Ravindra Kumar Gupta Vs ITO (ITAT Hyderabad)
ITAT Quashes Reassessment: AO Reopened Case on Wrong Assumption That Assessee Was a Non-Filer
The Hyderabad ITAT quashed the entire reassessment proceedings after finding that the Assessing Officer had reopened the assessment on a factually incorrect assumption that the assessee had not filed a return of income. The Tribunal noted that while recording reasons for reopening under section 147, the Assessing Officer specifically stated that the assessee was a “non-filer”. However, the records clearly showed that the assessee had already filed his return of income for AY 2014-15 on 28.07.2014 under section 139.
The Tribunal held that once the very foundation of the “reason to believe” was based on an incorrect fact, the reassessment proceedings suffered from non-application of mind. Jurisdiction under section 147 can be assumed only after proper application of mind to the material available on record. Where the reasons recorded are founded on a demonstrably erroneous factual premise, the notice issued under section 148 cannot survive in law.
Relying on the decision of the Gujarat High Court in Mumtaz Haji Mohamad Memon v. ITO (408 ITR 268), the Tribunal observed that reassessment proceedings initiated on incorrect factual assumptions are invalid. Since the Assessing Officer proceeded on the mistaken belief that the assessee was a non-filer despite the return already being on record, the notice issued under section 148 was held to be invalid and the consequential reassessment order was quashed.
