TaxTMI 
TaxTMI 
2018 (7) TMI 230
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....of the case and in law, the AO erred in charging interest u/s. 234A, 234B, and 234C of the Income Tax Act, 1961 and CIT(A) erred in not holding so. The aforesaid grounds of appeal are without prejudice to each other. That the appellant craves leave to add one or more ground of appeal or to alter / modify the existing ground before or at the time of hearing of appeal. 2. The facts in brief are that a letter was received from the DDIT, Inv. Unit-V, Jhandewalan Extension, New Delhi - 11 0055. The Deputy Director of Income Tax (Investigation), Unit-V, vide his letter dated 11.3.2015 has informed that a search and seizure action u/s. 132 of the I.T. Act was carried out on 27.6.2013 in Santosh Group of Institutions & Dr. P. Mahalingam. During the search, certain documents / books of accounts were seized from the premises H-1 to 6, Santosh Nagar, Pratap Vihar, Ghaziabad, the main administrative block of the college which reveal receipts of the donation / capitation fee over and above the regular course fees, paid in cash by the parents of students taking admissions in various medical courses. During the course of recording the statement u/s. 132(4) of the I.T. Act, relevant seized do....
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....e reasons for reassessment, statement of Dr. P. Mahalingam, and the relevant entries in register were shown to the AR vide order sheet entry dated 6.10.2015. The AR was asked to submit source of income, source of regular fee, capitation fee and copy of bank statement and in response to the same the AR submitted the documents from time to time. Thereafter, the statement of Sh. Bhikam Singh was recorded on 11.12.2015 and summon u/s. 131 of the Act was also issued to Dr. Pramod Kumar Rathore on 16.12.2015 and final show cause dated 8.1.2016 was issued to the assessee to show cause as to why the amount of Rs. 22 lacs should not be treated as income from undisclosed sources and added to his income. In response to the same a reply was received and AO accepted the assessee's claim of Rs. 3 lacs being paid by his son out of his income and observed that the assessee in this case incurred cash expenditure of Rs. 22 lacs for payment of fee towards admission of Dr. Pramod Kumar Rathore in Santosh Medical College for the course of MDS (Periodonitics) Course and in this Rs. 22 lacs, the assessee has failed to provide any satisfactory explanation / documentary evidences regarding the source of Rs....
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....ind much less independent application of mind but is a case of borrowed satisfaction, he cited the case law of Hon'ble Delhi High Court in the case of Pr. CIT vs. RMG Polyvinyls (I) Ltd. (2017) 83 taxmann.com 348 (Delhi); Pr. CIT vs. Meenakshi Overseas () Ltd. vs. ITO 395 ITR 677 (Del.); Bir Bahadur Singh Sijwali vs. ITO (2015) 53 taxmann.com 366 (Delhi Trib.). He further stated that A.O has not seen the original return filed by the assessee. In Col No. 7 of Form for recording the reasons for initiating proceeding U/S 147 of the Act, in reply to question "as to whether any voluntary return had been filed by assessee", the A.O has mentioned "N.A." The question arises here is as to how to AO could have formed reason to believe of income escaping assessment, when he did not even peruse the original return filed by the assessee. The fact that the AO has not even seen the original return of income filed by the assessee establishes not only the fact that notice has been issued in a mechanical manner but also establishes the fact that A.O did not have the return of income in his possession because he did not have jurisdiction over the assessee. To support this contention, he relied upon t....
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....tions are applicable. 147 7 Whether the assessment is proposed to be made for the first time. If the reply is in the affirmative, please state (a) whether any voluntary return had already been filed and (b) if so, the date of filing the said return. N.A. 8 If the answer to point 8 is in the negative please state (a) the income originally assessed. (b) Whether it is a case of under assessment, assessment at too low a rate assessment which has been made the subject relief or allowing of excessive loss or depreciation. N.A. Under Assessment 9 Whether the provisions of section 150(1) are applying. If the rely is in the affirmative, the relevant facts may be stated against item no. 11 and it may also be brought out that the provisions of section 150(2) would not stand in the way of initiating proceedings u/s. 147. No. A letter was received from the DDIT, Inv. Unit- V(1), New Delhi dated 11.03.2015 informing that a search and seizure action u/s. 132 of the I.T. Act was carried out on 27.6.2013 in Santosh Group of Institutions & Dr. P. Mahalingam. During the search certain documents / books of accounts were seized from the premises H-1 to 6, Santosh Nagar, Pratap....
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....sdictional Delhi High Court that mere information received from DDIT(Inv) cannot constitute valid reasons for initiating reassessment proceedings in the absence of anything to show that A.O. had independently applied his mind to arrive at a belief that the income had escaped assessment. Thus, the AO has acted mechanically and without any independent application of mind. It is also evident that while alleging cash payment in dispute ot is not even known or stated on which date and on what basis such sums was allegedly paid by assessee; the reasons recorded are therefore vague, highly non specific and reflect complete non-application of mind. That reasons recorded are 'reason to suspect' and, is a mere attempt to carry out fishing and roving expedition. It is also noted that in the absence of specific and incriminating material much less tangible and, relevant material to form even prime facie belief that there was alleged payment is also apparent from the fact that the alleged document found and seized during the course of search and does not reflect any figure and in the absence of any independent enquiry or examination of facts on record or noticing the content of alleged ....
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...." 13. As in the above case, even in the present case, the Court is unable to discern the link between the tangible material and the formation of the reasons to believe that income had escaped assessment. In the present case too, the information received from the Investigation Wing cannot be said to be tangible material per se without a further inquiry being undertaken by the AO. In the present case the AO deprived himself of that opportunity by proceeding on the erroneous premise that Assessee had not filed a return when in fact it had. 14. To compound matters further the in the assessment order the AO has, instead of adding a sum of 78 lakh, even going by the reasons for reopening of the assessment, added a sum of Rs. 1.13 crore. On what basis such an addition was made has not been explained. 15. For the aforementioned reasons, the Court is satisfied that no error was committed by the ITAT in holding that reopening of the assessment under Section 147 of the Act was bad in law." ii) 395 ITR 677 (Del) Pr. CIT v. Meenakshi Overseas (P) Ltd. v. ITO "36. In the present case, as already noticed, the reasons to believe contain not the reasons but the conclusions of the AO one a....