Multiplicity of Errors in Reasons Make Reassessment Void: ITAT [Read Order]

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) ruled that Multiplicity of Errors in Reasons Make Reassessment Void.

The assessee, M/s Lakhmi Chand Tejoo Mal is aggrieved by the reopening of the assessment under section 147 of the Income Tax Act, 1961.

The assessee vehemently stated that 11 entries have been shown in the information and it can be seen that there are the repetition of the same entries/amounts and the Assessing Officer has considered only 4 entries where the total unsecured loan amount comes to Rs. 75 lakhs and information is in respect of the amount of Rs. 2.05 crores.

The assessee also argued that the Assessing Officer has not applied his mind before issuing notice under section 148 of the Act as it can be seen from the reasons for reopening assessment and additions made in the assessment order.

The two-member bench of Judicial Member Suchitra Kamble and Accountant Member N.K.Billaiya found that in none of the decisions the issue was of the multiplicity of the entries in the information received by the Assessing Officer which formed the basis for reopening the assessment. In all the decisions relied upon by the department, the issue was whether the information received amounts to tangible material evidence for reopening the assessment. Whereas the facts of the case in hand relate to the very information itself which contains 11 entries as mentioned elsewhere, where the total amount of escaped income is mentioned at Rs. 2.05 crores which are part of the reasons recorded for reopening the assessment.

“We are of the considered view that the assumption of jurisdiction by the issue of notice u/s 148 of the Act is bad in law which makes the assessment order dated 18.12.2018 framed u/s 147 r.w.s 143(3) of the Act void ab initio. Since we have quashed the assessment, we do find it necessary to dwell into the merits of the case,” the ITAT said.

To Read the full text of the Order CLICK HERE
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