Soham Estates Vs DCIT (ITAT Mumbai)
Income Tax Appellate Tribunal (ITAT) Mumbai has set aside reassessment orders issued by the Deputy Commissioner of Income Tax (DCIT) against Soham Estates, a partnership firm engaged in builder and developer activities. The tribunal’s decision, covering Assessment Years (AY) 2012-13, 2013-14, and 2014-15, primarily hinges on the tax authorities’ failure to adhere to established legal procedures regarding the disposal of objections raised by the assessee during reassessment proceedings.
The case emerged from a survey conducted under Section 133A of the Income Tax Act, 1961, on Soham Estates’ premises in October 2018. During the survey, it was alleged that two retiring partners, identified as “shell companies” operated by Kolkata-based accommodation entry providers, had introduced capital totaling INR 43.92 Crores between AY 2012-13 and 2017-18. This led to the initiation of reassessment proceedings.
For AY 2012-13, a notice under Section 148 of the Act was issued on November 26, 2018. Soham Estates filed its return of income on December 24, 2018, and subsequently submitted objections to the reopening of the assessment on December 9, 2019, after receiving the recorded reasons on November 7, 2019. However, the Assessing Officer (AO) proceeded to pass a reassessment order on December 25, 2019, under Section 143(3) read with Section 147, making an addition of INR 13.40 Crores under Section 68 of the Act, without issuing a separate order addressing the objections.
