TaxTMI 
TaxTMI 
TaxTMI 
2019 (8) TMI 1315
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....es with the only variation in amount therefore, in order to have consistency in our decision both the appeals are heard together and adjudicated accordingly, by this common order. 3. Brief facts are taken from ITA No.332/Agra/2018 in the case of Shri. Pushpendra Singh Vs ITO- 1(2)(3), Mathura, as a lead case. An information was received that assessee had deposited cash amounting to Rs. 12, 50, 000/- in his bank account bearing number 09490110001288 and remained unexplained to prove the source thereof in enquiry proceedings initiated vide Letters dated 26.04.2011 and 03.09.2015 which led to notice under section 148 of the Act, issued on 31.03.2016after recording reasons. In response to the notice return of income was filed showing only interest income of Rs. 6, 170/-, and during the course of assessment proceedings evidences filed to explain the sources of cash deposits stating to be from sale of agriculture produce grown on agriculture land held in the name of Father, did not favour with the view held by the learned Assessing officer who framed assessment vide order dated 19.12.2016 passed under section 147/143(3) of the Act determining total income at Rs. 12, 56, 170/- 4. Befo....
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....after due consideration of the replies of the appellant. With due respect to the judicial precedents cited by the appellant, I am of the opinion that the facts of this case are distinguishable and hence none of those are of any help to the appellant. Grounds no. 1 and 2 are accordingly dismissed." 6. Being aggrieved, assessee has filed this appeal raising the following grounds: 1. "BECAUSE, upon due consideration of facts and in the overall circumstances of the case 'appellant' denies its liability to be assessed in terms of Notice dated 31.03.2016 said to be issued under section 148 of the 'Act'. 2. BECAUSE, the purported 'Reasons' are no 'Reasons' in the eyes of Law. The so called 'Reasons' do not show any 'intelligible nexus' to show that 'Cash Deposit' as made by the assessee represents her 'Income' which too is liable for Income Tax and had escaped Assessment warranting recourse to Notice under section 148 of the Act. 3. BEACUSE, alleged lack of evidence may be a cause for further enquiry or may be a ground prompting 'reasons to suspect' for escapement of income but that alone does not give any valid foundation for reaching to 'reasons to believe' and thereafter arr....
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....ch ground cannot be used detrimental to the interest of the assessee and lay a legal foundation for reopening of assessment. He also submitted that since the letters were non-statutory in nature, issued without any express or implied authority under the law therefore, even if such Letters were insufficiently complied with, novalid and legal proceedings can be initiated on the basis of such unauthorized Letters. He referred to certain case laws which shall be discussed at appropriate places in this order. 8. He invited our attention to the reasons recorded as placed in paper book (APB-22) which is being reproduced as under: "The undersigned is in possession an information that the assessee has deposited cash amounting to Rs. 12, 50, 000/- in SB a/c in UCO Bank, Mathura during the year under consideration i.e. in the F.Y.2008-09 relevant to the A.Y.2009-10. The assessee did not file ITR for A.Y.2009-10. In compliance to notice u/s 133(6), the assessee filed reply and stated that 'my father own 52 Bighas of agricultural land and sold agricultural products. The amount so "received from sales consideration is being deposited in bank account. The assessee also stated that the....
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....ding the admissibly and maintainability of ground challenging the validity of notice under section 148 of the Act. The learned Sr. D.R has objected that assessee having raised no objection with regard to the proprietary of reasons recorded cannot at this stage of proceedings raise this issue. We hold that such an objection raised by the learned Sr. D.R cannot be approved either under law or on facts. 11. As the objection raised by the assessee is a purely legal objection going to the root of the matter to adjudicate upon the question of jurisdictionand in view of the Hon'ble Apex Court judgment in the case of "NTPC Vs CIT", 229 ITR 383 it can be raised at this stage even for the first time. The Hon'ble Supreme Court while dealing with ground raised before the ITAT for the first time relating to legal issue has held that Tribunal should not be prevented from considering questions of law arising in assessment proceedings although not raised earlier. It was also held that under section 254 of the Act that the Tribunal has jurisdiction to examine a question of law which though not arose before lower authorities but arose before it from facts as found by lower authorities and having a....
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....e of validity of reassessment proceedings is a jurisdictional issue. It goes to the root of the matter. The Tribunal ought to have examined the ground no.3 raised in the assessee's appeal on its merit without being prejudiced by the facts that the reassessment order has been passed on the ex-parte basis, in the proceedings the assessee has not objected to the initiation of the reassessment. Accordingly, question no.1 is answered in favour of assessee and against the department. 14. The learned Sr. D.R placed heavy reliance to the Judgment of Hon'ble Delhi High Court in the case of" CIT vs. Safetag International India Pvt. Ltd.", (supra). On perusal of the case it reveals that it nowhere lays down any proposition of law for which the learned Sr. D.R has sought to rely upon it. In this case assessee did not ask for the reasons recorded, participated in the assessment proceedings and raised objection before the learned CIT(A) about the validity of notice under section 148 of the Act. However, the Hon'ble High Court directed the Revenue to supply copy of reasons to the assessee within four weeks and upon receipt of reasons assessee was required to make submission before learned C....
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.... background of the matter, the objection raised by the learnedSr. D.R is rejected being devoid of substance and based on incorrect reading of the law. 17. Even ifthe assessee raised no challenge at the stage of the learned Assessing officer, however, perusal of the appellate order passed by thelearnedCIT(A) reveals that assessee challenged the action of re-opening before the learned CIT(A)by taking specific grounds. LearnedCIT(A) extensively and elaborately discussed the issue and held re-opening to be valid in law as per his own understanding of the issue. Therefore, it cannot be said that assessee is challenging the legality of reopening for the first time before the ITAT. Thus, the objection raised by the learned Sr. D.R is rejected also on the ground, being based on without consideration of fact available on record as emerging from the impugned order itself. 18. Now coming to the validity of reopening of assessment based on reasons recorded. From the perusal of the reasons recorded it is evident that the reason for issuing notice dated 31.03.2016 under section 148, as evident from reasons recorded on 18.03.2016, no evidence of agriculture income was furnished vide replies f....
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....isions can be invoked only in cases where the proceedings are pending and not otherwise. This acts as a limitation or restraint on the capability of the revenue to tackle evasion effectively. It is, therefore, thought necessary to have the power to gather information which after proper enquiry, will result in initiation of proceedings under the Act. With a view to having a clear legal sanction, the existing provisions to call for information have been empowered to requisition information which will be useful for or relevant to any enquiry or proceedings under the Income-tax Act in the case of any persons. The Assessing Officer, would, however, continue to have power to requisition information in specific cases in respect of which any proceeding is pending as at present. However, an income-tax authority below the rank of Director or Commissioner can exercise this power in respect of an inquiry in a case where no proceeding is pending, only with the prior approval of the Director or the Commissioner; It is, therefore, evident that the pre-1995 amendment, section 133(6) could be invoked only in cases where some proceedings were pending, and not otherwise; The 1995 amendment brought in....
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.... case, similarly, the basis of initiation of the assessment proceedings under section 147 was the information with the revenue, of the deposits made by the assessee in his bank account; In Bir Bahadur Singh Sijwali (supra), it was held that the reasons recorded for reopening the assessment are to be examined on a standalone basis and nothing can be added to the reasons. It was also observed that the reasons must point out to an income escaping assessment and not merely need of an enquiry which may result in detection of an income escaping assessment. It was observed that it is necessary that there must be something which indicates, even if it does not establish, the escapement of income from assessment; that it is only on that basis that the Assessing Officer can form a prima facie belief that an income has escaped assessment; that merely because some further investigations have not been carried out, which, if made, could have led to detection of an income escaping assessment, this cannot be reason enough to hold the view that the income has escaped assessment; and that there has to be some kind of cause and effect of relationship between the reasons recorded and the income escapin....
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....exigible to tax. Therefore, prima-facie for Explanation 2(a) of Section 147 of the Act to be invoked, the reasons must indicate that the Assessing officer has applied his mind to the fact that income is chargeable to tax under the Act and it has exceeded maximum amount not chargeable to income Tax. The Hon'ble Court found notice to be without jurisdiction as the satisfaction was not found in the reasons recorded. Thus, the argument of the learned Sr. D.R that mere non-filing of Return is sufficient ground for assuming escapement of income is based on incorrect understanding of law and therefore, rejected. 22. During the course of hearing an objection was raised by the learned D.R that before the learned Assessing officer assessee raised no objection regarding its claim that Letters dated 26.04.2011 & 03.09.2015 are unauthorized in law. In such circumstances the issue may be remitted back to the file of Assessing officer where assessee will have due opportunity. 23. Learned A.R of the assessee strongly opposed to such a suggestion by the Sr. D.R stating that assessee is under no obligation to guide the Assessing officer on law, his duty is limited upto instructing the Assessing ....
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..... The petitioner claims that it is a 100% Export Oriented Unit, (the EOU) and its income is exempt under section 10 B of the Act. For the relevant assessment years, the assessments were completed under section 143(1). Along with the Income Tax Return, audited statement of account for the relevant assessment years along with the report of the statutory auditors under the Companies Act, Tax Audit Report under section 44-AB of the Act and statement showing computation of income were filed by the petitioner. Subsequent thereto, notices for reassessment for these two years were issued by the learned Assessing Officer on the ground that the income has escaped assessment to tax........". Therefore, the case is distinguishable on facts. 25. Learned Sr. D.R has placed reliance to Sri Banarsi Prasad vs CIT decided on 29 February, 2008, wherein no question of reopening was involved and the Hon'ble High Court , context of section 68 of the Act concluded its findings holding that "In the circumstances, the question referred is answered as above by holding that on the facts and circumstances of the present case, when the credits were received by the assessee from close relatives like his non-e....