Initiation of reassessment, based on wrong assumption of facts, is bad in law

Joint Lessees of Industrial Estate Vs ITO (ITAT Mumbai)

Facts- The assessee, for the A.Y 2007-08, had not filed the ROI and the A.O. had reason to believe that there is an income escaped the assessment, accordingly, issued the notice u/s 148 of the Act on 27.03.2014 after obtaining the sanction u/s 151 of the Act. Subsequently the notice u/s 143(2) and 142(1) of the Act are issued. In compliance to notice, the assessee has filed the ROI on 02.06.2014. Subsequently, the Ld. AR of the assessee appeared from time to time and submitted the details as called for and the case was discussed. The assessee has filed the objections on the initiation of reassessment proceedings vide letter dated 13.02.2015 and the reply to the objections was provided to the assessee on 18.02.2015.

Conclusion- We considering the facts and circumstances are of the opinion that the reopening is on the wrong assumption of facts and the information received from another assessing officer would not by itself be the basis to have a belief that the income has escaped assessment. Accordingly, we find the reassessment is bad in law and quash the assessment order passed u/s 143(3) r.w.s 147 of the Act.

FULL TEXT OF THE ORDER OF ITAT MUMBAI

The cross appeal is filed by the assessee and revenue against the order of the CIT(A)-32, Mumbai passed u/s 143(3) r.w.s 147 and 250 of the Act.

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