Reopening of Assessment Void in absence of corroborating, independent evidence to justify Payment of Interest of Post dated Cheques: ITAT

The Income Tax Appellate Tribunal (Delhi Bench) ruled that the Reopening of Assessment Void in absence of corroborating, independent evidence to justify payment of interest of post dated Cheques (PDCs).

The assessee, Green Park Estate Pvt. Ltd. is one of the group companies of BPTP Ltd. and is engaged in the business relating to Real Estate. The return of income was filed declaring total income. On the basis of certain documents seized during the course of search and seizure action on the BPTP group and its group companies, the assessment proceedings u/s 153A/153C of the Income Tax Act, 1961 were initiated. Subsequently, the Assessing Officer recorded reasons for reopening of assessment and issued notices u/s 148 of the Act. The assessment u/s 147 of the Act was made after making the additions on account of interest on Post Dated Cheques.

The two member bench of Judicial Member Sudhanshu Shrivastava and Accountant Member R.K.Panda while setting aside the reassessment ruled that the action taken by the Assessing Officer for reopening of the assessment u/s 147 of the Act is not sustainable and the same is hereby quashed as being based on seized documents of other assessees and being entirely based on presumption and assumptions and incorrect interpretation of law. 

The Tribunal held that the reassessment as being void ab-initio as the assessment is based on alien material having no specific nexus with the assessee and that there is no corroborating and independent evidence to justify that the assessee had paid interest of PDCs, as alleged by the authorities below.

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