The case ITA 825/DEL/2019 involves Sanjay Kumar Jain from New Delhi, who appealed against the reopening of his tax assessment for the year 2009-10 by the ITO Ward 63(2), New Delhi. This case is a significant reference for understanding the application of section 147 related to the reassessment of income tax.
The appellant contested the reopening of his assessment which was initially prompted by the ITO based on information suggesting discrepancies in F&O transactions reported. The key legal challenge was against the procedural validity of the reassessment under section 147 of the Income Tax Act.
Sanjay Kumar Jain’s legal representatives argued that the reassessment was initiated on mere suspicions rather than a concrete ‘reason to believe’ as required by law. They highlighted previous tribunal decisions where similar cases were ruled in favor of the assessee due to lack of substantial evidence from the IT department.
The tribunal reviewed the precedents and the information provided by the investigation wing. It was noted that the ITO did not conduct an independent inquiry apart from relying on the external information, leading to questions about the adequacy of the ‘reason to believe’ that income had escaped assessment.
The tribunal’s decision to quash the reassessment orders was based on procedural flaws and the lack of substantial evidence that could substantiate the escape of income. This case sets an important precedent for similar cases where reassessments are based on weak foundations.
Manage the increasing number of hearings effortlessly by leveraging the legal AI revolution We are India's Leading revolutionary AI-powered legal platform where you can get enough insights into top cases and judgements.
Research Platform