The New Delhi bench of the Income Tax Appellate Tribunal (ITAT) held that the reopening of assessment proceedings under Section 147 of the Income Tax Act 1961 beyond the period of 4 years was not valid.
Arun Kumar Aggarwal, the appellant assessee was engaged in the business of trading and chemicals in the name of M/s Arco Chem. The issue was reopened by issuing notice under Section 148 of the Income Tax Act by the assessing officer due to frequent high-value cash deposits and transfer of credit and the assessee objected to an assessment order passed under Section 147/143(3) of the Income Tax Act, 1961, and the Commissioner of Income Tax (Appeals) restricted the addition of bogus purchase. Thus the assessee appealed against the order passed by the commissioner.
Shri K. Sampath and Shri. V. Rajkuamr, the counsel for the assessee contended that the notice issued under Section 148 of the Income Tax Act was without jurisdiction and barred by limitation.
Shri Kanv Bali, the counsel for the respondent contended that the notice under Section 148 of the Income Tax Act, 1961 was issued in accordance with the provisions of the Act and re-assessment proceedings had been initiated to achieve the true object of the Act.
The two-member bench comprising Shri Yogesh Kumar U.S (Judicial Member) and Shri Anil Chaturvedi (Accountant Member) held that the present appeal relied on various judicial pronouncements to support the contention that the reassessment proceedings initiated beyond four years from the end of the relevant assessment year were not valid in terms of proviso to Section 147 of the Income Tax Act while allowing the appeal.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
