2023 (8) TMI 86 - AT - Income Tax

Reopening of assessment u/s 147 - wrong mention of assessment year and financial year - invalid approval granted by the additional commissioner u/s 151 - HELD THAT - It is quite apparent from the perusal of reasons recorded that there has been no application of mind by the AO while recording the reasons as the assessment year and financial year have been mentioned wrongly in para (a) of the reasons recorded. The Ld. AO has stated the financial year as 2011-12 whereas the correct financial year should have been 2010-11. Similarly in the concluding para, Ld. AO has stated that Assessment year involved was 2012-13 instead of 2011-12. In our considered opinion the said mistakes on the part of the AO while recording reasons are fatal and cannot be allowed to be cured even by setting aside the assessment. Even the competent authority u/s. 151 of the Act which is in the present case has accorded the approval in a mechanical manner as he has failed to notice these mistakes while granting approval. In our opinion, the said casual reopening of assessment can not be allowed as by resorting to the reopening of assessment the revenue unsettles the already settled assessment. Appeal of the assessee is allowed.

Summary

Issues Involved:
The judgment involves issues related to an appeal against the order of the Ld.CIT(A) for AY 2011-12. The primary issues raised by the assessee include the ex parte order passed by the Ld. CIT(A), addition of alleged cash deposits, and interest on bank account. Additional grounds of appeal challenge the validity of the reassessment order, reasons recorded for income escaping assessment, non-issuance of notice u/s 143(2), and approval for reopening assessment.

Ex Parte Order and Cash Deposits:
The assessee contested the ex parte order of the Ld. CIT(A) as a violation of natural justice and challenged the addition of Rs. 81,11,000 for alleged cash deposits during AY 2011-12. The Ld. AR argued that these issues were purely legal and should be admitted for adjudication, citing legal precedent to support the claim. The Tribunal admitted these additional grounds for review, emphasizing the legal nature of the issues raised.

Validity of Reassessment Order:
The assessee raised concerns regarding the validity of the reassessment order, arguing that it was void and null due to lack of recorded reasons for income escaping assessment. The Ld. AR highlighted errors in the reasons recorded by the AO and the mechanical approval granted for reopening the assessment. Citing relevant case law, the Tribunal found the errors in the reasons fatal and quashed the reassessment proceedings, allowing the additional grounds raised by the assessee.

Conclusion:
After considering the arguments and evidence presented, the Tribunal allowed the appeal of the assessee, primarily based on the errors in the reasons recorded for reassessment. The judgment emphasized the importance of proper application of mind in such proceedings and upheld the legal rights of the assessee to challenge procedural irregularities. The additional grounds raised by the assessee were admitted and ultimately led to the quashing of the reassessment proceedings.