INCOME TAX ACT, 1961

Section 147

Reassessment - Validity - AO recorded wrong facts on many counts in the reasons recorded for reopening of assessment -

AO reopened assessment on the reasoning that assessee did not disclose certain bank accounts and therefore, income of assessee to the extent of Rs. 58,40,171 had escaped assessment. Assessee challenged this on the ground that AO recorded wrong facts on many counts in the reasons recorded for reopening of assessment. Held: AO recorded wrong facts on many counts in the reasons recorded for reopening of assessment, i.e., AO recorded incorrect amount of Rs. 58,40,171 credited in HSBC Account, Noida, despite that he had admitted in the assessment order that it was Rs. 30,74,006. AO in the reasons also recorded incorrect fact that no assessment was completed under section 143(3) but in the reason itself AO recorded that earlier reassessment has been done under section 147/148 read with section 143(3). The AO also incorrectly recorded that sanction for reopening of assessment was required under proviso to section 151(1), despite such proviso did not exist in the statute as it was amended in 2015. AO, therefore, recorded wrong, incorrect and non-existing reasons for reopening of the assessment and accordingly there was a total non-application of mind on part of AO while recording reasons for reopening of assessment. Accordingly, reassessment was quashed as invalid.

Applied:Pr. CIT v. Meenakshi Overseas (P) Ltd. (2017) 395 ITR 677 (Del-HC.) : 2017 TaxPub(DT) 1791 (Del-HC), Pr. CIT v. RMG Polyvinyl (I) Ltd. (2017) 396 ITR 5 (Del-HC) : 2017 TaxPub(DT) 2034 (Del-HC), Pr. CIT v. G & G Pharma India Ltd. (2015) 384 ITR 147 (Del-HC) : 2015 TaxPub(DT) 4054 (Del-HC) and <>i>Signature Hotels (P) Ltd. v. ITO.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. :

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