Case Law Details
Srijal Gupta Vs ITO (ITAT Amritsar)
After a thoughtful observation of the fact of the case we decided that the reopening was made u/s. 148 related to purchase of property amount to Rs.9,53,750/-. But after completion of assessment, the ld. AO had accepted the assessee’s investment and had not added any amount related to source of funds for purchase of property. Suddenly the ld. AO found that assessee is co-owner of M/s. Real Estate. As per the ld. AO, in the account opening form of the firm in the bank the PAN which was mentioned by firm, was not verified from AST Module (IT data base). The ld. AO came in conclusion that PAN of the firm was fake, so the entire deposit in the bank account of the firm is added back as per the profit-sharing ratio of the partners and added back in the partner’s hand. The ld. AO made gross violation of natural justice in this case. Without the assessment of the firm how the amount deposited in account of the firm was added back in the partner’s hand. Further, the ld. AO fully deviated from reason recorded & the addition made in assessment.
The AO recorded the reason which warranted him to hold the belief that the income chargeable to tax has escaped assessment thereafter the ld. AO usurped the jurisdiction to reopen the assessment. When the income is foundation on which he based his belief of escapement of income is absent, so AO’s usurpation of jurisdiction to reopen of assessment is legally untenable & so, null in the eyes of law. So, we quash the reassessment made by the ld. AO without jurisdiction. The addition to amount of Rs. 7,70,385/- be deleted accordingly.
FULL TEXT OF THE ORDER OF ITAT AMRITSAR
The instant appeal is directed against the order of Ld. Commissioner of Income Tax (Appeal)-2, Amritsar {in brevity CIT(A)} bearing appeal no. CIT(A)-2/10016/2014-15,date of order 23.03.2019, passed u/s. 250(6) of the Income Tax Act, 1961 (in brevity of the Act) for the Assessment year 2006-07. The impugned order was originated from the order of Income Tax Officer, Ward-3, Pathankot (in brevity A.O) order passed u/s.143(3)/147 of the Act date of order 20.03.14 .
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