Case Law Details
Vishram Sahakari Awas Samiti Limited Vs ITO (ITAT Delhi)
In a recent appeal case between Vishram Sahakari Awas Samiti Limited and the Income Tax Officer (ITO) in Delhi, crucial questions regarding the validity of reassessment and the limits thereof were deliberated upon. The case, pertaining to the assessment year 2011-12, revolved around the reassessment initiated by the tax authorities and subsequent additions made to the assessed income.
The Assessee raised several grounds of appeal challenging the legality and jurisdiction of the reassessment proceedings. One of the primary contentions raised was that the reassessment order was without jurisdiction as there was no valid service of notice issued under section 148 of the Income Tax Act. Additionally, the Assessee argued that the Assessing Officer (AO) completed the assessment without furnishing the reasons recorded for reopening the assessment, thus violating statutory requirements.
Crucially, the crux of the dispute rested on the fact that the reasons recorded for reopening the assessment pertained to a specific issue, namely, the source of investment for the purchase of immovable property. However, the AO made no addition on this issue. Instead, an addition was made on an entirely different matter, namely, unexplained receipts from members of the society.
The Tribunal, after careful consideration of the facts and legal precedents, upheld the Assessee’s contention. It emphasized that if no addition is made on the basis of the reasons recorded for reopening the assessment, resorting to Explanation 3 to section 147 of the Act to make an addition on any other issue not included in the reasons to believe for reopening the assessment is impermissible.
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