Anil Jaggi Vs ACIT (ITAT Mumbai)
In a significant ruling, the Income Tax Appellate Tribunal (ITAT) Mumbai has invalidated a reassessment order imposing an addition of ₹2.23 crore as unexplained investments on Anil Jaggi. The Tribunal found that the tax authorities failed to obtain the mandatory approval from the appropriate higher authority before reopening an assessment that had already been completed under Section 143(3) of the Income Tax Act, 1961, and was being reopened after a period of four years.
Case Background
Anil Jaggi, the assessee, originally filed his income tax return for the Assessment Year (A.Y.) 2007-08 on August 10, 2007, declaring an income of ₹89,52,275. This return was initially processed under Section 143(1) and subsequently scrutinized, with the assessment being completed under Section 143(3) on November 19, 2009, assessing his income at ₹91,93,540.
The case was reopened under Section 147 of the Act after the Director General of Income-tax (Inv.), Mumbai, shared information on March 27, 2014. This information, gleaned from search and seizure operations conducted on the Hiranandani Group, suggested that Jaggi had made “on money” payments totaling ₹2,23,00,000 to Lake View Developers, a concern of the Hiranandani Group, for property purchases.
Based on this information, the Assessing Officer (AO) initiated reassessment proceedings. Jaggi requested and received a copy of the “reasons to believe” for the reopening. During the reassessment, the AO asked Jaggi to explain the “on money” payments.
