ITO Vs Bhavneet Kaur Walia (ITAT Chandigarh)
Mechanical Reopening Without Any Evidence – ITAT Upholds Quashing of Entire 147 Proceedings
AO reopened the assessment u/s 147 purely on the basis of an Investigation Wing alert, alleging that Assessee had made undisclosed investment of ₹2,86,42,500 in an immovable property.
Throughout the reassessment proceedings, Assessee repeatedly requested basic details such as:
- Which property?
- Address & description?
- Name of seller?
- Mode of payment?
Shockingly, AO could not provide even a single detail. Despite this, he completed reassessment & made the entire addition u/s 69.
Before CIT(A), Assessee argued that the AO:
- Did not verify the information,
- Acted on borrowed satisfaction,
- Applied no independent mind.
CIT(A) agreed, holding that:
- AO reopened merely on investigation information without checking its correctness.
- No material or evidence of any such property.
- Assessment order was perfunctory & ill-conceived.
Hence, reopening was invalid & the entire 147/148 proceedings were quashed.
Revenue appealed to the ITAT, but even during hearing, when specifically directed by the Bench to produce any document showing the alleged property purchase, the Department failed to show a single piece of evidence.
ITAT observed:
- Law requires independent application of mind before issuing notice u/s 148.
- Mere reproduction of Investigation Wing info is not “reason to believe”.
- When basic facts like property details are unknown, there is no tangible material.
- The Revenue could not rebut the CIT(A)’s findings.
Held:
- Reopening was mechanical & illegal.
- Entire reassessment quashed.
- Deletion of ₹2.86 crore sustained.
FULL TEXT OF THE ORDER OF ITAT CHANDIGARH
