Rakesh Divedi vs. Income Tax Officer

Parties Involved

Facts Summary

The assessee, Rakesh Divedi, is an individual and proprietor of M/s Triambkay Gauri Impex. The Income Tax Officer received information from the Investigation Wing about cash deposits in the assessee's ICICI Bank account that did not commensurate with his reported income. Consequently, a notice under section 148 was issued on 31.03.2016, and an assessment order was passed on 20.12.2016, adding Rs. 5,20,88,345/- under section 68 for unexplained cash credits. The assessee appealed this order before the Learned Commissioner of Income Tax (Appeals), who partly allowed the appeal and directed the AO to make an addition based on the peak credit of the total deposits. The assessee further appealed to the Income Tax Appellate Tribunal on several grounds, including the invalidity of the reassessment order and the mechanical nature of the approval granted by the Principal Commissioner of Income Tax.…

Legal Issues

• 1. Validity of the order passed by the Learned Commissioner of Income Tax (Appeals).
• 2. Whether the assessment under section 147 is invalid due to the non-issuance of notice under section 143(2) within the prescribed time limit.
• 3. Whether the reassessment order is invalid due to the mechanical approval granted by the Principal Commissioner of Income Tax.
• 4. Whether the reasons recorded for reopening the assessment are vague and based on borrowed satisfaction.

Judgment Outcome

Decided in favour of Assessee.

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