The ITAT Delhi quashed reassessment orders for three assessment years (AY 2011-12, 2015-16, 2016-17) based on fundamental legal flaws. The ruling confirms that reassessments are invalid if initiated on wrong or substituted reasons, if they are time-barred (following the Supreme Court’s concession in the Rajeev Bansal case), or if they proceed without valid statutory sanction from the competent authority.
The Tribunal annulled a reassessment after finding the AO wrongly assumed no return was filed. It held that a notice under Section 148 issued without applying mind is invalid, reinforcing that “reason to believe” must rest on verified facts.
Delhi ITAT declared an entire income tax assessment void ab initio because Assessing Officer, who assumed jurisdiction post-transfer, failed to issue mandatory notice under Section 143(2). This ruling confirms that a fresh jurisdictional notice is compulsory for the new AO to validate the assessment proceedings.
The ITAT Delhi upheld the deletion of a Rs.1.83 crore addition for alleged bogus loans, ruling that uncorroborated WhatsApp chats and retracted search statements cannot override documentary evidence. The Tribunal affirmed the loans were genuine, noting the assessee provided full proof of identity, creditworthiness, and genuineness via audited accounts, bank statements, and TDS on interest paid to the NBFC lenders.
ITAT clarified that absence of ownership transfer at the end of the lease period makes it an operating lease, rejecting Assessing Officer’s treatment of transaction as a financial lease.
The ITAT Delhi set aside the Section 68 addition of Rs.28.14 lakh made on cash deposits during demonetization, ruling that the AO and CIT(A) failed to properly examine the detailed documentary evidence furnished by the assessee. The case was remanded for a fresh, de novo consideration after verifying all sales documents and cash flow.
The ITAT Delhi confirmed the addition of Rs.25.35 lakh as unexplained investment for a house purchase under Section 69, ruling that the assessee failed to discharge the initial onus to prove the creditworthiness and genuineness of loans allegedly received from his mother and sister. The lenders lacked sufficient bank balances, and documentation was incomplete.
The Tribunal upheld the CIT(A)’s exercise of newly amended powers under Section 251(1)(a) to set aside an ex-parte order passed under Section 144. Since the assessee was denied due opportunity, the matter was remanded for reassessment. The ruling clarifies that appellate authorities can now direct fresh assessments where procedural fairness was lacking.
ITAT Delhi held that commission earned by a cooperative society from marketing sugarcane grown by its members qualifies as business income under Section 80P(2)(a)(iii), not as income from other sources.
ITAT Delhi deleted a ₹47 lakh bogus LTCG addition, holding that ‘human probability’ cannot override transactions conducted through stock exchange, demat, and banking channels. Mere high profit does not make a transaction bogus.
