Ravi Nirman Nigam Limited Vs DCIT (ITAT Mumbai)
In, the Income Tax Appellate Tribunal (ITAT), Mumbai, allowed the appeals filed by the assessee for Assessment Years 2010-11 and 2011-12, holding that reassessment proceedings initiated under Section 147 of the Income-tax Act were invalid because the alleged incriminating material originated from a search conducted on another entity, thereby attracting the special procedure under Section 153C. The assessee’s original returns had been processed under Section 143(1). Subsequently, information was received from the ACIT, Central Circle-2(4), Ahmedabad, stating that during a search conducted on M/s. Dharmadev Infrastructure Ltd., several alleged benami bank accounts were identified, including a bank account linked to the assessee containing substantial deposits and cash transactions. Based on this information, the Assessing Officer reopened the assessments under Section 148.
The assessee challenged the reopening on the ground that the reassessment was based entirely on bank statements and documents found during the search proceedings conducted on another party. It was argued that once documents seized during search proceedings pertaining to another person are relied upon, the Assessing Officer can proceed only under Section 153C, which begins with a non-obstante clause overriding Sections 147 and 148. The assessee contended that the reopening under Section 147 was therefore without jurisdiction and void ab initio. The assessee also argued that the bank account was already disclosed in its books and that mere cash deposits could not automatically justify reopening of assessment.
