ITAT Upholds Deletion of Re-assessment Order by CIT(A) on ground of Reopening done on Unverified Information [Read Order]

The New Delhi bench of the Income Tax Appellate Tribunal (ITAT) upheld the re-assessment order passed by the assessing officer quashed by the Commissioner of Income Tax (Appeals) on the ground of reopening had been done on unverified information. 

Tarik Tondon, the respondent assessee challenged the reopening of the assessment along with the addition made by the assessing officer. The Commissioner of Income Tax (Appeals) deleted the re-assessment order. 

The revenue appealed against the order passed by the Commissioner of Income Tax (Appeals) for quashing the re-assessment order passed by the assessing officer. 

Vivek Vardhan, the counsel for the revenue contended that the proceedings under section 148 of the Income Tax Act, 1961 were initiated based on information received from a credible source i.e. the Investigation Wing of the Department and Central Circle of New Delhi based on which the assessing officer formed the belief that the income chargeable to tax had escaped assessment. 

It was further submitted that the reopening of assessment proceedings was done as per the law and it was necessary to reopen the assessment proceedings by the assessing officer for the escapement of chargeable tax by the assessee. 

Anil Kumar Gupta and Rahul Arora, the counsels for the assessee contended that the reopening of the case was made by the assessing officer without going through the facts of the case as it was opened purely based on information from the investigation wing without verifying the same. 

It was further submitted that the assessing officer had not given the description of the property and whether the assessee had sold or purchased the property for the addition made by him. 

The bench observed that the reopening of the assessment proceedings had been done on unverified facts by the assessing officer and are liable to be deleted. 

The two-member bench comprising Saktijit Dey (Judicial) and N. K. Billaiya (Accountant) held that the deletion of the re-assessment order of the assessing officer by the Commissioner of Income Tax (Appeals) was as per the law and sustainable while dismissing the appeal filed by the revenue.

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