Whether mentioning of wrong date and wrong returned income in reasons is fatal to section 148 proceedings?
Respected Members
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Short note of today's case law for quick reference:
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[2024} 116 ITR (Trib) S.N. 59 (Chandigarh A – Bench)
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1. Kissan Fats Ltd.
2. BCL Industries Ltd.
V.
Deputy Commissioner of Income Tax
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A.D. Jain (Vice President) and Krinwant Sahay (AM)
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01.07.2024?????
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1. For A.Y. 2011-12, the case of assessee engaged in the business of manufacturing vanaspati ghee and refined oils, was re-opened and reasons recorded therefore.
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2. The assessee contended that the entire re-assessment proceedings, culminating in the order, were to be quashed, since in the reasons recorded, the A.O. had wrongly stated that the return of income for the year under consideration was filed on 30.09.2010 declaring a certain income, while the return for that year was filed on 28.09.2011, declaring NIL income.
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3. However, the department was of the view that the date of filing of return and the income returned by the assessee were inadvertently wrongly stated due to a typographical error, which did not vitiate the reasons recorded by the A.O. to form his belief to escapement of income.
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4.? It was held that it was trite that reasons recorded were to be read as they were.
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5. In the present case, the reasons recorded were factually incorrect which could not have led the A.O. to arrive at a valid satisfaction that income for the year under consideration has escaped assessment.
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6. The plea of the Department that the recording of wrong facts by the A.O. was an inadvertent mistake, was of no avail and did not validate the recorded reasons.
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7. The entire re-assessment proceedings, culminating in the order under appeal were quashed as void-ab-initio.
Direct taxes- Income Tax Assistant Commissioner (VR) and MOF Oman
1 周Reopening of Assessment proceedings is a serious issue and cannot be done in a casual manner or in a cavalier fashion. An Assessment can be reopened only on the basis of the information in the possession of the AO based on which he comes to conclusion that income chargeable to tax has/had escaped Assessment. When the Assessment year/ tax year is wrongly mentioned, and the income declared is incorrectly stated, then the conclusion that for that year income chargeable to tax has escaped tax assessment cannot be sustained. Therefore, there is no nexus between the reasons recorded and the Assessment year for which such income has escaped assessment. Quashing the reopened assessment proceedings is indeed the right decision to arrive at by the Hon ITAT!