TaxTMI 
TaxTMI 
2020 (2) TMI 82
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....f information received from Addl. Director of Income Tax (Inv.), Unit-V, New Delhi and after obtaining the necessary approval, notice under section 148 of the I.T. Act, 1961 was issued to the assessee on 26.03.2013. Statutory notices were issued for completion of the assessment proceedings. Whatever details were submitted by assessee were placed on record. The assessee also filed copy of the FIR stating that relevant documents have been stolen. The assessee in the assessment year under appeal derived income from business and profession only. The A.O. noted that information received from Addl. DIT (Inv.), New Delhi, Dated 16.03.2012 revealed that assessee had deposited unaccounted cash in his bank account amounting to Rs. 2,82,70,090/- during the F.Y. 2005-2006 relevant assessment year under appeal, and had made investments amounting to Rs. 94 lakhs from unexplained sources. The assessee vide letter stated that original return filed may be treated as return filed in response to notice under section 148 of the I.T. Act, 1961. The A.O. on the basis of the copy of the passbook placed on record and information received from Investigation Wing found that there is cash deposit of Rs. 2....
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....ssessee to show that actual cash deposited in various bank accounts of the assessee was Rs. 1,23,45,200/- which is supported by copies of the bank statements filed in the paper book. He has also highlighted that there are differences in cash deposits in various bank accounts of the assessee as per information received from Investigation Wing and actual cash deposited in the bank account of the assessee. He has referred to PB-128 which is summary of the investments in the properties. PB-138 is copy of the sale deed for Rs. 48 lakhs, which assessee has sold to Shri Gurdev Singh bearing property No.493, EBlock, Greater Kailash-II, New Delhi, which assessee has purchased from Dr. Rama Nand Jain through an Agreement to Sell, copy of which is filed at page-130 of the PB. He has, therefore, submitted that sale could not be an unexplained investment. He has referred to PB-159 which is Collaboration Agreement Dated 13.09.2005 with Shri Nilambar Rudrapal to whom assessee has paid Rs. 46,50,000/- through cash and banking channel for collaboration of the property. He has submitted that all the cash have been explained. The A.O. has clubbed the sale and properties together to make it as an unex....
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....9. We have considered the rival submissions. It is well settled Law that validity of the reopening of the assessment is to be determined with reference to the reasons recorded for reopening of the assessment. Learned Counsel for the Assessee filed copy of the reasons at page No.4 of the PB which reads as under: "Annexure: Reasons recorded for initiation proceeding u/s 148 of the I.T Act 1961 in the case of Shri S.N. Arora / Sapra (Som Nath), ARQPS5550E, ASEPS5018G The Addl, Director Income Tax (Inv), Unit-V, New Delhi, vide his letter Addl.DIT (Inv.)/U-V/2011- 12/251, dated 16.03.2012 had sent a report in the case of Shri S.N Arora / Sapra. As per the investigations made, the assessee had deposited unaccounted cash in his Bank account and also made large scale investment in the assets. The details are as follows :- 1. Unexplained cash deposit :- A.Y. 2006-07 Rs. 2,82,70,090/- 2. Unexplained investments :- A.Y. 2006-07 Rs. 94,00,000/- As per the above facts, the cash deposits and unexplained investments are liable to tax u/s 68 & 69 of the Income Tax Act, 1961. The income has escaped assessment in the case ....
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....e Commissioner itself proceeded on the erroneous basis that the quantum of income which had escaped assessment was Rs. 28,75,000 whereas the assessee had filed returns showing income of merely Rs. 20,56,145 and it was on this basis that the Additional Commissioner and the Commissioner granted their approval for reopening the assessment. Even though the assessee highlighted this fundamental error at the initiation of the case by stating that his income was mentioned as Rs. 20,56,145 instead of Rs. 69,71,191, this was summarily rejected stating that it was a clerical mistake and that the latter figure would be treated as his income. If the correct income i.e. Rs. 69,71,191 was put before the Commissioner at the time of seeking his approval, he might have taken a different view. There was nothing on record to show that the clerical mistake of substituting Rs. 20,56,145 for Rs. 69,71,191 was ever brought to the notice of the Commissioner either before or after approval or sanction under section 151(1) of the Act. The initiation of the case for reopening of the assessment was erroneous and without application of mind especially since the Assessing Officer had not examined the r....
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....., ITO, Ward-23(2), New Delhi (supra) in para-9 held as under : "9. We have heard both the parties and perused all the materials available on record. The issue relating to proceedings initiated u/s 148 whether the same is valid or not, has already been decided in assessee's own case for A.Y. 2007-08 by the Tribunal. The Tribunal held as under : "8. I have considered the rival submissions made by both the sides and perused the orders of the authority below. I find the AO on the basis of the information received from the investigation wing of the Department that the assessee has made cash deposit of Rs. 4,97,452/- reopened the assessment by issuing notice under section 148 and thereafter made addition of Rs. 4,97,452/- to the total income of the assessee by invoking the provisions of Section 68 of the I.T. Act, 1961. I find the learned CIT(A) upheld the action of the AO, the reasons of which have already been reproduced in the preceding paragraph. It is the submission of the learned counsel for the assessee that there is complete non application of mind of the AO while recording the reasons and he has not verified the facts properly and the reopening was made on the....
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....as per the audited balance sheet itself. Therefore, the Assessing Officer was not right in reopening the assessment which is bad in law and without any justified reasons for the additions. Thus, the appeal of the assessee is allowed." 9.6. The A.O. in the reasons recorded that "Investigation Wing has reported that there are unaccounted cash deposit in the bank account of the assessee in a sum of Rs. 2,82,70,090/-." Admittedly the bank pass books are available at the assessment record which fact is also mentioned by the A.O. in the assessment order. However, the Annexure-C supplied by the Investigation Wing to the A.O, copy of which is filed at page-6 of the PB, reveals that in fact there is a cash deposit in the bank account of the assessee was of Rs. 2,05,54,090/-. The Investigation Wing has advised the A.O. to go through the bank statements and other documents before arriving at the conclusion that there is escapement of income under section 148 of the I.T. Act. The assessee, on the other hand, has prepared a chart based on bank statements of various bank accounts to show that there is actual cash deposit of Rs. 1,23,45,200/- only. Thus, there is a huge di....
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.... Pr. CIT vs., Meenakshi Overseas (P) Ltd., 395 ITR 677 (Del.), the Hon'ble Delhi High Court held as under : "Reassessment notice condition precedent recording of reasons to believe that income has escaped assessment mere reproduction of investigation report in reasons recorded absence of link between tangible material and formation of ceding illegal Income Tax Act, 1961, Sec.147, 148" 9.9. In the case of Pr. CIT vs., G And G Pharma India Ltd., [2016] 384 ITR 147 (Del.), the Hon'ble Delhi High Court held as under : "Reassessment condition precedent application of mind by assessing officer to materials prior to forming reason to believe income has escaped assessment - No independent application of mind to information received from Directorate of Investigation and no prima facie opinion formedre-assessment order invalid". 9.10. In the case of Sarthak Securities Co. (P) Ltd., 329 ITR 110 (Del.), the Hon'ble Delhi High Court held as under : ["No independent application of mind by the Assessing officer but acting under information from Inv. Wing - Notice U/s. 147 to be quashed". 9.11. Considering the totality of the facts and circumstances of the case ....