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2020 (2) TMI 1036
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....over for sale/purchase of property No. 2/27, Subhash Nagar, New Delhi. The sale consideration for the said deal was fixed at Rs. 95,00,000/- and details of the same were also given in the agreement. But the sale deed was registered on 03.3.2008 for only Rs. 19,11,000/-. On the basis of this information, the reassessment proceedings were initiated u/s. 147 of the Act after taking approval of the Addl. CIT and notice u/s. 148 of the Act was issued upon the assessee on 27.3.2015. In response to the same, the AR of the Assessee appeared and filed a letter dated 27.4.2015 stating therein that the return filed under section 139 of the Act as return filed in compliance with notice u/s. 148 of the Act and also requested to provide copy of reasons recorded for issuing the notice u/s. 148 of the Act, which was provided by the AO to himself. Later on CBI also searched the premises of the assessee on 18.05.2019 and found the said agreement which was recovered and seized in which the details of receipt of money has also been mentioned. On the basis of the said documentary evidences seized by the CBI, the AO issued show cause notice dated 29.2.2016 to the assessee asking to explain why the ac....
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....or the assessee stated that assessee has challenged the reopening u/s. 147 of the Income Tax Act, 1961 on various grounds which have already been adjudicated and decided in favour of the assessee by the various decisions of the ITAT and the Hon'ble High Courts. He argued that the impugned order passed by the Ld. CIT(A) is without jurisdiction, erroneous and wrongly been passed, because the reassessment passed by the AO u/s. 143(3)/147 of the I.T. Act, 1961 is invalid on the basis of the notice u/s. 147 of the Act which is invalid and has been issued without applying his mind only on the basis of the Investigation Report of the CBI stating that the sale deed registered on 03.03.2008 between Sh. Kulwant Singh and the assessee for Rs. 19,11,000/- is under-valued whereas the agreement to sell and purchase of property dated 12.9.2007 executed between both the parties for Rs. 95,00,000/- which was recovered by the CBI from the premises of the assessee. Ld. Counsel for the assessee stated that the AO has not investigated the matter himself and has not made any enquiry to corroborate the Report of the Investigation on which basis the case of the assessee has been reopened, meaning thereby ....
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..... In view of above, he requested to quash the re-assessment. 4. On the contrary, Ld. DR relied upon the orders of the authorities below and has also filed the written submissions. For the sake of convenience, the written submissions are reproduced as under:- "Sub: Written Submission in the above case- reg. In the above case, it is humbly submitted that apart from relying on the decision of learned CIT(A) and oral arguments made by the undersigned, following facts and case laws may be considered w.r.t. various grounds of appeal filed by the assessee:- 1. The incriminating document/agreement was found and seized by the CBI which clearly establishes cash and cheque entries. As cheque entries are matching, so cash entries have to be taken as correct as well. The contents of the document have already been verified by experts of the forensic labs. 2. The assessee's argument that the assessee has been exonerated as co-accused by the CBI court has no bearing in this case. Ld. CBI court has only ruled that the assessee's income may not be clubbed with that of her husband Sh. J. K. Grover for corruption and dis-appropriate assets case. ....
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....closed) where Hon'ble Supreme Court held that in determining whether commencement of reassessment proceedings was valid it has only to be seen whether there was prima facie some material on the basis of which the department could reopen the case. The sufficiency or correctness of the material is not a thing to be considered at this stage 5. Dr Chhangur Rai Vs CIT (2017-TIOL-660-HC-ALL-IT ) where Hon'ble Allahabad High Court held that nondisclosure of corresponding income by the assessee so as to prove the source of investment in residential property, is sufficient for belief of escaped assessment. 6. Sonia Gandhi Vs ACIT (Delhi High Cou rt) [2018] 97 taxmann.com 150 (Delhi)/[2018] 257 Taxman 515 (Delhi)/[2018] 407 ITR 594 (Delhi) i) Where Congress Party gave loan to AJL and assigned said loan to non-profit company YI which subsequently issued shares to assessees at a price less than FMV, non- disclosure by assessees of allotment of shares in YI would be a reason to initiate reassessment proceedings. ii) Relying on PCIT Vs Mis. Meenakshi Overseas Pvt. Ltd. ITA No. 651/Del/2015 dated: 11.01.2016 (Delhi High Court) approval u/s 151 ....
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....ee on 18.05.2009 and found the said agreement which was recovered and seized in which the details of receipt of money has also been mentioned. On the basis of the said documentary evidences seized by the CBI, the AO issued show cause notice dated 29.2.2016 to the assessee asking to explain why the actual sale price of the property should not be considered at Rs. 95,00,000/- and Rs. 18,37,500/- and difference of Rs. 76,62,500/- should not be treated as unexplained income of the assessee and tax liability be computed accordingly. It is noted that AO has not investigated the matter himself and has not made any enquiry to corroborate the Report of the Investigation on which basis the case of the assessee has been reopened, meaning thereby the AO has not applied his mind and only issued notice u/s. 148 of the Act on the basis of the CBI Report which has later been thoroughly investigated by the CBI itself and assessee has been discharged by the CBI on the basis of the CBI Court decision. Since the basic Report of the CBI has remained no more and subsequent notice u/s. 148 of the Act is invalid and resultantly the reassessment is void ab initio. Thus, the AO has acted mechanically and wi....
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....e 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." iii) 395 ITR 677 (Del) Pr. CIT v. Meenakshi Overseas (P) Ltd. "36. In the present case, as already noticed, the reasons to believe contain not the reasons but the conclusions of the AO one after the other. There is no independent application of mind by the AO to the tangible material which forms the basis of the reasons to believe tha....
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.... CIT, Range-45, New Delhi has not recorded proper satisfaction and without application of mind gave the approval in a mechanical manner. Keeping in view of the facts and circumstances of the present case and the case laws applicable in the case of the assessee, I am of the considered view that the reopening in the case of the assessee for the asstt. Year in dispute is bad in law and deserves to be quashed. My aforesaid view is fortified by the following decisions including the ITAT, SMC, Bench, New Delhi decision dated 16.10.2019 in the case of Dharmender Kumar vs. ITO, Ward 65(5), New Delhi decided in ITA No. 2728/Del/2018 relevant to assessment year 2008-09 wherein the following case laws were followed on similar facts and circumstances of the case. A) United Electrical Company (P) Ltd. Vs. CIT & Ors. 258 ITR 317 (Del.) In this case, approval by the Addl. CIT u/s. 151 was given in the following terms:- "Yes, I am satisfied that it is a fit case for issue of notice u/s. 148 of the Income Tax Act." Analyzing, the above satisfaction/approval, it has been held that the CIT is required to apply his mind to the proposal put up to him for approval in the light....
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....-1(2). New Delhi vide F. No. ADIT(Inv)/ Unit1(2)/ 2014-15/776 dated 10.3.2015 regarding alleged property transactions between Smt. Arina Grover w/o J K Grover and Sh. Kulwant Singh. 2. Agreement to sale was executed between Smt. Arina Grover w/o Sh. JK Grover and Sh. Kulwant Singh for the purchase of property i.e. 2/27, Subhash Nagar. Tihar-1. New Delhi for Rs. 19,11,000/- which was registered on 14.02.2008, a General Power of Attorney was also executed by Sh. Kulwant Singh in favour of Sh. J K Grover in respect of said property i.e. a double storey built up property. 3. Investigation of CBI further revealed that again a sale deed was executed on 03.03.2008 between Sh: Kulwant Singh res 2/27, Subhash Nagar, New Delhi and Mrs. Arina Grover w/o J K Grover r/o 3/16. Subhash Nagar. New Delhi for purchase of the property located at 2/27. Subhash Nagar, New Delhi for Rs. 19.11.000/- and registered on 04.03.2008. The details of payments are as under:- 1 Rs 5,00,000/- through Cheque No. 478018 drawn on IDBI Bank, Rajouri Garden, New Delhi dated 12.09.2007. 2 3 4 5 4. Rs. 7,50,000/- through Cheque No. 223232 drawn on Ba....