A. Sridevi Vs ITO (Madras High Court)
Madras High Court has dismissed an appeal filed by assessee A. Sridevi, upholding the validity of a second reassessment proceeding initiated by the Income Tax Officer (ITO) for the assessment year 2009-2010. The court’s decision affirms the earlier ruling of the Writ Court and underscores the importance of full and true disclosure of material facts by an assessee, particularly when reassessment notices are issued beyond the standard four-year period.
The case originated from a challenge by A. Sridevi against the ITO’s order dated May 26, 2016, which rejected her objections to reopening the assessment under Section 147 of the Income Tax Act, 1961.
Background of Assessment and Reassessments
A. Sridevi had initially filed her return of income for the assessment year 2008-2009 (relevant to the assessment year 2009-2010) on July 30, 2009, declaring income primarily from other sources. This return was processed under Section 143(1) of the Act, which is a summary assessment without detailed scrutiny.
The first reassessment notice under Section 148 of the Act was issued on February 21, 2011. In response, the assessee requested that her original return be treated as filed in response to this notice. During these proceedings, the assessee was specifically asked to provide details regarding cash deposits in her savings bank account with Axis Bank, Anna Nagar Branch, Chennai. Her authorized representative submitted bank statements and letters on December 21, 2011, December 29, 2011, and December 30, 2011, detailing real estate transactions purportedly undertaken on behalf of a company. Following this, an assessment order was passed on December 30, 2011, adding a shortfall of Rs. 10,50,000 as unexplained income under Section 68 of the Act, relating to cash withdrawals.
