Non filing of ITR: ITAT upholds Reassessment Proceedings [Read Order]

The Ahmedabad bench of Income Tax Appellate Tribunal ( ITAT ) upheld the reassessment proceedings after finding that the assessee did not file the income tax return.

The Assessee Shivam Developers is a partnership-firm engaged in the business of real estate development. As per the information available with the I&CI Wing of Department, it was found that the assessee had purchased non-agricultural land for Rs.1.10 Crore and the value assessed for the purpose of stamp duty was Rs.6,47,14,285/- No Income tax return was filed by the assessee.

Accordingly notice under Section 148 of the Income Tax Act was issued to the assessee. in response to which the assessee filed a return. During the course of assessment proceedings, the AO asked the assessee to explain the source of investment amounting to Rs.1,42,81,250/-. In response to which the assessee, vide reply dated 11.09.2017, furnished the source thereof by way partners’ capital, unsecured loan and booking advance from customers.

After considering this the AO made an addition of Rs.60,31,250/- under section 69C of the Act and passed a reassessment order.

Aggrieved by the Reassessment order the assessee filed another appeal before the CIT(A), who uphold the addition. Hence the assessee filed another appeal before the tribunal. 

Hardik Vora, the counsel for assessee submitted that the CIT(A) has erred in upholding the reassessment proceedings under section 148 of the Income Tax Act. He argued that the AO has failed in giving the exact reason for reopening the assessment and the reasons which the assessee came to the knowledge of the assessee from the assessment order are vague in nature.

Ashesh R. Rewar,counsel for revenue, supported the order of lower authorities and argued that the case was initially selected for scrutiny since there was a huge difference in agreement value of the land and the value for the purpose of stamp duty. As the assessee was non-filer, the Assessing Officer under prima-facie belief that the income has escaped assessment, the notice was sent under Section 148 of the Income Tax  Act

After reviewing the facts the ITAT bench of Siddhartha Nautiyal (Judicial Member) and Makarand V. Mahadeokar (Accountant Member) upheld the reassessment proceedings after finding that the assessee did not file the income tax return.

To Read the full text of the Order CLICK HERE

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