Gajender Kumar Vs ITO (ITAT Delhi)
Income Tax Appellate Tribunal (ITAT), Delhi bench, has overturned reassessment orders issued against individual taxpayer Gajender Kumar for the Assessment Years 2012-13 and 2013-14. The tribunal ruled that the tax department’s initiation of reassessment proceedings was invalid because it lacked proper “reason to believe” that income had escaped assessment.
The appeals arose from orders passed by the National Faceless Appeal Centre (NFAC), which had upheld assessments made by the Assessing Officer (AO) under the reassessment provisions (Section 147 read with Section 144) of the Income-tax Act, 1961. Both assessment years involved identical issues, leading the ITAT to issue a common order.
The core of the dispute lay in the validity of the notice issued under Section 148 to reopen the assessments. For AY 2012-13, the assessee had not filed a return of income. The AO initiated the reassessment process based on information indicating cash deposits totalling Rs. 25,89,000 in the assessee’s bank account with Nainital Bank Ltd. The AO recorded reasons for reopening, stating that this amount of income had escaped assessment, and subsequently obtained approval from the Principal Commissioner of Income Tax (PCIT) before issuing the Section 148 notice on March 29, 2019.
