https://www.taxtmi.com/css/info/rss_sitemap/rss_feed.css?v=1746094055 https://www.taxtmi.com Business/Tax/Law/GST/India/Taxation/Policies/Legal/Corporate Tax/Personal Tax/Vat Law/Legal Information/Tax Information/Legal Services/Tax Services Tax Management India. Com / MS Knowledge Processing Pvt. Ltd. All rights reserved. One stop solution for Direct Taxes and Indirect Taxes https://www.taxtmi.com/caselaws?id=769114 https://www.taxtmi.com/caselaws?id=769114 Reopening of assessment u/s 147 - assessee has not filed any return of income u/s 139(1) and the AO has initiated the proceedings u/s 148 on the basis of information in his possession that assessee has made time deposit in his bank account - HELD THAT:- We find no merit in the conclusion drawn by the AO and the ld.CIT (A) which are based on suspicion and without application of mind. Thus, the proceedings initiated vide notice under section 148 is void- ab-initio since the ld. PCIT, Alwar has not recorded proper satisfaction and gave approval without application of mind and in mechanical manner which is unjustified and bad-In-law. In view of the reasons set out above, as also bearing in mind entirety of the case, we are of the considered view that the reasons recorded by the Assessing Officer, as set out earlier, were not sufficient reasons for initiating the assessment proceedings under section 147 read with section 148 of the IT Act, 1961. We, therefore, quash the reassessment proceedings. Time deposit in the bank account - Assessee failed to furnish documentary evidence regarding time deposit made during the year under consideration - AO considered the said information as reason to believe that income of the assessee has escaped assessment. Thus, the AO initiated proceedings for reopening of assessment and ultimately made addition on account of unexplained time deposit in the bank account. From perusal of Assessment order, we note that the AO has failed to make any enquiry in respect of the time deposits in the bank account reflecting the name of the bank, account numbers, nature of time deposit, source of time deposit etc. and further we note that the AO has not brought on record any evidence on the basis of which the reasons and conclusion was drawn. We also note that both the assessment order and appellate order has made no reference of specific section under which the addition has been made which is very much required to be mentioned by the AO so as to enable the assessee to represent his case accordingly and effectively. Therefore, non-mentioning the precise provision of law makes the impugned addition bad in law. We note that the Coordinate Bench of the Tribunal, Jaipur in the case of Shri Ram Lal [2024 (8) TMI 1554 - ITAT JAIPUR] held that non-mentioning the precise provision of law makes the entire impugned addition bad in law. The assessee submitted that he was in service in the Indian Navy for 11 years (retired in 1988) Post retirement, he was actively and exclusively engaged in farming and driving agriculture income therefrom. Therefore, it will not be abnormal to assume that the appellant had accumulated fund over the period of time since it is a general practice of a person to save money in bank. We note from the submission of assesee that assessee in his first reply dated 23.07.2023, submitted that he had savings from Indian Navy Service and the time deposit were made from the agriculture income gathered over the time. Therefore, the source of time deposit was very well explained by the appellant that the time deposit was made from the available fund out of past savings and we note that neither the AO nor the ld. CIT (A) had brought any record to suggest that the assessee was not serving in the Indian Navy or have any other source of income. Thus addition made by the lower authorities deserves to be deleted. Appeal of assessee allowed. Case-Laws Income Tax Tue, 21 Jan 2025 00:00:00 +0530