Reassessment Quashed – No Addition on Original Reason for Reopening

ACIT Vs Somani Services Private Limited (ITAT Kolkata)

The ITAT Kolkata dismissed the Revenue’s appeal and upheld the CIT(A)’s order quashing reassessment proceedings where the AO failed to make any addition on the issue for which the case was originally reopened. The reassessment was initiated alleging receipt of ₹2.50 crore from Eastern Navigation & Logistics Pvt. Ltd., but in the final order no addition was made on that issue; instead, additions u/s 68 were made for transactions with other parties. Following judicial precedents such as Jet Airways and Ranbaxy Laboratories, the Tribunal held that if the income forming the basis of “reason to believe” is not assessed, the AO cannot independently make additions on other issues without fresh notice u/s 148. Accordingly, the reassessment was held invalid and Revenue’s appeal was dismissed.

FULL TEXT OF THE ORDER OF ITAT KOLKATA

This appeal filed by the Revenue is against the order of the Commissioner of Income Tax (Appeals)-20, Kolkata [hereinafter referred to as Ld. ‘CIT(A)’] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for AY 2013-14 dated 30.08.2024.

1.1 The Registry has mentioned that the appeal is barred by limitation by 39 days for which the Revenue has filed a petition along with an affidavit for condonation of delay of 42 days in filing the appeal before the Hon’ble ITAT explaining the reasons that the appeal order was received on 30.08.2024 and on 25.09.2024 the Appeal Scrutiny Report of this group and others including the present case was submitted. It was also submitted that the Assessing Officer as well as the PCIT were engaged in section 148 related time barring matters introduced by the Union Budget Finance (No.2) Bill, 2024 and also due to the annual general transfer, the appeal could not be filed in time and it has been requested to condone the delay. After perusing the same, we are satisfied that the Revenue had a reasonable and sufficient cause and was prevented from filing the instant appeal within the statutory time limit. We, therefore, condone the delay and admit the appeal for adjudication.