CEC-ITD CEM TPL Joint Venture Vs DCIT (ITAT Mumbai)
Reassessment Proceedings Quashed: ITAT Mumbai holds AO failed to provide material under section 148A
Mumbai ITAT, in a group of cross appeals involving CEC-ITD CEM TPL Joint Venture for AYs 2017-18 to 2022-23, quashed reassessment proceedings initiated u/s148A for AYs 2017-18 to 2019-20. Reassessment notices were held invalid primarily due to non-compliance with procedural safeguards mandated u/s148A.
Violation of Section 148A(b) Procedure: AO failed to provide material or information supporting the alleged escapement of income of ₹97.11 lakhs (AY 2017-18) & similar figures in other years. Tribunal held that issuing a notice without sharing the underlying material violates the principle laid down in UOI v. Rajeev Bansal (SC) & Anurag Gupta v. ITO(Bombay HC).
Non-consideration of Assessee’s Response: Despite a detailed reply from Assessee explaining the nature of “contingency expenses,” the AO proceeded mechanically without addressing or rebutting the submission. Tribunal held that this violated the mandate of Section 148A(c).
New Grounds in 148A(d) Order: AO relied on fresh materials & survey statements (e.g., SOP violations, shell entities) in the 148A(d) order which were not part of the show cause under 148A(b). ITAT cited the Delhi High Court’s ruling in Tosca Master v. DCIT to hold that reassessment cannot be justified based on new grounds not initially disclosed.
