Tribunal quashes reassessment orders due to lack of authority and improper application of mind. The Tribunal quashed the reassessment orders as the ACIT lacked authority to transfer the case to the ITO and there was a lack of proper application of ...
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Tribunal quashes reassessment orders due to lack of authority and improper application of mind.
The Tribunal quashed the reassessment orders as the ACIT lacked authority to transfer the case to the ITO and there was a lack of proper application of mind in forming the belief of income escapement. The reassessment was deemed bad in law, resulting in the allowance of both appeals by the assessee.
Issues: Validity of reopening of assessment u/s. 148 of the Income Tax Act.
Analysis: The appeals were filed against two separate orders of the Commissioner of Income Tax (Appeals) contesting the additions made by the Assessing Officer in reassessment under section 147 r.w. section 148 of the Act. The common ground in both appeals was the validity of the reopening of the assessment u/s. 148. The Counsel for the assessee requested to hear this common issue first, which was not objected to by the DR. The notice for reopening was issued by the ACIT, Circle-2, but the assessment order was passed by the ITO, Ward-2(2). The Counsel argued that the ACIT did not have jurisdiction to issue the notice and transfer the case to ITO. The reasons for reopening were based on alleged undisclosed profits from commodity market transactions, which the assessee claimed were included in the return. The DR argued that the ACIT had jurisdiction due to pecuniary reasons and that the assessee did not object within the specified time. However, the Tribunal found that the ACIT did not have the authority to transfer the case to ITO, and the reassessment was based on insufficient application of mind. The Tribunal concluded that the reassessment was bad in law and quashed it, allowing both appeals of the assessee.
In conclusion, the Tribunal held that the reassessment orders were quashed as the ACIT did not have the authority to transfer the case to ITO, and there was a lack of proper application of mind in forming the belief of escapement of income. The reassessment was deemed bad in law, leading to the allowance of both appeals by the assessee.
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