U. S. Reality Pvt. Ltd. Vs DCIT (ITAT Mumbai)
Chronology Mismatch Strikes at Jurisdiction: ITAT Mumbai Sets Aside CIT(A) Order & Remands Matter for Fresh Adjudication
The Mumbai ITAT allowed the appeal of M/s U.S. Reality Pvt. Ltd. for AY 2010-11 for statistical purposes and set aside the order of the CIT(A) due to serious factual and chronological inconsistencies in the appellate order.
The Tribunal found that the CIT(A), while upholding the assessment and special audit u/s 142(2A), proceeded on a reconstructed timeline of statutory notices—including notice u/s 148, filing of return, and issuance of notices u/s 143(2) & 142(1)—which was not borne out from the assessment order or assessment records. Notably, the assessment order did not even record issuance of notice u/s 148, whereas the CIT(A) assumed reopening based on such notice, leading to a fundamental factual disconnect.
The ITAT highlighted a glaring anomaly where the return was shown as filed prior to the alleged issue of notice u/s 148, an inconsistency that goes to the root of the validity of proceedings and cannot be brushed aside as a clerical error. Since issues like validity of special audit, adequacy of opportunity, and legality of assessment are entirely dependent on the correct chronology of notices, the Tribunal held that adjudication on an incorrect factual premise is unsustainable.
Accordingly, the impugned order of the CIT(A) was set aside, and the matter was restored to the file of the CIT(A) with a direction to reconcile and conclusively determine the correct chronology strictly with reference to assessment records, and thereafter adjudicate all issues afresh in accordance with law after granting due opportunity to the Assessee.
The appeal was thus allowed for statistical purposes.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
This appeal is filed by the assessee against the order passed by the Commissioner of Income Tax (Appeals)-24, Mumbai [hereinafter referred to as “CIT(A)”], dated 21.12.2017, for Assessment Year 2010–11, arising out of the assessment order passed by the Assessing Officer under section 143(3) of the Income Tax Act, 1961[hereinafter referred to as “the Act”], dated 28.03.2013.
