Tribunal quashes reassessment, Officer can't reopen based on same facts. Assessee appeal allowed, unexplained bank deposit addition set aside.

The Tribunal quashed the reassessment proceedings, holding that the Assessing Officer cannot issue a notice under Section 148 to reopen the assessment based on the same facts previously scrutinized. The appeal by the assessee was allowed, and the addition of Rs. 60 lakhs as unexplained bank deposit under Section 69A was set aside.

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Issues Involved:
1. Validity of Reassessment Proceedings under Section 147.
2. Validity of Notice under Section 143(2).
3. Application of Section 69A for Unexplained Cash Deposits.

Summary:

Validity of Reassessment Proceedings under Section 147:
The assessee, a non-resident Anesthesiologist, filed his return of income for AY 2017-18 declaring an income of Rs. 36,11,450/-. The Assessing Officer (AO) observed a cash deposit of Rs. 60 lakhs in the assessee's bank account, which was not declared in the return. Consequently, the AO invoked Section 147 of the I.T. Act to reopen the assessment. The assessee filed objections against the reopening, but the AO rejected these objections, leading to an addition of Rs. 60 lakhs to the total income under Section 69A as unexplained bank deposit. The Dispute Resolution Panel (DRP) upheld the AO's decision, stating that the reopening was justified as the AO had "reasons to believe" that income had escaped assessment.

Validity of Notice under Section 143(2):
The assessee contended that the notice under Section 143(2) was served beyond the prescribed time limit. However, the DRP noted that the time limit for serving the notice was extended to 31st March 2021 due to the COVID-19 pandemic, as per the Gazette of India notification dated 29-09-2020. Therefore, the notice served on 04-11-2020 was within the extended time limit and was deemed valid.

Application of Section 69A for Unexplained Cash Deposits:
The AO applied Section 69A, arguing that the assessee failed to provide tangible evidence to prove that the cash deposit of Rs. 60 lakhs belonged to his late father and brother. The DRP supported this view, stating that the assessee's claim was without legal evidence. The Tribunal noted that once a notice under Section 143(2) is issued, the AO is duty-bound to pass an order under Section 143(3). The Tribunal referred to various judicial precedents, including the Hon'ble Supreme Court's decision in CIT vs. Tarajan Tea Company (P) Ltd, which held that the AO cannot reopen the assessment on the same reasons that were considered during the original proceedings.

Conclusion:
The Tribunal quashed the reassessment proceedings, stating that the AO cannot issue a notice under Section 148 for reopening the assessment on the same set of facts that were the subject matter of scrutiny proceedings. Consequently, the appeal filed by the assessee was allowed.

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