Nilesh Bharani Vs DCIT (ITAT Mumbai)
Summary: ITAT Mumbai quashed the reassessment order passed under section 147 for AY 2011-12 as illegal and void ab initio, holding that the jurisdiction to assess the impugned search-based income lay under the mandatory non-obstante provisions of sections 153A and 153C. A search and seizure action under section 132 had been carried out on 06-07/10/2017 in the case of the assessee, who was a partner of M/s Evergreen Enterprises. Before completion of the search assessments for AYs 2012-13 to 2017-18, the ITO issued notice under section 148 on 28.03.2018 for AY 2011-12 on the basis of information received from the Investigation Wing referring to alleged bogus LTCG of Rs. 56,86,529/- and alleged cash-loan transactions.
The reassessment ultimately included additions of Rs. 75,74,28,000/- relating to alleged cash loans, Rs. 56,86,529/- treating LTCG as bogus, Rs. 7,72,56,840/- as estimated undisclosed interest income and Rs. 2,84,326/- under section 69C for alleged commission. The Tribunal held that, after the Finance Act, 2017 amendment, section 153A extended in prescribed circumstances to four additional relevant assessment years beyond the six assessment years preceding the search. Since the material referred to by the Revenue indicated alleged escaped income far exceeding Rs. 50 lakh and included loans and advances, which fall within the statutory meaning of “asset” for the fourth proviso to section 153A, the correct statutory course was reassessment under section 153A and not section 147.
