TaxTMI 
TaxTMI 
2017 (1) TMI 1400
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....income as income from undisclosed sources. 3. The brief facts of the case are that the ld.AO has alleged that he has received an information from Annual Information Report Wing exhibiting the fact that the assessee has made investment of Rs. 55,55,000/- on 3rd May, 2006 for purchase of immovable property. The AO has harboured a plea that income to this extent has escaped assessment and, therefore, he recorded reasons for reopening of the assessment. The reasons for reopening are available at page 1 of the paper book. They read as under:- "Name and address of the assessee RAJNI W/O YATENDER VILL KANHARWAS DISTT REWARI Asstt. Year 2007-08 Date 13.03.2012 As per AIR information for F.Y. 2006-07 received in this office, the assessee has purchased immovable property of Rs. 5555000/-. The assessee was asked to explain the source of purchases (investment). But neither the assessee attended nor filed any written reply. A query notice was issued to the assessee on 23.01.2012. But no response has been received form the assessee. I, therefore, have reason to believe that the assessee has invested his/her share in the land amounting to Rs. 5555000/- out of his /her income from unexp....
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....of reasons recorded was duly given to the appellant. Further, there is no evidence of any objections having been raised by the appellant against issue of notice u/s 148. No such evidence was furnished during the course of appellate proceedings also. Therefore, there was no procedural infirmity in the proceedings carried on by AO u/s 147 of the IT Act." 6. The ld. counsel for the assessee while impugning the reopening of assessment took me through the reasons recorded for reopening of the assessment. In this first fold of contentions, he submitted that the first reason assigned by the AO for harbouring a belief that income has escaped assessment is that a letter to enquire alleged investment was sent to the assessee on 23rd January, 2012. This letter was not replied to by the assessee. He pointed out that though as per law the assessee was not supposed to reply this letter because no assessment proceedings were pending before the AO, but, the assessee has given the reply to this letter. Her reply is available on page 89 of the paper book. She has annexed her bank account along with the bank account of her husband. She has also disclosed the details of the alleged investment along w....
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....aped assessment. According to the ld. counsel for the assessee, there is no such procedure contemplated in the Act. At this stage, I deem it appropriate to take note of the discussion made by the Tribunal in the case of Amrik Singh (supra). The discussion from para No.33 to 38 read as under:- "33. Then, the above position is also evident from the fact that whereas section 131(1) does not expressly lay down (though it has been judicially interpreted to have such an effect only, as considered hereinabove) that some proceedings must be pending before the Income Tax Authorities mentioned therein, section 131(1A), which concerns search or search contemplated, specifically provides that where the Authority has reason to suspect concealment or likely concealment of income by any person Assessment year : 2006-07 or class of persons within their jurisdiction, it shall be competent for the Authority to exercise powers conferred u/s 131(1), notwithstanding that no proceedings with respect to such person or class of persons are pending before him, or before any other Income tax Authority. For ready reference section 131(1A) is reproduced hereunder: "Section 131(1A): If the Principal Direct....
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....ent is made by the legislature in both of these provisions, there is no such enablement contained in section 131(1). In other words, the legislative intent is clear from the words employed in sections 131(1), 131(1A) and 131(2), respectively. Whereas, in sections 131(1A) and 131(2), the Authorities are enabled to exercise the powers u/s 131(1) even in the absence of pendency of proceedings before them, there is no such enablement contained in section 131(1). Now, it is trite that the legislature chooses its words with utmost care and where the language employed in a provision is clear and unambiguous, there is no scope of interpretation thereof. So, once enablement of exercise, by Income Tax Authorities, of power of a Civil Court while trying a suit, where no Assessment year : 2006-07 proceedings are pending, is not envisaged by the provisions of section 131(1), no such enablement can be read into the section, particularly in view of the existence of such enablement by the express language contained in sections 131(1A) and 131(2). This is apart from the decided cases discussed hereinabove. 37. In this regard, in 'Jamnadas Madhavji & Co. and Another' (supra), it was observ....
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.... of the assessee, but the mere fact that these deposits have been made in a bank account does not indicate that these deposits constitute an income which has escaped assessment. The reasons recorded for reopening the assessment do not make out a case that the assessee was engaged in some business and the income from such a business has not been returned by the assessee. As we donot have the liberty to examine these reasons on the basis of any other material or fact, other than the facts set out in the reasons so recorded, it is not open to us to deal with the question as to whether the assessee could be said to be engaged in any business; all that is to be examined is whether the fact of the deposits, per se, in the bank account of the assessee could be basis of holding the view that the income has escaped assessment. The answer, in our humble understanding, is in negative. The Assessing Officer has opined that an income of Rs. 10,24,100 has escaped assessment of income because the assessee has Rs. 10,24,100 in his bank account but then such an opinion proceeds on the fallacious assumption that the bank deposits constitute undisclosed income, and overlooks the fact that the sources....
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....ench has dealt with this issue elaborately and recorded a finding that under the Income-tax Act, there is no such procedure to conduct an enquiry for collecting the information without pendency of assessment proceedings. If this reasoning is being excluded from the copy of the reasons given by the AO, then, nothing will remain with the AO except the information transmitted by AIR Wing. Apart from the above, it is to be seen that in the reasons the AO has nowhere alleged escapement of income. The thrust of the reasoning would show that he want to make an enquiry about the investment. No doubt, for reopening of an assessment, he has to just form a prima facie opinion and not to arrive at a firm conclusion, but, the formation of a prima facie opinion should also depict escapement of income. It is also pertinent to observe that when all these pleas were raised before the first appellate authority, then, the ld. first appellate authority has not dealt with a single proposition and rather dealt with the issue in an altogether different manner whether notice u/s 148 was served or not, copy of reasoning was provided or not, the procedure contemplated through the decision of the Hon'ble Sup....