Case Law Details
PCIT Vs Gautam Bhalla (Delhi High Court)
Introduction: The Delhi High Court, in the case of PCIT vs. Gautam Bhalla, has delivered a significant ruling, stating that the Assessing Officer (AO) cannot initiate reassessment proceedings against additions that have already been subject to appeal. The appeals in question pertain to Assessment Years 2010-11 and 2011-12, challenging a common order by the Income Tax Appellate Tribunal (ITAT) dated 03.09.2019.
Detailed Analysis: The controversy revolves around reassessment proceedings initiated against the respondent/assessee under Section 148 of the Income Tax Act. The Tribunal quashed these proceedings, relying on the third proviso to Section 147, which limits the AO’s authority to reassess income that is the subject matter of an appeal.
The respondent/assessee, after facing additions under Section 68 of the Act, appealed the CIT(A)’s order. The CIT(A) deleted the additions based on the absence of incriminating material and the completion of assessments. Subsequently, the AO, during the pendency of the appeals, issued notices under Section 148 for reassessment.
The High Court emphasized that the AO cannot reassess matters under appeal. The grounds of appeal in both years were specifically directed towards the additions made under Section 68. The court cited relevant case law, including Commissioner of Income Tax vs. Edward Keventer (Successors) P. Ltd. and Alcatel Lucent France vs. ADIT, supporting the principle that the grounds of appeal determine the scope of reassessment limitations.
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