Assumption Of Jurisdiction Based On Wrong Facts Can't Form Basis For Initiating Reopening: Mumbai ITAT
Pankaj Bajpai
14 July 2024 1:15 PM GMT
The Mumbai ITAT there is no question of concealment of fact when the assessee had itself declared the income in its return which was assumed by the AO to be an escaped income. Hence, the ITAT clarified that assumption of jurisdiction based on wrong facts, cannot form basis for initiating reopening. The Division Bench of Anikesh Banerjee (Judicial Member) and Prashant...
The Mumbai ITAT there is no question of concealment of fact when the assessee had itself declared the income in its return which was assumed by the AO to be an escaped income.
Hence, the ITAT clarified that assumption of jurisdiction based on wrong facts, cannot form basis for initiating reopening.
The Division Bench of Anikesh Banerjee (Judicial Member) and Prashant Maharishi (Accountant Member) observed that “The revenue assumed that the assessee claimed exemption under section 10(10A) or section 10(10D) of the Act in the return of income of the said investment was matured before the stipulated period. The assessee declared this income in the return of income. So accordingly, there is no question of concealment of fact”. (Para 9)
Facts of the case:
The assessment was reopened by issuance of notice u/s 148 and the re-assessment was completed determining total income at Rs.1,32,560,980/- by inter alia making addition of Rs.25,24,428/- on account of maturity of policy “ULIP Market Plus-1”. The assessee declared the maturity in
return of income and treated it as long-term capital loss amount to Rs.3,24,937/-. However, the AO denied the claim of assessee and added back entire amount of Rs 25,24,428/- in assumption of receipt of amount on pre-maturity.
Observations of the Tribunal:
On perusal of the reasons for reopening, the Bench observed that the reopening is made after four years on a wrong assumption of fact.
The Revenue assumed that the assessee claimed exemption u/s 10(10A) or section 10(10D) in the return upon the investment which was matured before the stipulated period, added the Bench.
Therefore, finding that the recorded reason itself is erroneous, the ITAT quashed the reassessment based on wrong assumption of fact and allowed Assessee's appeal.
Counsel for Appellant/ Assessee: J.P.Bairagra & Rupa Nanda
Counsel for Respondent/ Revenue: Manoj Kumar Sinha
Case Title: Laxman Gore Shreshtha verses DCIT
Case Number: ITA 1908 & 1909/Mum/2024
