Sanjay Rawat Vs ACIT (ITAT Dehradun)
Reassessment Quashed – Borrowed Satisfaction & Mechanical Approval Held Invalid – Loose Papers from Third Party Not Sufficient – ITAT Dehradun
The ITAT Dehradun allowed all three appeals of the assessee and quashed reassessment proceedings initiated u/s 147 based solely on loose papers impounded during a third-party survey. The AO had reopened assessments alleging unexplained receipts of ₹1.55 crore and ₹1 crore relying on entries in loose sheets .
The Tribunal held that reopening was based on borrowed satisfaction from investigation wing information without independent enquiry. It observed contradictions in the PCIT’s stand — while granting approval u/s 151, entries were linked to the assessee, but before the Settlement Commission the same entries were stated to pertain to another person. The Tribunal also noted that presumption u/s 132(4A)/292C applies only to the person from whose possession documents are seized, not to a third party. The image on page 10 reproduces the statement of the third person admitting lack of knowledge about the entries, weakening the Revenue’s case.
Relying on PCIT vs Meenakshi Overseas and CIT vs Anil Khandelwal, it held that reopening based on loose papers without corroborative evidence and with mechanical approval is invalid. Consequently, reassessment orders for AY 2015-16 & AY 2013-14 were quashed and the related penalty u/s 271(1)(c) was also deleted.
FULL TEXT OF THE ORDER OF ITAT DEHRADUN
These three appeals are filed by the assessee against the separate orders dated 16.04.2024, 19.04.2024 & 16.04.2024 of Ld. Commissioner of Income Tax (A)-3, Noida [“Ld. CIT(A)”] passed u/s 250 of the Income Tax Act, 1961 [“the Act”] arising from the different orders, all dated 17.02.2021 passed u/s 147/143(3) of the Act for Assessment Years 2015-16, 2013-14 & passed u/s 271(1(c) of the Act for AY 2013-14 respectively.
