Mithilesh Jagdeo Singh Pawar Vs ITO (ITAT Mumbai)
Contradictory Reasons Fatal – AO’s Reassessment Held Void Ab Initio- Change of Opinion Not Permissible – Tribunal Cancels 147 Proceedings
ITAT Nagpur quashed reassessment proceedings initiated u/s 147 as invalid & void ab initio. Assessee had filed return declaring income of Rs. 4,07,450/-, which was scrutinised u/s 143(3) vide order dated 26.12.2019, wherein AO accepted the return. Later, on receiving information about cash deposit of Rs. 16,43,600/- during demonetisation in Janata Sahakari Bank, Amaravati, AO reopened the case u/s 147, alleging unexplained investment u/s 69A.
Assessee contended that the same issue of demonetisation deposits was already enquired during original scrutiny proceedings, where audited accounts, cash book & explanations were filed & considered by AO before accepting return. Hence, reopening amounted to mere change of opinion. CIT(A) however, upheld the reassessment & addition.
Before Tribunal, the Ld. Amicus Curie pointed out contradiction in AO’s own findings. While recording reasons, AO stated that no scrutiny u/s 143(3) was conducted earlier & return was only processed u/s 143(1). Yet, in reassessment order, AO admitted that scrutiny u/s 143(3) was completed on 26.12.2019 but claimed the cash deposit issue was not discussed. Tribunal noted that AO had indeed raised queries about cash deposits vide notice u/s 142(1) during original proceedings, which were duly replied with supporting documents. Once an issue is queried & answered in original scrutiny, it is deemed to have been examined, even if not specifically mentioned in order, as held by Bombay HC in DK Reality India Pvt. Ltd. Vs. ACIT (W.P. No. 2102/2022, dated 15.02.2023).
