The Income Tax Appellate Tribunal (ITAT), Delhi Bench ‘H’, adjudicated the appeal filed by Satyamurti Ramasundar against the order passed by the Additional Commissioner of Income Tax (ACIT), Circle-4(1), Gurgaon. The appeal, registered as ITA No. 371/DEL/2021, pertains to the assessment year 2012-13.
Satyamurti Ramasundar filed the appeal on 31/03/2021, challenging the reassessment order issued by the ACIT under Section 147 read with Section 143(3) of the Income Tax Act, 1961. The final order was pronounced on 07/07/2023.
The assessee, Satyamurti Ramasundar, is a resident of Gurgaon, Haryana. For the assessment year 2012-13, the original assessment was completed under Section 143(3) of the Act on 16/03/2015, allowing the deduction claimed under Section 54. However, a notice under Section 154 was issued on 16/02/2017 to rectify the alleged mistake in allowing the deduction. Later, a notice under Section 148 was issued on 27/09/2017, leading to the reassessment order passed on 23/12/2018, adding Rs. 2,27,63,318 as long-term capital gain.
During the reassessment, the ACIT made the addition of Rs. 2,27,63,318 as long-term capital gain, rejecting the deduction claimed under Section 54. The assessee contested this addition before the Commissioner of Income Tax (Appeals), but the appeal was dismissed.
Before the Tribunal, the learned counsel for the assessee argued that the reassessment proceedings were initiated during the pendency of proceedings under Section 154, which is not permissible as per the decision of the Hon’ble Supreme Court in the case of S.M. Overseas Pvt. Ltd. vs. CIT. Additionally, the counsel contended that there was no failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment, and the reassessment was initiated based on the objections of the audit party, which is not permissible.
The Departmental Representative supported the findings of the lower authorities but could not provide any positive evidence regarding the status of proceedings under Section 154.
The Tribunal found merit in the arguments presented by the assessee. It held that the reassessment proceedings initiated during the pendency of proceedings under Section 154 were invalid, as per the Supreme Court’s ruling in S.M. Overseas Pvt. Ltd. vs. CIT. Additionally, the Tribunal noted that there was no specific material fact that was not disclosed by the assessee during the original assessment proceedings, and the reassessment was based on the audit party’s objections, which is not permissible.
The Tribunal quashed the reassessment order, holding that the jurisdiction to reassess the income was not validly assumed by the ACIT. The appeal was allowed, and the addition of Rs. 2,27,63,318 as long-term capital gain was deleted.
The appeal was allowed, and the reassessment order was quashed.
Order pronounced in the open court on 07/07/2023.
Signed by:
(SAKTIJIT DEY) – Vice-President
(GIRISH AGRAWAL) – Accountant Member
Date: 07 July, 2023
Copy forwarded to:
Assistant Registrar, ITAT, New Delhi
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