Pallavi Kamal Shah Vs ITO (ITAT Mumbai)
Late Return on Same Day Can’t Invalidate Best-Judgment Reassessment: ITAT Mumbai Upholds Ex-parte Order u/s 144 r.w.s. 147
The Mumbai ITAT “C” Bench dismissed the appeal of Pallavi Kamal Shah (ITA No. 6317/Mum/2024, AY 2013-14), holding that reassessment completed u/s 144 r.w.s. 147 could not be invalidated merely because the assessee filed the return of income on the very same day the assessment order was passed, and that non-issuance of notice u/s 143(2) in such circumstances did not vitiate the proceedings
The case was reopened on the basis of information relating to share transactions aggregating ₹4.48 crore. Despite issuance of notice u/s 148 and subsequent opportunities, the AO recorded non-compliance and proceeded to pass a best-judgment assessment u/s 144 on 24.09.2021, making addition of ₹4.48 crore u/s 69A as unexplained share trading receipts. The assessee filed her return of income and certain details only on 24.09.2021, i.e., the same day the assessment order was passed.
Before the Tribunal, the assessee challenged the reassessment on multiple legal grounds including lack of jurisdiction under faceless regime, non-issuance of notice u/s 143(2), absence of draft order u/s 144B, and denial of opportunity, besides merits. However, several grounds were either not pressed or had already been restored to the AO by CIT(A) for fresh adjudication.
The ITAT held that:
• Jurisdictional objections and faceless-procedure grounds, having not been pressed, stood dismissed.
• Notice u/s 143(2) could not be faulted where the assessee failed to file the return within the time allowed and filed it only on the date of assessment.
• It was not practically possible for the AO to take cognisance of a return filed on the same day while finalising an ex-parte assessment.
• The assessee failed to adhere to statutory timelines and did not validly object to reopening.
Accordingly, the Tribunal found no infirmity in the reassessment proceedings and dismissed the assessee’s appeal, upholding the validity of the best-judgment reassessment order
FULL TEXT OF THE ORDER OF ITAT MUMBAI
