This case ITA No. 1076/Del/2019 addresses the appeal by Tara Chand against the order by the ITO, Ward 62(4), New Delhi concerning the reassessment for the assessment year 2010-11, which was initially pronounced on December 20, 2019.
The case revolves around the reopening of the assessment under Section 147 of the Income Tax Act, which Tara Chand argued was done without proper compliance with statutory conditions. The primary issue was the addition of Rs. 10,00,000 to the income, alleged to be from undisclosed cash deposits in a bank account.
The tribunal heard arguments regarding the appropriateness of the reopening of the assessment, the adequacy of the reasons provided by the AO for the reopening, and the sufficiency of the evidence supporting the source of cash deposits. Tara Chand contested that the reopening and the consequent reassessment lacked proper basis and were not executed with due diligence as required by law.
The Income Tax Appellate Tribunal, led by Judicial Member Shri H.S. Sidhu, after reviewing the submissions and evidence, decided to delete the addition of Rs. 10,00,000, citing that the appellant had substantiated the source of the cash deposits adequately through sales of stock and existing cash balances. This decision significantly revolved around the credibility and sufficiency of the appellant’s documentation and explanations which were accepted by the tribunal.
The judgment underscores the importance of proper procedural adherence in reassessment cases under Section 147 of the Income Tax Act. It highlights the necessity for tax authorities to ensure that all statutory requirements are met before reopening an assessment, thereby safeguarding taxpayer rights against arbitrary reassessment.
The case of Tara Chand vs ITO serves as a critical reference for similar cases where the legality of the reassessment process is questioned, emphasizing the need for clarity and adherence to legal standards in tax proceedings.
ITA 1076/DEL/2019: Tara Chand vs ITO Ward-62(4), New Delhi – Challenging Reassessment Procedures
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