Nadia Shahvir Nooreyezdan Vs ITO (ITAT Mumbai)
INSIGHT Portal Data Cannot Trigger Automatic Reopening: Mumbai ITAT Quashes ₹47.33-Lakh Property Addition for Bypassing Section 148A
The assessee purchased an immovable property for ₹1.40 crore, against a stamp-duty value of ₹3.14 crore. Based solely on information generated through the INSIGHT Portal/e-Verification Scheme under Section 135A, the Assessing Officer issued notice under Section 148 without following the procedure prescribed under Section 148A. Following a DVO reference, the property was valued at ₹1.87 crore, and the difference of ₹47.33 lakh was added under Section 56(2)(vii).
The Mumbai ITAT held that portal-generated information merely indicating a valuation mismatch cannot automatically establish escapement of income. The AO must verify the information, conduct an independent enquiry and apply his own mind before assuming reassessment jurisdiction.
The Tribunal noted that the AO had completely bypassed the mandatory safeguards of Section 148A—no enquiry under clause (a), no show-cause notice under clause (b), no consideration of the assessee’s response under clause (c), and no order under clause (d). The conditional observation that information suggesting escapement would be “deemed” to exist if approval were granted also demonstrated borrowed and mechanical satisfaction.
Following the Bombay High Court ruling in Benaifer Vispi Patel v. ITO and the Supreme Court decision in Union of India v. Ashish Agarwal, the Tribunal held that Section 135A cannot override or dispense with Section 148A.
