TaxTMI 
TaxTMI 
2020 (8) TMI 589
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....385336.00 on account of credit card payment without considering the bank account of assessee and simultaneously ld. CIT (A) sustain this addition, which is liable to be deleted. 4. Necessary cost to be allowed to the assessee. 5. Assessee deserves the right to add, amend or delete the ground of appeal on or before the hearing of appeal." Ground No. 1 is regarding validity of reopening of the assessment. 2. The assessee is an Individual and earning income from salary. The AO issued notice under section 148 on 22nd March, 2015 by recording the reasons that as per AIR data information received from the Office of the DIT CIB Rajasthan, Jaipur showing that the assessee has paid Rs. 3,85,336/- against credit card bills in the financial year 2008-09 relevant to the assessment year under consideration, hence it was not possible to verify the tax liability in this transaction. Further, the assessee has not filed return of income for the year under consideration, therefore, believing that the income to the tune of Rs. 3,85,336/- has escaped assessment, the AO reopened the assessment. Since assessee has not responded to the notice under section 148 as well as the other notices issued by....
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.... quashed. 4. On the other hand, the ld. D/R has submitted that the AO has reopened the assessment based on the AIR information regarding the credit card payment of Rs. 3,85,336/-. Thus at the time reopening of assessment what is required to be seen is the prima facie reason to believe that income assessable to tax has escaped assessment. She has relied upon the orders of the authorities below. 5. We have considered the rival submissions as well as the relevant material on record. It is manifest from the reasons recorded by the AO in the assessment order that the AO received the information about the credit card bills payment of Rs. 3,85,336/- and further the AO recorded the fact that since the assessee has not filed any return of income, therefore, it is not possible to verify the said transaction and tax liability in this transaction. These reasons recorded by the AO are factually not correct and the formation of belief by the AO is actually based on assumption of incorrect facts. We find that the assessee has filed his return of income on 09.07.2010. Though the return was belated, however, the same was acknowledged by the department vide Acknowledgement No. 3471, the copy of th....
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....Rs. 3,85 lacs and hence tax liability is not possible to be ascertained. 2. Further, no return of income was filed for the year. Your honour, in both the observations, no belief of positive escapement of income emerged. Section 148 does not give mandate to ascertain the tax liability. Pre-condition of jurisdiction u/s 148 was reason to believe that any income has escape assessment. The word used here is belief. No re-opening is possible on suspicion and on surmises. Further, the allegation that return of income was not furnished is wrong, Assessee had furnished the return of income for the year. In fact, due to oversight, omission or clerical mistake the departmental staff punched the data of return of assessee for A.Y. 2009-10 in A.Y. 2010-11. And that's why the system at the time of re-assessment showed the status of non-filing of return. Return of income for A.Y. 2009-10 was filed on dated 09.07.2010 in paper form. The income and deductions and TDS were as under :- A. Income Rs. 285414.00 Verifiable from Form No. 16 B. Deduction u/s 80C Verifiable from Form No. 16, LIP Receipts and Bank Statement. C. TDS of Rs. 27810.00 Form No. 16 & Form No. 26AS But, assesse....
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....; Income Tax Officer, Ward 2(1), Jaipur." Thus the reasons recorded by the AO for formation of belief that income assessable to tax has escaped assessment are based on two counts. One, the assessee has made bogus purchases and the second, that the purchases are not verifiable as the assessee has not filed the return of income. Thus the formation of belief is based on these two factual aspects that the assessee has made bogus ....
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....ee had actually filed the return of income for the said assessment year and income also offered his share of the declared sale consideration to tax as capital gain. The Assessing Officer may have dispute with respect to computation of such capital gain, he cannot simply dispute the fact that the assessee did file the return. Importantly, even the second factual assertion of the Assessing Officer in the reasons recorded is totally incorrect. He has referred to said sum of Rs. 1,18,95,000/- as a sale price of the property. The assessee had produced before the Assessing Officer, the sale deed in which, the sale consideration disclosed as Rs. 50 lakhs." Thus making the wrong statement in the reasons recorded and ignoring the relevant and correct facts available on record established that the AO has not applied his independent mind while forming the opinion. The Chandigarh Bench of the Tribunal in case of Baba Kartar Singh Dukki Educational Trust vs. ITO (supra) has also considered an identical issue and held that the AO proceeded for reopening of the assessment for non-existent and factually incorrect reasons and has not applied his mind. The Tribunal has concluded in para 19 as unde....