Arjun Singh Sahi Vs DCIT/ACIT (ITAT Dehradun)
The appeal for Assessment Year 2017-18 arose from reassessment proceedings initiated under Sections 147 and 148 of the Income-tax Act, 1961. The assessee, an individual, was apprehended by police authorities on 13.01.2017 with cash of Rs.10 lakhs, which was seized on the same date. He filed his original return under Section 139(1) on 28.07.2017 and a revised return under Section 139(5) on 08.09.2017. The Assessing Officer (AO) subsequently issued a notice under Section 153A on 16.10.2018, which was dropped on 05.07.2019. Thereafter, the AO issued a reopening notice under Section 148 on 14.10.2019, culminating in a reassessment order dated 27.01.2021, wherein Rs.10 lakhs was added as unexplained income under Section 69A read with Section 115BBE. The addition was upheld by the CIT(A).
Before the Tribunal, the primary issue was the validity of the reopening. It was noted that Assessment Year 2017-18 was the year of search or requisition. The Tribunal observed that Section 153A(1)(b) applies to assessment years immediately preceding the assessment year relevant to the year of search or requisition. Therefore, the impugned assessment year could not be proceeded against under Section 153A. Further, the Tribunal held that the lower authorities could not initiate proceedings under Sections 147/148, as the assessee could have been assessed under the normal provisions of Section 143(3), since the cash had already been seized in the relevant financial year. The Revenue’s contention that the seized cash did not form part of the pending assessment was rejected. The Tribunal concluded that the reopening was not sustainable in law and quashed the reassessment. Other issues were rendered academic. The appeal was allowed.
