2017 (4) TMI 1349 - AT - Income Tax

Reopening of assessment - validity of reasons to believe - capital chargeable to tax on sale of property not disclosed - Held that - Assessing Officer has not brought on record which of the property has been sold by the assessee, where the property was situated and whether the assessee was the owner or co-owner of the said property. Even date of the sale and the consideration received by the assessee has not been mentioned. The Assessing Officer must have received copy of the sale deed or the information from the office of the Sub Registrar and on that basis he must have recorded the reasons. The reasons recorded should be selfexplanatory and should not keep the assessee for guessing of the reasons. From these reasons, it is apparent that there is no application of mind on the part of AO while recording the reasons. Quash the reassessment proceedings - Decided in favour of assessee.

Summary

Issues: Validity of proceedings initiated under section 147/148 of the Income-tax Act, 1961

In this case, the appeal was filed by the assessee against the order passed by the ld. CIT(A)-I, Kanpur pertaining to the assessment year 2010-11. The appeal was filed late by 3 days, and the assessee sought condonation of delay, which was granted after hearing both parties. The main issue in this appeal was whether the proceedings initiated under section 147/148 of the Income-tax Act, 1961 were valid. The ld. A.R. of the assessee argued that the reasons recorded by the Assessing Officer were vague and did not show prima facie satisfaction, lacking a direct nexus between the material and the belief of income escaping assessment. On the other hand, the ld. D.R. supported the orders of the authorities below. After considering the arguments and orders, it was noted that the reasons recorded by the Assessing Officer did not specify which property was sold, its location, ownership details, sale date, or consideration received. The reasons were deemed insufficient, lacking application of mind, and the reassessment proceedings were quashed, leading to the cancellation of the assessment made thereon. Consequently, the appeal filed by the assessee was allowed, and the order was pronounced in the open court on 26.4.2017.