appeal appeals filed by the assessee against the separate separate orders of the ld CIT(A)-Ranchi Ranchi dated 7.11.2016in Appeal No.171/Ran/Oth/09 171/Ran/Oth/09-10 and No.172/Ran/Oth/09 No.172/Ran/Oth/09-10 for the assessment year 2006-07 & 2007 07 & 2007-08 and order dated 11.11.2016 in Appeal No.71/Ran/Oth/2012 dated 11.11.2016 in Appeal No.71/Ran/Oth/2012-13 for the assessment year 13 for the assessment year 2010-11, respectively 11, respectively
Shri Khubchand T Pandya, Sr hri Khubchand T Pandya, Sr DR appeared for the revenue and Shri DR appeared for the revenue and Shri Devesh Poddar,ld AR appeared for the assessee. AR appeared for the assessee.
P a g e 1 | 3 ,52 & 55/RAN/2017 Assessment Years:2006-07, 2007-08 2010-11
At the time of hearing, it was squarely submitted by ld AR that proceedings under PMLA and also proceedings by the CBI had been initiated against the assessee insofar as the assessee was an MLA during the period. It was the submission that on the basis of certain tax evasion petition and media hype the reopening was done. It was the submission that the reopening itself is not permissible on the basis of tax evasion petition and media hype. It was the submission that the reopening is liable to be quashed. To a specify query as to the status of the PMLA proceedings and CBI proceedings, it was submitted that the assessee has succeeded in PMLA proceedings and the Government has challenged the decision before the PMLA Tribunal. It was the submission that as the reopening itself is liable to be annulled and the assessment orders are also liable to be annulled.
In reply, ld Sr DR submitted that as the matter in PMLA and CBI is pending, it would not be appropriate to adjudicate on the specific issue at the present. It was also the submission that he has no objection if theissue is restored to the file of the AO to await the final outcome of the PMLA proceedings.
We have considered the rival submissions. It is noticed that the assessee has challenged the reopening of assessment before the Tribunal. It is also an admitted fact that the assessee is under charge with PMLA proceedings. This being so, so to await the final outcome of the PMLA proceedings, the issues in these appeals are restored to the file of the AO for adjudication on the issues on P a g e 2 | 3 ,52 & 55/RAN/2017 Assessment Years:2006-07, 2007-08 2010-11 the appeals after the finalization of the proceedings under PMLA Act. The issue of reopening and other legal issue that the assessee proposed to raise shall remain open. The Liberty is granted to the assessee to raise any such grounds he may so desires in the set aside proceedings. The Assessing Officer shall readjudicate the issue in the appeals after the finalization of PMLA proceedings after granting adequate opportunity of hearing to the assessee. The assessee shall keep intimate the AO in respect of the finalization of the PMLA proceedings.
6.. In the result, appeals of the assessee stand partly allowed for statistical purposes.
Order dictated and pronounced in the open court on 11/06/2025. Sd/- Sd/- (RATNESH NANDAN SAHAY) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER Ranchi; Dated 11/06/2025 B.K.Parida, SPS (OS) Copy of the Order forwarded to : 1. The Appellant : Shri Kamlesh Kumar Singh, Hamidganj, Daltonganj 2. The Respondent: DCIT, Circle-1, Ranchi 3. The CIT(A)-Ranchi 4. Pr.CIT,Ranchi 5. DR, ITAT, 6. Guard file. //True Copy//