Dev Raj Sharma Vs CIT (Appeals) (ITAT Delhi)
In this case, the assessee challenged the order of the Commissioner of Income Tax (Appeals)/NFAC, which had upheld additions aggregating to ₹84.56 lakh made in a reassessment order. The reassessment proceedings were initiated under Sections 147/148 of the Income Tax Act, 1961 based on information that the assessee had sold an immovable property for ₹12 lakh whereas the circle rate was ₹22.50 lakh, resulting in an addition under Section 50C. Additional additions were also made for cash deposits of ₹20.31 lakh and unexplained investment in mutual funds. The CIT(A) partly accepted the assessee’s explanation regarding investments sourced from maturity of fixed deposits but confirmed the balance additions.
Before the ITAT, the assessee raised additional legal grounds challenging the validity of the reassessment proceedings. The principal contention was that the “reasons to believe” recorded for reopening the assessment and the approval granted under Section 151 were both undated. The assessee argued that there was no evidence to establish that the reasons had been recorded before issuance of the notice under Section 148, as required by law. It was also contended that the approval under Section 151 was granted mechanically, with the approving authority merely recording “Yes” and “Approved” in a pre-typed format without demonstrating independent application of mind.
