DCIT Vs Ghanshyam Rasiklal Shah (ITAT Mumbai)
The Revenue filed an appeal and the assessee filed a cross-objection against the order of the National Faceless Appeal Centre (NFAC) for Assessment Year 2012-13. The impugned order arose from the assessment completed under Section 143(3) read with Section 147 of the Income-tax Act, 1961.
The case originated from a search conducted under Section 132 in the case of the Ameya Group of Virar on 31 July 2014. During the search, documents relating to alleged cash transactions involving the assessee were seized. Based on information received from the Deputy Director of Income-tax (Investigation), Thane, the Assessing Officer reopened the assessee’s assessment under Section 147. The assessment resulted in additions under Section 69A, including additions based on a seized Memorandum of Understanding with the Ameya Group, alleged cash transactions, cash loan and interest thereon. While the Commissioner (Appeals) rejected the assessee’s legal challenge to the reopening, the appeal was partly allowed on merits. Aggrieved by the relief granted on merits, the Revenue preferred an appeal, whereas the assessee challenged the jurisdiction through a cross-objection.
Before the Tribunal, the assessee first challenged the validity of the reassessment proceedings. It was submitted that the entire reopening was founded exclusively on documents seized during the search conducted on the Ameya Group. Since the assessee was an “other person” in relation to the search, it was argued that proceedings ought to have been initiated under Section 153C and not under Sections 147 and 148. The assessee further contended that the reasons recorded for reopening referred to alleged cash receipts, whereas the assessment ultimately made additions on account of alleged cash payments, thereby departing from the recorded reasons. It was also argued that the Assessing Officer had mechanically relied upon information received from the Investigation Wing without independently examining the seized material or forming the requisite belief regarding escapement of income.
