The ITAT Delhi in Dinesh Babu Saxena Vs. ITO, quashed reassessment proceedings initiated under sections 147/148 after holding that the reopening was founded on a demonstrably incorrect assumption of fact. The Assessing Officer relied on information relating to the purchase of immovable property and proceeded on the premise that the assessee had not filed a return of income for the relevant year. This assumption was factually wrong, as a valid return had been filed within time, a fact even acknowledged by the Assessing Officer in the reassessment order. The Tribunal reiterated that recorded “reasons to believe” are jurisdictional and form the very foundation of reassessment proceedings. If those reasons are based on non-existent or false facts, the entire reassessment collapses and cannot be cured by subsequent realization of the correct position. Accordingly, the reopening and the consequential assessment order were held void ab initio. The decision reinforces strict limits on reassessment powers and emphasizes careful scrutiny of information-based reopenings.
Key Facts
- Reassessment proceedings were initiated under sections 147/148 on the basis of AIR information regarding purchase of immovable property worth ₹63 lakh.
- The sole foundation of reopening was the AO’s assumption that the assessee had not filed a return of income for the relevant assessment year.
- Contrary to this assumption:
- The assessee had filed his return on 26.12.2008, declaring income of ₹3,88,845.
- The AO himself acknowledged the existence of the return in the opening paragraph of the reassessment order.
Condonation of Delay
