S. 147 : Reassessment- Notice – Recorded reasons stating that the return was not filed – On the facts the assessee had filed the return and informed to the Assessing Officer in response to notice – Reassessment was quashed on the ground that the recorded reason was based on the incorrect facts hence the reassessment is bad in law. [S. 143(3), 148]
The Assessee is a Senior Citizen of 90 years old. The Assessing officer has issued letter NMS for non filling of return of Income for AY. 2010 – 2011. Against the said letter the assessee filed reply stating that he has filed income tax return for AY . 2011 – 2012. The Assessee thereafter received notice under section 148 for AY .2011 – 2012 for reopening of assessment. Assessee filed reply to the Assessing officer to treat return filed on 21/07/2011 as return in response to notice u/s.148 and requested for copy of recorded reasons. The Assessing Officer provided the recorded reasons for reopening of assessment for AY 2011 – 2012 which stated that “Not filed Return of Income”. The Assessing Officer assessed the income of the assessee at Rs.3,08,51,220 as against the retuned income of Rs.3,95,231. On appeal the CIT(A) quashed the reassessment proceedings and not decided the issue on merits. On appeal by the Revenue Honourable Tribunal following the Jurisdictional High Court in Dhiren Anantrai Modi v. ITO (WP No.3224 of 2019 dt.15/12/2021) (Bom)(HC), Deepak Wadhwa v. ACIT (2021 ) 435 ITR 699 (Delhi)(HC) and Mumtaz Haji Mohamad Menon v. ITO (2018 ) 408 ITR 268 (Guj.)(HC) held that notice was issued on the ground that return was not filed which is based on incorrect reasons, when the proof was produced by the assessee with acknowledgment of return filed for the assessment year 2011-12 had not been disputed by the Department. The reasons recorded are based on totally erroneous and incorrect facts and non application of mind. Accordingly the Tribunal held that the entire reopening proceeding conducted by the AO on incorrect facts is bad in law and quashed. (ITA No. 2253/Mum/202 dt. 25/11/2022) (AY 2011 – 2012)
ITO v. Champaklal Mathurdas Mehta, (Mum)(Trib.) www.itatonline.org

[Coram : Hon’ble Shri M. Balaganesh, Accountant Member & Hon’ble Smt. Kavitha Rajagopal, Judicial Member]