Rajesh Mohan Singh Hajari Vs ITO (ITAT Mumbai)
Reassessment u/s 147 was initiated on the basis of Form 26AS reflecting higher professional receipts than those offered by Assessee, a medical professional consistently following cash system of accounting. AO taxed ₹2,02,968 as accrued professional income & also denied Chapter VI-A deduction of ₹1.30 lakh in computation.
Tribunal held that where Assessee follows cash basis regularly & there is no change in method of accounting, income not actually received during the year cannot be brought to tax merely because TDS was deducted or income appeared in Form 26AS; such income was already offered in subsequent AY on receipt basis. ITAT accordingly deleted the entire addition of ₹2,02,968. Tribunal further held that where Chapter VI-A deduction was allowed in original scrutiny assessment & not disturbed in reassessment order, its denial in computation sheet was erroneous; AO was directed to allow the deduction. Reopening jurisdiction was upheld as Assessee had not filed return in response to notice u/s 148. Appeal partly allowed.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
This is an appeal filed by the assessee against the order of the Learned Commissioner of Income Tax (Appeals)-National Faceless Appeal Centre (NFAC), Delhi [„Ld.CIT(A)‟], dated 21-07-2025, pertaining to Assessment Year (AY) 2014-15, wherein the assessee has taken the following grounds of appeal:
“1. On the facts and circumstances of the case and in law, the Ld. CIT(A) grossly erred in confirming the action of the AO of reopening the case under section 148 of the IT Act, 1961.
2. On the facts and circumstances of the case and in law, the Ld. CIT(A) grossly erred in confirming the action of the AO, the reassessment order passed u/s 147 r.w.s 144B of the I.T. Act which interalia is beyond Jurisdiction and therefore bad in law.
3. On the facts and circumstances of the case and in law, the Ld. CIT(A) grossly erred in confirming the action of AO in taxing the Professional fees accrued but not received amounting to Rs. 202,968/- as Business/ Profession despite the fact that appellant offers income for Tax on cash basis & income of Rs. 2,02,968/- has not been received by the appellant.
4. On the facts and circumstances of the case and in law, the Ld. CIT(A) grossly erred in confirming the disallowance of Rs. 1,30,000/- made by the Assessing Officer being deduction claimed under chapter VI A of the IT. Act.”
2. Briefly stated facts of the case are that the assessee has filed his original return of income on 28-11-2014, which was the subject matter of scrutiny assessment u/s. 143(3) of the Income Tax Act, 1961 („the Act‟), wherein the returned income was accepted vide order dt. 21-10-2016. Subsequently, basis information that the assessee has offered lesser professional receipts to tax during the year under consideration, notice u/s. 148 of the Act was issued to the assessee. In response to the notice, the assessee did not file the return of income and thereafter, the AO issued notice u/s. 142(1) of the Act and after taking into consideration the submissions filed by the assessee on 04-03-2022, completed the assessment u/s.147 r.w.s. 144B of the Act vide order dt. 22-03-2022, wherein he has brought to tax the difference in the professional receipts amounting to Rs. 2,02,968/- and against the originally assessed income of Rs. 13,87,349/-, re-assessed income was determined at Rs. 15,90,317/-.
