TaxTMI 
TaxTMI 
2018 (9) TMI 1402
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....mitted that through these additional grounds the assessee has challenged that reasons recorded were not valid reasons recorded as the Assessing Officer did not apply his mind as to how the income had escaped assessment. Learned A. R. invited our attention to the copy of reasons recorded, placed at page 24 of the paper book, and it was submitted that the Assessing Officer has just recorded that assessee had made deposits in bank and nowhere in these reasons he has made any findings from the return of income as to how the income had escaped. It was further submitted that the Assessing Officer had required the assessee vide non statutory letter dated 14/11/2011 to explain the deposits and for which the assessee had replied and had submitted his PAN and information regarding filing of original return of income. It was submitted that the Assessing Officer without further verifying the contents of the information which was already on record in the form of return did not make any satisfaction regarding escapement of income. It was submitted that various Benches of Hon'ble Tribunal and various Hon'ble High Courts have held that in the reasons recorded, the Assessing Officer should ....
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.... consequent assessment proceedings are illegal and void ab initio. 3. Without prejudice it was argued that Assessing Officer had not made any addition on account of cash deposits and had made addition on other grounds which were also not legal in view of the decision of Hon'ble Lucknow Bench of the Tribunal in the case of Anita Srivastava in I.T.A. No.98/Lkw/2017. 4. Learned D. R., on the other hand, submitted that the record of obtaining the permission from higher authority was not available with him and it was submitted that the Assessing Officer might have taken the permission separately. As regards the other legal issue of notice u/s 148, Learned D. R. argued that sufficient reasons were recorded by the Assessing Officer. 5. I have heard the rival parties and have gone through the material placed on record. The assessee has taken the following additional grounds of appeal which have been accepted in view of the ratio of judgment of Hon'ble Supreme Court in the case of National Thermal Power Co. Ltd. vs. CIT 229 ITR 383 (SC): "1. That the notice u/s 148 of I.T. Act dated 14.02.2014 is an invalid notice as it does not specify the reassessment on the basis of c....
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....to which the assessee did not reply and therefore, he held that the income of assessee had escaped assessment and therefore, he issued notice u/s 148. I find that this legal issue argued by Learned A. R. regarding non approval of issue of notice u/s 131 of the Act do not find part of additional grounds of appeal therefore, this issue do not require any adjudication. However, on grounds No. 1 & 2, I find that the Assessing Officer himself has noted that assessee had furnished PAN and had also furnished information regarding filing of original return of income. The Assessing Officer wanted assessee to furnish source of cash deposits to which assessee did not reply. I find that Assessing Officer should have applied his mind from the documents already on record and should have compared the information which was in his possession and only after verifying such information should have arrived at the conclusion regarding escapement of income. The mere deposit of cash in the bank account cannot give rise to a belief of Assessing Officer that income had escaped assessment as the cash deposit can be from any other source other than income. Such satisfaction was needed by the Assessing Officer....
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....romoters & Finlease Pvt Ltd [(2012)342 ITR 169] but then none of the questions before I.T.A. No.: 3814/Del/11 Assessment year: 2008-09 Page 5 of 6 Hon'ble High Court had anything to do with reopening of assessment and this decision can not, therefore, be taken as an authority on the legal issue which did not even come up for specific adjudication before Their Lordships. As for her reliance on Hon'ble Supreme Court's judgment in the case of Phool Chand Bajrang Lal Vs ITO [(1993) 203 ITR 456], that was case in which Their Lordships concluded that the AO "rightly initiated the reassessment proceedings on the basis of subsequent information, which was specific relevant and reliable, and after recording the reasons for formation of his own belief that in the original assessment proceedings, the assessee had not disclosed the material facts truly and fully and, therefore, income chargeable to tax had escaped assessment" and we are unable to see anything on the facts of the present case which are materially similar to the facts of the said case. As regards her reliance on the decision of a coordinate bench in the case of Mithila Credit Services Limited Vs ITO (ITA No. 1078/Del/2013; order....
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....ent year 2004- 05 - Information was received from Director (Investigation) that during year under consideration, assessee had received accommodation entries from a beneficiary - Notice under section 148 was issued and an assessment order was passed by Assessing Officer treating credit received as unexplained income under section 68 -Whether since there was no independent application of mind by Assessing Officer to tangible material and, conclusions of Assessing Officer were reproduction of conclusion in investigation report, reasons failed to demonstrate link between tangible material find formation of reason to believe that income had escaped assessment and, consequently, reassessment was unjustified - Held, yes [Paras 36 and 37] [In favour of assessee]." Further I find that Assessing Officer has not made any addition on account of cash deposits in the bank and has made addition on other grounds which fact is verifiable from assessment order. This grievance has been taken by assessee as ground No. 3 of his appeal. 6. I find that Lucknow Bench of the Tribunal in the case of Anita Srivastava vs ACIT in I.T.A. No.98/Lkw/2017 has held that where a case has been reopened u/s 148 ....
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....by virtue of introduction of Explanation (3) to the said section, the situation would not be different, which means that if upon issuance of a notice under section 148 of the Act, the Assessing Officer does not assess the income which he has reason to believe, had escaped assessment and which forms the basis of a notice under section 148 of the Act, it is not open to the Assessing Officer to assess independently any other income which does not form the subject matter of the notice. This reasoning given by the Hon'ble Bomaby High Court in the case of CIT vs. Jet Airways (supra) also found in agreement with the judgment of the Hon'ble Delhi High Court which has taken similar view in the case of Ranbaxy Laboratories Ltd. vs. CIT reported in 336 ITR 136 wherein the Hon'ble Delhi High Court has observed that the heading of section 147 is "Income escaping assessment" and that of section 148 is "Issue of notice where income escaped assessment". Section 148 is supplementary and complimentary to section 147. Section 147 mandates recording of reasons to believe by the Assessing Officer that income chargeable to tax has escaped assessment. All these conditions are required to be f....