Bhageria Finance & Investment Private Limited Vs ITO (ITAT Delhi)
AO wrongly invoked Explanation 2(b) instead of 2(c) to Section 147 despite completed assessment under 143(3); non‑application of mind – Assessment quashed
In the case of assessee (AY 2012-13), the assessee challenged the reassessment proceedings initiated under Section 147/148 of the Income Tax Act. The core issue was that the Assessing Officer wrongly invoked Explanation 2(b) (applicable where no assessment has been made) despite the fact that a regular assessment under Section 143(3) had already been completed. The correct provision in such circumstances was Explanation 2(c), which deals with underassessment, excessive relief, or allowances in COMPLETED ASSESSMENTS. The Tribunal observed that this misapplication reflected non-application of mind by both the AO and sanctioning authorities, thereby vitiating the jurisdictional precondition for reopening. Consequently, the ITAT quashed the reassessment proceedings, allowing the assessee’s appeal.
FULL TEXT OF THE ORDER OF ITAT DELHI
The instant appeal filed by the assessee is directed against the order dated 05.09.2023 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), [hereinafter referred to as ‘the Ld. CIT(A)] against the assessment order passed u/s 147 r. w. section 143(3) of the Income Tax Act, 1961 (hereinafter referred as ‘the Act’) for Assessment Year 2012-13.
