Case: Deputy Commissioner of Income Tax vs Sovereign Pharma Pvt Ltd, ITAT Pune

Listen to the case summary Deputy Commissioner of Income Tax vs Sovereign Pharma Pvt Ltd, ITAT Pune here

Background:

  • The Assessing Officer (AO) reopened the assessment four years from the end of the relevant assessment year and issued the notice under u/s 148 of the act.
  • During the reassessment, the AO made an addition on account of difference in receipts of sundry debtors.

Section 147: Mandates that the assessment can be reopened inter alia, where the assessee has failed to disclose fully and truly all material facts necessary for assessment for that assessment year.

Assessee’s Argument:

  • The reassessment proceedings are not valid as it is:
    • purely on AO’s change of opinion
    • to cover up alleged deficiencies in the assessment order
    • initiated after reappreciation of material already available with the AO

Tribunal Holding:

  • The AO cannot invoke the provisions of section 148 or 147 to make additions on mere reappreciation of the facts or negligence if documents are already on record.

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Also read: Reassessment proceedings without approval is illegal

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