DCIT Vs Suresh Kumar Banthia (ITAT Kolkata)
ITAT Kolkata Quashes Reassessment: Section 147 Invalid Where Case Falls Under Section 153C
The Kolkata Bench of the ITAT dismissed the Revenue’s appeal and upheld the order of the CIT(A) annulling the reassessment framed under section 147 in the case of Suresh Kumar Banthia (AY 2016-17). The Tribunal held that the reassessment was void ab initio as it was initiated under the wrong provision of law.
The entire basis for reopening the assessment was incriminating material seized during a search conducted on third-party finance brokers (Kasera and Sanwaria). Since the assessee was not the searched person and the alleged material “belonged to” or “related to” him, the only permissible course was to invoke section 153C, which is a special provision having an overriding effect over sections 147/148. Initiation of reassessment under section 147 was therefore jurisdictionally flawed.
The Tribunal further noted that:
- The assessee’s statement recorded during survey, including disclosure of ₹50 crore, was retracted within three days, and no independent corroborative evidence was brought on record.
- The seized documents from brokers did not contain the assessee’s name, nor did the brokers name the assessee in their statements.
- Even on merits, additions of ₹36.65 crore as unexplained cash loans and ₹1.64 crore as interest under section 69A were unsustainable, being based merely on retracted statements and uncorroborated “dumb documents”.
Relying on multiple High Court and Tribunal decisions, the ITAT affirmed that once conditions of section 153C are attracted, jurisdiction under section 147 is ousted. Consequently, the reassessment was rightly annulled, Revenue’s appeal was dismissed, and the assessee’s cross-objection was partly allowed.
FULL TEXT OF THE ORDER OF ITAT KOLKATA
