Return filed with wrong jurisdiction cannot be considered for deciding validity of reopening u/s 148

Return filed with wrong jurisdiction cannot be considered for deciding the validity of reopening u/s 148 as AO’s belief is based on material available with him – ITAT

ABCAUS Case Law Citation
ABCAUS 2368 (2018) 06 ITAT

The instant appeal was filed by the assessee challenging the order passed by the CIT (A) in confirming the validity of the action of the Assessing Officer (AO) in reopening of the assessment u/s 147/148 of the Income Tax Act, 1961 (the Act).

The assessee was an Individual and did not file her return of income for the year under consideration. The AO received AIR information regarding the investment made by the assessee in a property. Accordingly, the AO initiated the proceedings under section 148 of the Act by issuing notice. The re-assessment was completed by the AO after making an addition as Long Term Capital Gain (LTCG).

The assessee challenged the action of the AO before the CIT (A) and also raised the objection against the reopening of the assessment. However, the CIT (A) did not accept the contention of the assessee and upheld the validity of the reopening.   

Before the Tribunal, the assessee submitted that the AO had reopened the assessment on the basis of AIR information regarding the purchase of immovable property. Whereas the assessee had duly explained the source of said investment and further the assessee had filed the return of income for the assessment year under consideration. Therefore, the reasons recorded by the AO did not explain the correct facts and the AO had proceeded to reopen the assessment without application of mind and not considering the facts regarding the return of income furnished by the assessee.

The assessee submitted that the AO had reopened the assessment with a view to verify the purchase of immovable property. Thus the AO misdirected himself in invoking the provisions of section 148 as the correct course of action would have been invoking the provisions of section 143(3) which is the relevant section for verification of the facts of return of income. Hence the reasons recorded by the AO were not sufficient to form the belief that the income assessable to tax has escaped assessment.

The Tribunal noted that the assessee, as per acknowledgement produced before the CIT-A claimed to have filed return of income but it was not filed with the AO who was having the jurisdiction over the assessee but the alleged return was filed with the jurisdiction of other Range.

According to the Tribunal, the AO was having no material or information about the return of income filed by the assessee in wrong jurisdiction and, therefore, the assessee cannot take an excuse of such return of income filed in the jurisdiction of the AO other than the AO having the jurisdiction over the assessee. The CIT (A) had also verified this fact through the remand report called from the AO.

The Tribunal observed that when the return of income was not filed with the AO then the alleged return of income filed with the wrong jurisdiction cannot be considered for the purpose of deciding the validity of reopening as the AO at the time of initiation of proceedings under section 148 has to form the belief on the basis of the material available with the AO which is sufficient for coming to the conclusion that prima facie the income assessable to tax has escaped assessment.

Accordingly, the Tribunal rejected the the objection of the assessee against the reopening of the assessment.

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