TaxTMI 
TaxTMI 
TaxTMI 
2018 (5) TMI 1551
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.... Assessing Officer reopened the assessment for the A.Y. 200708, for which the impugned Notice came to be issued. In order to do so, he had recorded the following reasons; "In this case assessee has filed return of income for A.Y. 2007-08 showing salary income of Rs. 52,108/-, Rs. 2,29,780 under the head capital gains and income from other sources of Rs. 2,311/- and total income of Rs. 28,419/-. During the course of survey u/s.133A of the IT Act at the business premises of Shri Baldevbhai Bhikhabhai Patel on 23.03.2013 certain diaries and loose papers were found and impounded as per annexure BFI-1 to BFI-35. ON perusal of this impounded papers and written submission in responses to summons u/s.131 of the Act, it is noticed that some pages of the impounded diaries and loose papers are related to the land transactions and receipts of cash received from other persons and the cast payments made to others pertaining to the period F.Y. 2006-07, i.e. A.Y.2007-08. The details of the same are given in brief as under; "Sr. No. Anne. No. Page No. Issue(s) Involved / Action Suggested 1 BFI-2 3 As per the market trend prevalent in the real estate market 200=00 means total three zero....
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....on 16.11.2006. iii) Rs. 100,000/- given for House Hold Expenses on 16.11.2006. iv) Rs. 80,000/- given to Puiari to do the Jap (religious rituals). v) Rs. 2,00,000/- given to mother for purchase of sarees & to be paid in village on 16.11.2000. vi) Rs. 1,00,000/- withdrawal for House Hold Expenses by Baldevbhai - The amount on page is written in code word and it shows the payment made to above said persons/received from the above said persons. It is presumed that this unaccounted transaction of Rs. 53,00,000/- has been paid by Shri. Baldeobhai Bhikhabhai Patel which has not disclosed in his regular books of accounts. This amount is required to be treated as undisclosed income of Baldevbhai and to be added in the return of income for the financial year mentioned above. 6 i) Paid Rs. 500,000/- in cash to AHD on 19.11.2006. ii) Rs. 50,000/- paid to Sanjay for MilI on 20.11.2006. iii) Rs. 2,50,000/- lump sum paid to Vishnubhai on 20.11.2006. The amount on page is written in code word and it shows the payment made to above said persons. It is presumed that this unaccounted transaction of Rs. 10,00,000/- has been paid by Shri. Baldeobhai Bhikhabhai Patel which has....
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....required to be treated as undisclosed income of Baldevbhai and to be added in the return of income for the financial year mentioned above. 4 BFI-7 1 WRITTEN AS 45 Bigha - 9300 Rate - 1/2% share, Varachha Road, Bhareba. 1345000/= 10.01.06 Ghansyambhai. The amount is written in code word and the transaction shows that the amount is invested in purchase of land with 50% share of Ghansyambhai. It is presumed that this unaccounted transaction has been made by Shri. Baldeobhal Bhikhabhai Patel and the half share of Ghansyambhal is written at Rs. 13,45,000/-. The half share of the assessee Baldevbhai has not been disclosed and noted on this page and in his regular books of accounts. This amount is required to be treated as undisclosed income of Baldeobhai and to be added in the return of income for the financial year mentioned above. 3 Written as Chautabazar - Ghansyambhai (profit) - 2,80,000/- Chauta Profit taken in account. The amount is written in code word and the transaction shows that the Profit received is noted for account and there is a signed. It is presumed that this unaccounted transaction has been made by Shri. Baldeobhai Bhikhabhai Patel with Ghansyam....
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....20000/00 means Rs. 2,00,00,000/- 300000/= means Rs. 30,00,000/- 50000/- means Rs. 50,00,000/- Hence, the total of Rs. 2,80,00,000/- of unaccounted money is given to different person which is not recorded in the regular books of account. . This amount is to be added to the total income of the assessee. 12 In this page the details regarding the amount received from Baldevbhai & Maganbhai of Chandkheda and others are reflected. As per the code mentioned above have 13691/50 means Rs. 1,36,91,000/- Received from Baldevbhai. 13691/50 means Rs. 1,36,91,000/- Received from Maganbhai. Hence, the total of Rs. 2,73,82,000/- of unaccounted money is shown as receipt from Baldevbhai which is not recorded in the regular books of account. This amount is to be added to the total income of the assessee. 13 In this page, there is an entry in code word as 4200/00, it means 42,00,000/- received on account of sale of plots at Saroli on 05.03.07. Here the unaccounted money receipt is shown as receipt from the sale of land at Saroli which is not recorded in the regular books of accounts of the assessee. This amount is to be added to the total income of the assessee. &....
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....cted in the above annexures did not reflect in the books of accounts of the assessee. This payments are found unaccounted / unexplained expenditure for the F.Y. 2006-07 relevant to A.Y. 2007-08. Where any books of accounts, other documents found in the possession of control of any person in the course of survey u/s.133A, it may be presumed that such books of accounts, other documents belong to such persons. It is clear that since the above documents have been impounded from the assessee's premises, there is reasonable presumption that these documents belong to the assessee and so do the contents therein. From the return of income and based on the information received, I have reason to believe that the assessee failed to disclose fully and truly all material facts for assessment of his case for A.Y. 2007-08. Hence, the undisclosed income amounting to Rs. 44,50,77,000/- reflected in the impounded diaries / loose papers are required to be taxed in the hands of the assessee. Accordingly, I am satisfied that the income chargeable to tax has escaped assessment and hence, it is a fit case for reopening the assessment within the meaning of section 147 of the Act." 3. The petitioner first....
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.... reported in 98 CCH 18 (Del). (G) Yum Restaurant v. DCIT reported in 397 ITR 665 (Del). (H) Shamshad Khan v. ACIT reported in 395 ITR 265 (Del). 5.1 On the basis of such judgments, counsel for the petitioner vehemently contended that in the present case, the sanction granted by the authority is invalid. There was no application of mind on the part of the Dy. Commissioner of Incometax before authorizing the Assessing Officer to issue Notice of reopening of assessment. 6. On the other hand, learned counsel for the Department submitted that the Assessing Officer has recorded valid reasons before issuing the Notice for reopening the assessment. Such reasons were placed before the competent authority along with the printed proforma for considering the question whether sanction was to be granted or not. The Dy. Commissioner of Incometax perused the materials on record and granted such sanction after due application of mind. 6.1 Counsel relied on the judgment of this Court in case of Lalita Ashwin Jain v. Income Tax Officer reported in [2014] 45 taxmann.com 404 (Gujarat) in the context of the validity of sanction. Counsel also drew our attention to the recent judgment of the Divi....
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....that the sanction required in terms of Section 151 of the Act has not been validly granted. As is well known, subsection (1) of Section 151 of the Act provides that no notice shall be issued u/s.148 of the Act by the Assessing Officer after the expiry of a period of 04 years from the end of relevant Assessment Year unless the Principal Chief Commissioner or the Chief Commissioner or the Principal Commissioner or the Commissioner is satisfied on the reasons recorded by the Assessing Officer that it is a fit case for the issuance of such Notice. Subsection (1) of Section 151 of the Act, thus, provides a safeguard whereby, in a case where the Assessing Officer desires to reopen an assessment, by issuing notice beyond the period of 04 years from the end of relevant Assessment Year, sanction from the above mentioned higher authority would be needed. We discarded the petitioner's first argument that no sanction at all was granted by the competent authority. The respondents, in response to the Notice issued by this Court, have appeared and filed reply dated 19.12.2017, in which, in relation to the question of sanction, the following averments have been made; "7. It is submitted that dur....
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....on which, the Addl. Commissioner of Incometax, in his own hands, put the following remarks; "I am satisfied that it is a fit case to issue Notice u/s.148 of the Incometax Act, 1961 ?" 11. Below this remark, he put his signature. The Addl. Commissioner of Incometax forwarded such approval to the Dy. Commissioner of Incometax under his letter dated 21.03.2014, in which he stated as under; "Please refer to your proposal received in this office on 20.03.2014 for reopening the assessment u/s.147 of the IT Act in the case of above mentioned assessee for A.Y. 200708. 2. The reasons recorded by you for initiating proceedings u/s.147 of the IT Act, 1961 are perused. After perusal, I am satisfied on the basis of above reasons and considered opinion that this is a fit case for issue of the notice u/s.148 of the IT Act. 3. Therefore, your proposal for reopening the assessment u/s.147 is hereby approved u/s.151(1) of the Act. You are directed to initiate the proceedings as per law and complete the assessment in time after granting proper opportunity to the assessee." 12. It can, thus, be seen that the entire proposal along with necessary details and the reasons recorded by the Ass....