Sanjeev Malhotra v DCIT [ITA No. 6723/Del/2018,
dt. 23-10-2020] : 2020 TaxPub(DT) 4399 (Del.-Trib.)
Sustainability of re-opening under section 147 & 148 --
Summary assessment -- Manually filed revised return ignored by revenue
Facts:
Assessee was a director in a company and returned salary
and house property income. Later, a revised return showing certain capital
losses was also filed manually by assessee for assessment year 2009-10 before
the ITO. Based on certain investigations additions of Rs. 4 crores was
sustained under section 68 by reopening the case of the assessee. This was
upheld in the first appeal. On higher appeal the assessee contested that --
1. The receipt of money of Rs. 4
crores factually was returned in the manually filed revised return on which
assessee sustained a capital loss.
2. Re-opening was thus not
grounded with any concrete reason to believe any income having escaped
assessment as held in Rajesh Jhaveri Stockbrokers (2007) 291 ITR 500 (SC) :
2007 TaxPub(DT) 1257 (SC) even though assessee's was a case of summary
assessment under section 143(1)
3. The revised return was very
much with the revenue.
Held in favour of the assessee that the reopening was bad
as the revised return was very much before the revenue to have not reviewed it
does not confer reopening powers on the assessing officer as it was a reopening
on incorrect facts without application of mind. The addition under section 68
stood dismissed.
Reopening an assessment warrants --
1. Some material or materials
and not mere fancy, imagination, speculation, or suspicion
2. Nexus between such material
and the belief of escapement of income from assessment
3. On application of mind by the
assessing officer to such material
4. An inference based on reason
is drawn by the assessing officer that income has escaped assessment.