Sukhbir S. Dagar Vs ITO (Delhi High Court)
New Delhi: The Delhi High Court has set aside a reassessment order and the corresponding ruling of the Income Tax Appellate Tribunal (ITAT), holding that the reassessment proceedings were initiated without the mandatory approval of the appropriate authority as required by the Income Tax Act, 1961. The judgment underscores the critical importance of obtaining the correct statutory sanction for issuing notices to reopen concluded assessments, particularly after a significant period has elapsed.
The case, involving taxpayer Sukhbir S. Dagar and the Income Tax Officer (ITO), pertained to the Assessment Year (AY) 2006-07. The assessee had originally filed his return of income for this year on October 30, 2006, and subsequently a revised return on September 21, 2007. The initial return was selected for scrutiny, and a notice under Section 143(2) of the Act was duly issued.
During the original assessment proceedings, the Assessing Officer (AO) specifically examined the capital gains disclosed by the assessee from the sale of agricultural land. The assessee had reported receiving ₹21,87,500 as consideration for his fifty percent share of the land and had also provided a registered valuer’s report concerning the cost of acquisition. After scrutinizing the furnished documents, the AO completed the assessment under Section 143(3) of the Act on December 30, 2008, accepting the income declared by the assessee.
