HMG Engineering Pvt. Ltd. Vs ITO (ITAT Mumbai)
Income Tax Appellate Tribunal (ITAT), Mumbai Bench, has ruled that reassessment proceedings initiated more than four years after the relevant assessment year are legally invalid if based solely on facts already available to the Assessing Officer (AO) during the original assessment. The Tribunal quashed a reassessment order against HMG Engineering Pvt. Ltd. for Assessment Year 2012-13, concluding that the AO had reopened the case without any new material or evidence, merely re-examining information previously provided by the assessee.
The appeal was filed by HMG Engineering Pvt. Ltd. against an order dated March 30, 2024, by the National Faceless Appeal Centre (NFAC), Delhi, which had upheld the reassessment. The core of the assessee’s grievance was that the reassessment proceedings were initiated on the same set of facts that were already available and considered during the original assessment.
Case Background:
HMG Engineering Pvt. Ltd. had filed its income tax return electronically on September 30, 2012, declaring a loss of Rs. 6,95,332/- for Assessment Year 2012-13. The original assessment was completed under Section 143(3) of the Income-tax Act, 1961, on March 16, 2015. During this original assessment, the AO determined the total assessed income at Rs. 23,04,668/-, notably after making an ad-hoc addition of Rs. 30,00,000/- on account of sundry creditors. This indicates that the issue of sundry creditors was indeed examined and addressed at the initial stage.
