2024 (11) TMI 1470 - AT - Income Tax

Validity of the reopening of assessment - additions from sale of shares and section 69C commission addition on estimation - HELD THAT - It emerges from a perusal of the AO s discussion that he had set into motion section 148/147 in order to verify the corresponding transactions of Rs. 57.70 lakhs. This clinching fact has gone unrebutted from the Revenue s side. We hereby quote Manzil Dinesh Kumar Shah 2018 (5) TMI 1176 - GUJARAT HIGH COURT and Maheshwari Devi 2022 (11) TMI 1117 - JHARKHAND HIGH COURT to conclude that such a recourse to 148/147 proceedings for the purpose of verification only is not sustainable in law. The impugned reopening stands quashed in very terms. Assessee s appeal is allowed.

Summary

The Appellate Tribunal (ITAT Delhi) in the appeal for AY 2011-12 against the reopening order issued by the National Faceless Appeal Centre (INFAC) under section 250 of the Income-tax Act, 1961, examined the validity of the reopening and related additions. The Assessing Officer initiated proceedings under sections 148/147 solely to verify transactions amounting to Rs. 57.70 lakhs. The Tribunal, relying on PCIT v. Manzil Dinesh Kumar Shah (2018) 406 ITR 306 (Guj.) and PCIT v. Maheshwari Devi (2023) 454 ITR 755 (Jharkhand), held that reopening assessments merely for verification purposes is "not sustainable in law." Consequently, the impugned reopening was quashed, rendering all other merit-based contentions academic. The appeal was allowed accordingly.