The Income Tax Appellate Tribunal (ITAT), Mumbai bench has held that the reopening of assessment based on wrong assumption and information received from another assessing officer shall be treated as invalid.
The Assessing Officer has issued the notice in the year 2014. The assessee claimed that no satisfaction of the Jt.CIT was obtained under section 151 of the Act before the issue of impugned notice and the prior sanction of appropriate authority. Since the issue pertains to A.Y 2007-08, the department was unable to provide the records/material to verify the factual aspects on sanctioning authority.
The Tribunal comprising Shri Pramod Kumar, Vice President & Shri Pavan Kumar Gadale, Judicial Member held that the assessee has filed the return of income for the A.Y.2007-08 in the status of A.O.P. with taxable income of Rs.Nil in compliance to notice u/s148 of the Act.
Quashing the re-assessment order, the Tribunal held that “the AR demonstrated that the income is distributed among the six Joint Lessees with the percentages referred in the assessment order and the shares are determinate and known, which is not disputed by the revenue. Further they have offered the share of income of joint lessees in their hands/assessments with the jurisdictional income authorities. We considering the facts and circumstances are of the opinion that the reopening is on the wrong assumption of facts and the information received from another assessing officer would not by itself be the basis to have a belief that the income has escaped assessment . Accordingly, we find the reassessment is bad in law and quash the assessment order passed u/s 143(3) r.w.s 147 of the Act. Since the legal issue is decided in favour of the assessee and again adjudicating on merits becomes academic and are left open and we allow the grounds of appeal in favour of the assessee.”
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