ITO Vs Raj Autos (ITAT Chandigarh)
ITAT Chandigarh held that foundation of reopening of assessment under section 148 of the Income Tax Act based on wrong facts is not justifiable. Hence, reopening of assessment is liable to be quashed.
Facts- Assessee has filed its return of income on 15.09.2016 declaring total income at Rs.12,17,270/-. The assessee at the relevant time was an authorized dealer of Honda since 2012. According to the AO, he has received an information that assessee has deposited a sum of Rs.19,15,47,805/- in its bank account with Indusind Bank. Therefore, he recorded the reasons for re-opening the assessment. AO, thereafter, passed assessment order on 29.03.2022. He made an addition of Rs.16,15,47,810/-.
In appeal to the CIT(A), this addition on quantum has been deleted but re-opening has been upheld. The Revenue in its appeal is challenging this deletion of Rs.16,15,47,810/- whereas assessee in its Cross Objection challenging the re-opening of assessment.
Conclusion- Held that total turnover during the year was around Rs.16.31 Cr and the assessee has made deposits of Rs.10,14,63,750/-. Thus, it would indicate that ld. AO has not applied his mind on the information uploaded on insight Portal of Department vis-à-vis assessment record of the assessee. He simply treated such an information as a gospel truth and recorded the reasons that income of the assessee has escaped to the extent of Rs.19.75 Cr. We fail to understand from where these figures have been analyzed by the AO. Thus, the foundation of the reasons is based on conceivement of wrong facts. There is no live nexus between the real acts of assessee’s return for this assessment year vis-à-vis alleged information possessed by the AO. This re-opening is not justifiable. The ld. CIT(A) has erred in not quashing the assessment on this issue also.
