ITO Vs Vinod Aggarwal (ITAT Mumbai)
Income Tax Appellate Tribunal (ITAT), Mumbai Bench, in a recent decision, dismissed the appeal filed by the Income Tax Officer (ITO) and allowed the cross-objection of the assessee, Mr. Vinod Aggarwal. The Tribunal’s ruling centered on the invalidity of reassessment proceedings initiated under Section 147 of the Income Tax Act, 1961, citing a critical procedural flaw in obtaining sanction and a denial of natural justice during the assessment process. The judgment also independently found in favor of the assessee on the merits of the addition made.
Background of the Case
The case pertains to the assessment year 2007-08. Mr. Vinod Aggarwal, an individual assessee, had filed his original income tax return on July 31, 2007, declaring a total income of ₹ 8,85,470/-. This return was processed under Section 143(1) of the Act.
Subsequently, the Assessing Officer (AO) received information from the Investigation Wing of the Income Tax Department. This information suggested that the assessee had allegedly paid “on money” amounting to ₹ 79,26,400/- in cash to M/s. Crescendo Associates, a concern of the Hiranandani Group, towards the purchase of a flat.
Based on this information, the AO proceeded to reopen the assessment under Section 147 of the Act and issued a notice under Section 148 to the assessee on March 30, 2014. In response, Mr. Aggarwal requested the AO to treat his originally filed return as the return in response to the notice and also sought the reasons for reopening the assessment.
