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Tax Publishers 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.

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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.