INCOME TAX ACT, 1961

Section 147

Reassessment - Validity - Reopening of assessment - AO simply going by information received without application of mind

AO issued notice under section 148 on 22-3-2015 by recording reasons that as per AIR data information received from Office of DIT, CIB Rajasthan, Jaipur showing that assessee had paid Rs. 3 lakhs against credit card bills in financial year 2008-09 relevant to assessment year under consideration, hence it was not possible to verify tax liability in this transaction. Further, the assessee has not filed return of income for the year under consideration, therefore, believing that the income to the tune of Rs. 3,85,336 has escaped assessment, AO reopened assessment and made addition. Held: Reasons recorded by AO were factually not correct and the formation of belief by the AO was actually based on assumption of incorrect facts. Assessee has filed his return of income on 9-7-2010. Though the return was belated, however, the same was acknowledged by the department vide Acknowledgement No. 3471, the copy of the computation sheet has been placed at page 9 of the Paper Book which shows the details regarding the return of income declared by the assessee in the said return and the amount of tax payable on the said income. All the details were matching with return of income filed by assessee, except assessment year which was mistaken by department as 2010-11, instead of 2009-10. Accordingly, AO reopened assessment only on suspicion of escapement of income on account of credit card payment of Rs. 3 lakhs without considering the fact that assessee already filed his return of income declaring total income of Rs. 2.34,560 as income under the head 'Salary'. AO during the course of original assessment proceedings verified income of assessee from M/s. Genpact India as well as details of credit card payment from Citibank and had received requisite details from said company. Once assessee had pointed out filing of return of income as well as all other details of source of payment of credit card bills which were all through banking channel and moreover, transactions were on-line payment from bank account of assessee, then reopening of assessment by AO without application of mind and simply going by information received was quashed as invalid.

Relied:Ram Mohan Rawat v. ITO [ITA No. 1014/JP/2018] : 2019 TaxPub(DT) 7404 (Jp-Trib).

REFERRED :

FAVOUR : In assedssee's favour.

A.Y. : 2009-10

SUBSCRIBE FOR FULL CONTENT