| COURT: | ITAT Mumbai |
| CORAM: | Ashwani Taneja (AM), Joginder Singh (JM) |
| SECTION(S): | 147, 148 |
| GENRE: | Domestic Tax |
| CATCH WORDS: | Reassessment, Reopening |
| COUNSEL: | Girish Dave |
| DATE: | October 14, 2016 (Date of pronouncement) |
| DATE: | December 12, 2016 (Date of publication) |
| AY: | 2006-07, 2007-08 |
| FILE: | Click here to download the file in pdf format |
| CITATION: | |
| S. 147 reopening opens a "Pandora's box" and cannot be done in a casual manner. The reasons cannot be based on mere doubts or with a view to verify basic facts. If the AO takes the view that the income referred to in the reasons has not escaped assessment, he loses jurisdiction to assess other escaped income that comes to his notice during reassessment | |
(i) The Reasons have been recorded on the basis of mere doubts. There were no bases with the AO to allege that too with the support of any cogent material that impugned income was not included by the assessee in its income offered to tax. Reopening of an assessment is not permitted merely on the basis of some notions or presumptions. Nor it is allowed merely for making verification of some basic facts. There must be existence of some tangible material indicating escapement of income. Then only, an AO is permitted to resort to provisions of reopening contained in sections 147 to 151 of the Act. Because, once an assessment is reopened on valid basis, entire pandara’s box is open before the AO. Therefore the AO may then bring to tax not only income escaped from tax which was mentioned in the Reasons recorded, but also any other escaped income that may come to his notice during the course of reassessment proceedings. Reopening of an assessment attacks and pierces the concept of finality of litigation. Therefore, an invalid reopening done in the casual manner and without following parameters of law may cause undue hardship to the taxpayers. Thus, in view of the aforesaid legal discussion and facts of the case before us, we find that AO’s action of continuing with the reassessment proceedings and framing of the impugned reassessment order is contrary to law and facts and, therefore, the same is hereby quashed;
(ii) If in the course of proceedings under section 147 of the Income tax Act, 1961, the Assessing Officer comes to the conclusion that any income chargeable to tax which, according to his “reason to believe” had escaped assessment for any assessment year, did not escape assessment, then the mere fact that the Assessing Officer entertained a reason to believe, albeit even a genuine reason to believe, would not continue to vest him with the jurisdiction to subject to tax any other income chargeable to tax which the Assessing Officer may find to have escaped assessment and which may come to his notice subsequently in the course of proceedings under section 147 (CIT vs. Jet Airways 331 ITR 236 (Bom), ACIT vs. Major Deepak Mehta 344 ITR 641, CIT vs. Shri Ram Singh 306 ITR 340, DCIT vs. Takshila Education Society 378 ITR 520 (Pat), CIT vs. Mohmed Juned Dadani 30 taxmann.com 1(Gujarat), Oriental Bank of Commerce vs. Addl. CIT 49 taxmann.com 485 (Delhi) and Ranbaxy Laboratories Ltd vs. CIT 12 taxmann.com 74 (Delhi) followed)
assessee had a single property . it is self occupied as well as partly let out. The assessee claim the entire interest on housing loan paid to bank as deduction U/s 24(b) in asstt year 2014-15 but A o had disallowed half interest as being self occupied