Shri Prahalad Singh Vs ITO (ITAT Delhi)
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) allowed the assessee’s appeal and quashed the reassessment proceedings initiated under Sections 147 and 148 of the Income-tax Act, 1961, for Assessment Year 2011-12.
The assessee had originally filed a return of income on 18 September 2012 declaring total income of ₹11,83,380. Subsequently, the Assessing Officer (AO) received information that the assessee had sold land situated at Village Kadarpur, Tehsil Sohna, along with other co-owners, for a total consideration of ₹30.24 crore. The AO noted that the assessee’s share amounted to ₹8.43 crore and formed a belief that capital gains had escaped assessment since no such gains had been disclosed in the return of income. Consequently, a notice under Section 148 was issued on 29 October 2014, followed by reassessment proceedings culminating in an assessment under Section 143(3) read with Section 147, determining the assessee’s income at ₹8.28 crore.
Before the CIT(A), the assessee challenged the validity of the reassessment on the grounds that the reasons recorded for reopening were unsigned and that there was no material to justify the belief that income had escaped assessment. The CIT(A) rejected these objections.
The Tribunal examined the copy of the reasons recorded for reopening and observed that the document was not signed by the Assessing Officer. Relying upon judicial precedents, including decisions of the Punjab and Haryana High Court, Calcutta High Court, and Madhya Pradesh High Court, the Tribunal held that the issuance of an unsigned notice or the recording of unsigned reasons constituted a serious defect affecting jurisdiction. It further held that such a defect could not be treated as a mere technical irregularity curable under Section 292B of the Act.
