TaxTMI 
TaxTMI 
2019 (3) TMI 324
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 1996-97 1. The ld. CIT (A) has grossly on facts and in law in dismissing the legal issue challenging validity of notice issued u/s 148 for escapement of income within the meaning of sec. 147 explanation 2(a) read with section 150(1) of the Act, holding that this issue has been decided by the Hon'ble ITAT while deciding ITA No. 64/lnd/2014 dated 29-02-2016. 2. The ld. CIT (A) has grossly erred in ignoring the issue that the set aside assessment made on 27-12-2016 has been made in the name of deceased Sh. Dinesh Kumar Goyal, when it was in the knowledge of AO that the assessee had expired on 26-02-2015. Therefore, the assessment made by the AO in the name of the deceased person is bad in law and my kindly be quashed Without prejudice to the above The ld. CIT (A) has erred on facts and in law in confirming addition of Rs. 250,000/- made on account of unexplained cash credit is the name of Smt. Laxmi Kanta Goyal. ITA No.545/Ind/2017 in the case of late Shri Dinesh Kumar Goyal Assessment Year 1997-98 1. The ld. CIT (A) has grossly erred on facts and in law in dismissing the legal issue challenging validity of notice issued u/s 148 for escapement of income within t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y been decided by the Hon'ble ITAT while deciding ITA No. 62/lnd/2014, dated 29-02-2016. 3. The ld. CIT (A) has erred in not deleting addition of Rs. 170,000/- being estimated profit on estimated sales, where as he has deleted such addition in the A.Y. 1996-97, in view of decision of Hon'ble ITAT in ITA No. 573/lnd/05, dated 19-09-2008. ITA No.548/Ind/2017 in the case of Smt. Laxmi Kanta Goyal Assessment Year 1999-2000 1. The ld. CIT (A) has grossly erred on facts and in law in ignoring the facts that the reassessment proceedings irritated u/s 148 r.w.s. 147 explanation 2(a) on 28-03-2006 were void ab initio as these were based on fallacious assumption that the aggregate bank deposits of Rs. 1,85,553/- constituted undisclosed income of the assessee overlooking fact that source of deposit need not necessarily be income of the assessee, as such, the notice was issued without application of mind by the AO for verification of source of bank deposits and did not fulfill the requirement of law for issuance of notice u/s 147 explanation 2(a)/148. 2. The ld. CIT (A) has erred on facts and in law in ignoring the legal position that when on ground on which reopening was b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of the Act and dismissed the appeal of the assessee for non appearance. The assessee has further appeal to the ITAT, Indore Bench Indore and the said case was dismissed for non appearance. The assessee filed for restorance of appeal and the same was accepted by the Bench and the appeal was restored. Tribunal in its order dated 29.2.2016 ob observing that the Ld. A.O has passed the order u/s 144 and added the entire creditors, unsecured loans and thereafter the investment made in building is also added in the income estimated on the turnover shown in the profit and loss account attached with the project report, again directed the Assessing Officer to make fresh assessment, Ld. A.O framed the assessments on 29.12.2016 after making certain additions against which the assessee preferred appeal before Ld. CIT(A) and partly succeeded. 6. Now the assessee is in appeal before the Tribunal raising various issues including this common legal issue challenging the validity of the reassessment proceedings. 7. Ld. Counsel for the assessee submitted that the reassessment proceedings are void on account of two reasons; firstly the alleged notice issued u/s 148 of the Act for Assessment Year 1996....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... accordingly there is no merit in such ground of appeal and the same is rejected. 6.2 The AO has himself noted that the amount added a capital balance was shown by the appellant in the balance sheet filed before the bank for the previous year relevant to AY 97-98 and accordingly there was absolutely no case for considering this amount as unexplained opening balance for the year under consideration. If the AO was of the view that such amount was not properly and adequately explained, he should have immediately taken recourse to appropriate proceedings for AY 1997-98 and earlier years as the facts of the case warranted. The AO when directed to submit a further report after enquiry also has done previous little to justify the addition made. It is admitted position that no return of income was filed by the appellant for any AY prior to AY 98-99 for several years. In that view of the matter, considering the facts of the case and the attitude of the appellant, the AO is directed to issue notice u/s 148 for AY 97-98 and 96-97 to bring to tax escaped income being unexplained accretion to the capital balance as reflected in the balance sheet filed with the bank. 6.3 There is no merit ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e u/s 148 of the Act merely on the basis of finding given by Ld. CIT(A) allegedly directing the Assessing Officer to reopen the cases for Assessment Year 1996-97 and 1997-98 by issuing notice u/s 148 of the Act can be held to be justified needs to be examined in the light of the legal pronouncements as well as the undisputed fact that the cases have been reopened after the lapse of 4 years from the end of the relevant assessment years and the material evidence was only in the form of direction given by Ld. CIT(A). 13. We find that the Hon'ble jurisdictional High Court in the case of Computer Science Corporation (India) (P) Ltd V/s Addl. CIT (supra) held that the "direction given by CIT(A) shall not be construed to be of binding nature by the AO and it will be open for AO to proceed with the assessment proceedings in accordance with law, uninfluenced by the said impugned observations/directions contained in the impugned order'. 14. The Co-ordinate Bench of Nagpur in the case of M.B. Traders V/s ACIT (supra) held that "direction of the higher authority including that of the CIT(A) will not confer power to assume jurisdiction to the AO to initiate reassessment proceedings". 15.....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... or recomputation as is referred to in that sub-section relates to an assessment year in respect of which an assessment, reassessment or recomputation could not have been made at the time the order which was the subject-matter of the appeal, reference or revision, as the case may be, was made by reason of any other provision limiting the time within which any action for assessment, reassessment or recomputation may be taken." The aforementioned provision although appears to be of a very wide amplitude, but would not mean that recourse to reopening of the proceedings in terms of sections 147 and 148 of the Act can be initiated at any point of time whatsoever. Such a proceeding can be initiated only within the period of limitation prescribed therefore as contained in section 149 of the Act. Section 150(1) of the Act is an exception to the aforementioned provision. It brings within its ambit only such cases where reopening of the proceedings may be necessary to comply with an order of the higher authority. For the said purpose, the records of the proceedings must be before the appropriate authority. It must examine the records of the proceedings. If there is no proceeding before....
X X X X Extracts X X X X
X X X X Extracts X X X X
....in respect of any year or any person. As the phraseology used in the proviso is not clear or unambiguous. the question raised cannot be satisfactorily resolved without having a precise appreciation of a brief history of section 34 of the Act culminating in the enactment of the proviso in the present form." (p. 339) This Court noticed the development of law as also the fact that the decision of the Income-tax Officer given in a particular year does not operate as res judicata to opine: "The lifting of the ban was only to give effect to the orders that may be made by the appellate, revisional or reviewing Tribunal within the scope of its jurisdiction. If the intention was to remove the period of limitation in respect of any assessment against any person, the proviso would not have been added as a proviso to sub-section (3) of section 34, which deals with completion of an assessment, but would have been added to sub-section (1) thereof." In regard to the question that what would be the meaning of the term 'finding' or 'direction', it was held: "A "finding", therefore, can be only that which is necessary for the disposal of an appeal in respect of an assessm....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ly acted upon i.e. initiated the reopening proceedings on the directions of Ld. CIT(A) and has totally ignored his part of the job i.e. his satisfaction. Respectfully following the above judgments of Apex Court and other lower courts, we are of the considered view that the notice u/s 148 of the Act issued for escapement of income within the meaning of Section 147 of explanation 2(a) read with section 150(1) of the Act for Assessment Year 1996-97 and 1997-98 in the case of Smt. Laxmikanta Goyal and Late Dinesh Kumar Goyal through his legal heir Smt. Laxmikanta Goyal are against the settled principles of law and are thus void ab initio. We accordingly set aside the finding of both the lower authorities and quash the impugned assessment proceedings in the case of both the assessee's for both the assessment years 1996-97 and1997- 98 being invalid and bad in law and also direct the Ld. Assessing Officer to delete the additions made therein. We thus allow this common issue raised by both the assessee's challenging the validity of issuance of notice u/s 148 of the Act in favour of the assessee and other grounds being academic in nature are rendered to be infructuous and these are dismisse....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... (xiii) ACIT V/s Major Deepak Mehta (2012) 344 ITR 641 (Chattisgarh) (xiv) CITV/s Jet Airways (I) Ltd (2011) 331 ITR 236 (Bombay) (xv) Ranbaxy Laboratories Ltd V/s CIT (2011) 336 ITR 136 (Delhi) (xvi) CIT V/s Ram Singh (2008) 306 ITR 343 (Raj.) 19. Ld. Counsel for the assessee also challenged the reopening and submitting that the Ld. A.O proceeded on the fallacious assumptions that the bank deposits constitutes undisclosed income and he completely over ruled the fact that the sources of deposits need not necessarily be the income of the assessee. From the point of view of the department it can be a case of examination and verification but then the reassessment proceedings cannot be resorted to only to examine the facts of the case no matter how desirable that be unless there is a reason to believe rather than to suspect that the income has escaped the assessment. In support of this contention reliance is placed on following decisions; (i) Bir Bahadur Singh Sijwali V/s ITO (2015) 54 Taxmann.com 366 (Delhi-Trib.) (ii) Satyadev Singh V/s ITO, ITA No.243/Agra/2017 (Agra I.T.A.T.) order dated 04.06.2018 (iii) Khaliq Ahmed V/s ITO, ITA No.71/LKW/2017 (Lucknow- I.T.A.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....alleging the escapement of income of Rs. 1,85,553/- which was the total of various deposits in the bank account held by the assessee at Mandsaur Commissioner Co-Operative Bank, Mandsaur. However from perusal of the impugned assessment order we find that the addition was made for un-explained investment in construction of building at Rs. 9,62,800/- which was subsequently scaled down to Rs. 3,81,460/-by Ld. CIT(A). However no addition has been made by Ld.A.O for the alleged bank deposits at Rs. 1,85,553/-. In the given facts whether the Ld. A.O can assess other income of the assessee without assessing the income for which reasons were recorded?. We find that judgment of Hon'ble Bombay High Court in the case of CIT V/s Jet Airways India Ltd squarely applies on the facts as well as in the favour of the assessee as the Hon'ble Court held that "Section 147 of the Act provides that the Assessing Officer may assess the income which has escaped assessment and also any other income chargeable to tax which has escaped assessment which comes to his notice subsequently in the course of proceedings under the section. Explanation 3 of Section 147 inserted by Finance Act 2009 with retrospe....