Case Law Details
ITO Vs Champaklal Mathurbhai Mehta (ITAT Mumbai)
ITAT Mumbai held that reopening of assessment was undertaken by AO without application of mind on complete incorrect assumption of fact that no return of income was filed for the relevant Assessment year and hence said reopening of assessment is invalid.
Facts-
Based on information, AO noted that during the year under consideration, the assessee had purchased immovable property to the tune of Rs.2,13,61,851/-. AO had a mistaken opinion that assessee had not filed his return for A.Y.2011-12. Accordingly, since there was financial transaction carried out by the assessee and no return has been filed by the assessee, AO observed that income of the assessee had escaped assessment and sought to reopen the same by issuance of notice u/s.148 of the Act on 31/03/2017 after recording the reasons.
The re-assessment was framed by AO by making certain additions and ultimately the total income was determined at Rs.3,08,51,220/- as against the returned income of Rs.3,95,231/- vide order u/s.143(3)r.w.s. 147 of the Act dated 28/12/2017. The assessee challenged the validity of reopening u/s.147 of the Act before the CIT(A) on the ground that the reopening was made based on incorrect assumption of fact as is evident from the reasons recorded. CIT(A) quashed the re-assessment. Aggrieved, Revenue has preferred this appeal.
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