2018 (12) TMI 1874 - AT - Income Tax

Validity of reopening of assessment u/s 147 - HELD THAT - Where the Assessing Officer has reopened the assessment mechanically without application of mind and as well as following the decision of this Tribunal in the case of Narain Dutt Sharma Vs ITO 2018 (4) TMI 427 - ITAT JAIPUR we hold that the reopening of the assessment is not valid and the same is quashed. Since we have quashed the reopening of the assessment and consequential reassessment therefore we do not propose to go into the other grounds regarding the additions sustained by the ld. CIT(A).Appeal of the assessee is allowed.

Summary

Issues Involved:
1. Condonation of delay in filing the appeal.
2. Validity of reopening the assessment under Sections 147/148 of the Income Tax Act, 1961.
3. Confirmation of addition under Section 68 of the Income Tax Act, 1961.

Issue-wise Detailed Analysis:

1. Condonation of Delay in Filing the Appeal:
The appeal by the assessee was delayed by 99 days. The assessee filed an application for condonation of delay, supported by an affidavit explaining the delay due to the death of his brother and his own serious ailments requiring treatment. The tribunal, after hearing both parties and considering the evidence provided, was satisfied with the explanation and condoned the delay, allowing the appeal to proceed.

2. Validity of Reopening the Assessment under Sections 147/148 of the Income Tax Act, 1961:
The primary issue was the validity of the reopening of the assessment. The assessee argued that the reasons recorded for issuing the notice under Section 148 were factually incorrect, as he had filed his return of income, which the Assessing Officer (AO) failed to consider. The AO reopened the assessment based on information about a cash deposit of ?15,20,500/- in the assessee's bank account, assuming no return was filed.

The tribunal found that the AO's statement that the assessee had not filed a return was incorrect, as the return was filed electronically on 05/09/2011. The reopening was deemed mechanical and without independent application of mind, as the AO did not verify the return of income filed by the assessee. The tribunal referred to a similar case, Narain Dutt Sharma Vs ITO, where reopening was quashed under similar circumstances.

The tribunal concluded that the reopening of the assessment was invalid due to the lack of application of mind and incorrect factual basis. Consequently, the reopening and the subsequent reassessment were quashed.

3. Confirmation of Addition under Section 68 of the Income Tax Act, 1961:
Since the tribunal quashed the reopening of the assessment and the consequential reassessment, it did not address the other grounds regarding the additions sustained by the Commissioner of Income Tax (Appeals) [CIT(A)] under Section 68, which dealt with the genuineness of the amount credited in the assessee's bank account.

Conclusion:
The tribunal allowed the appeal of the assessee, quashing the reopening of the assessment and the consequential reassessment. The order was pronounced in the open court on 20th December 2018.