Katragadda Ramesh Vs ACIT (ITAT Hyderabad)
Hyderabad ITAT: Assessee Cannot Reduce Income in Section 148 Return by Correcting Alleged Mistakes in Original Return
The Hyderabad ITAT dismissed the assessee’s appeal and upheld the addition after holding that reassessment proceedings under Sections 147/148 cannot be used to reduce income voluntarily disclosed in the original return by claiming an inadvertent mistake. The assessee had originally disclosed rental income from five properties in the return filed under Section 139(1) but, in response to a notice under Section 148 issued after a search, reduced the house property income by claiming that part of the rental income related to his wife’s properties or her share in jointly owned properties. The Tribunal noted that the CIT(A) found no cogent documentary evidence establishing the ownership pattern, the assessee’s share, or the correctness of the revised computation, and also observed discrepancies regarding the number of properties, tenants and rental receipts. Relying on the Supreme Court decision in CIT v. Sun Engineering Works (P.) Ltd. and the decisions of the Karnataka High Court in CIT v. Sangeetha Granites Ltd. and the Bombay High Court in CIT v. Jai Hind Cooperative Society Ltd., the Tribunal held that reassessment proceedings are confined to escaped income and cannot be converted into proceedings for revising or reopening concluded matters unrelated to escaped income. Accordingly, the CIT(A)’s order was upheld and the appeal was dismissed.
