ITO Vs Bharat Bhushan (ITAT Delhi)
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) dismissed the Revenue’s appeal and upheld the order of the Commissioner of Income Tax (Appeals) [CIT(A)] remanding the matter to the Assessing Officer (AO) for fresh adjudication. The dispute centred on whether the CIT(A) had the authority to set aside the reassessment order and refer the case back to the AO in circumstances where the reassessment had effectively assumed the character of a best judgment assessment.
The assessee had not originally filed a return of income under Section 139(1) of the Income Tax Act. The case was selected for reassessment based on information available on the Insight Portal under the Risk Management System relating to non-filing of returns. The information indicated credit card payments aggregating to Rs.13,59,188, payments reflected in TDS statements amounting to Rs.229, and cash deposits in a Yes Bank account amounting to Rs.11,64,600, resulting in total transactions of Rs.25,24,017.
Pursuant to a notice issued under Section 148 dated 7 March 2024, the assessee filed a return of income on 12 August 2024 declaring income of Rs.2,43,430. During the reassessment proceedings, notices under Sections 143(2) and 142(1) were issued. Although the assessee furnished partial responses and stated that he was engaged in the sale of Amway products, did not maintain books of account, deposited cash sales into bank accounts, and made credit card payments from cash sales and loans obtained from banks and non-banking financial companies, complete compliance was not made.
