Kulwant Singh Vs ITO (ITAT Jaipur)
The appeal was filed before the Income Tax Appellate Tribunal (ITAT), Jaipur, challenging the order dated 14.02.2025 passed by the Commissioner of Income Tax (Appeals) under Section 250 of the Income Tax Act, 1961. The assessee contested the validity of reassessment proceedings initiated under Sections 147 and 148, along with additions made and other procedural grounds.
The Assessing Officer (AO) had reopened the assessment based on alleged incriminating material found during a search conducted in the case of a builder. The allegation was that the assessee had paid “on-money” for the purchase of a flat, leading to an addition of ₹6,00,000 as unexplained investment under Section 69B of the Act. This addition was upheld by the CIT(A).
Before the Tribunal, the assessee argued that the reopening of assessment under Section 147 was without jurisdiction. It was contended that where reassessment is based entirely on material found during a search conducted in the case of a third party, the proper legal provision to be invoked is Section 153C and not Section 147.
The Tribunal considered the legal position in light of binding precedents of the jurisdictional Rajasthan High Court. It relied on judicial decisions holding that when the basis of reassessment is incriminating material found during a search on another person, proceedings must be initiated under Section 153C. In such circumstances, reopening under Section 147 is not valid.
