AI Drafter 
TaxTMI 
TaxTMI 
2020 (1) TMI 1274
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.... of the "Act" got wholly vitiated on account of infirmity in the reasons recorded by the Assessing Officer, and consequently "CIT(A)" should have quashed the reassessment order dated 04.03.2016 passed u/s. 143(3)/147 of the "Act". 4. BECAUSE the reasons were recorded only with a view to verify the source of cash deposits in the savings bank account which narration did not amount to requisite satisfaction for belief of escapement of income and owing to such a fundamental deficiency in the recording of reasons, the entire proceedings of assessment in pursuance of such reasons got wholly vitiated and consequently assessment order dated 04.03.2016 deserved to be quashed. 5. BECAUSE mandatory notice under section 143(2) of the "Act" was not issued after filing of return in response to notice u/s. 148 of the "Act", the assessment order passed u/s. 143(3)/147 of the "Act" deserved to be quashed. 6. BECAUSE without prejudice to the aforesaid grounds and in any case, no addition having been made on the basis of reasons recorded for escapement of income, the addition of Rs. 5,46,127/- on account of suppressed income paid as liability in the O.D. account in the bank....
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....tion 147 of the Income Tax Act, 1961. Sd/- (Gulab Singh) Income Tax Officer II, Faizabad" 3. Arguing Ground no. 4 first, the ld. Counsel for the assessee has submitted that the reasons were recorded only with a view to verify the source of the cash deposits in the savings bank account, which did not amount to requisite satisfaction for belief of escapement of income, and owing to such a fundamental deficiency in the recording of the reasons, the entire proceedings of the assessment, in pursuance of such reasons, got wholly vitiated and consequently the assessment order dated 04.03.2016 deserves to be quashed. The ld. Counsel for the assessee has placed reliance on the order of the ITAT Delhi Bench in 'Bir Bahadur Singh Sijwali, Haldwani vs. ITO, Haldwani' in ITA No. 3814/Del/2011(copy placed on record). 4. This issue, it is seen, has been raised for the first time, before this Tribunal. However, this being a legal issue, going to the root of the matter and not requiring anything further to be brought on record, can be so allowed to be raised. It is so ordered. 5. Heard. In 'Bir Bahadur Singh Sijwali' (supra), it has been held, int....
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....the particular year because of his failure to disclose fully and truly all material facts. It is no doubt true that the Court cannot go into sufficiency or adequacy of the material and substitute its own opinion for that of the ITO on the point as to whether action should be initiated for reopening assessment. At the same time we have to bear in mind that it is not any and every material, howsoever vague and indefinite or distant, remote and farfetched, which would warrant the formation of the belief relating to escapement of the income of the assessee from assessment. 8. Let us, in the light of this legal position, revert to the facts of the case before us. All that the reasons recorded for reopening indicate is that cash deposits aggregating to Rs. 10,24,100 have been made in the bank account of the assessee, but the mere fact that these deposits have been made in a bank account does not indicate that these deposits constitute an income which has escaped assessment. The reasons recorded for reopening the assessment do not make out a case that the assessee was engaged in some business and the income from such a business has not been returned by the assessee. As we do not ....
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....therefore, income chargeable to tax had escaped assessment" and we are unable to see anything on the facts of the present case which are materially similar to the facts of the said case. As regards her reliance on the decision of a coordinate bench in the case of Mithila Credit Services Limited Vs ITO (ITA No. 1078/Del/2013; order dated 23.5.2014), it is important to bear in mind the fact that it was a case in which the Assessing Officer had reopened the assessment on the basis of receipt of information from Directorate of Investigation, and, as noted by the Assessing Officer in the reasons recorded for reopening the assessment, "the name of the assessee figures as one of the beneficiaries of these alleged bogus transactions" in the information given by the directorate. If the assessee was a beneficiary of such a scam, the income was indeed to have been taxed in its hands but then in the case before us the only reason for reassessment proceedings was the fact of deposit of bank account which by itself does not lead to income being taxed in the hands of the assessee. Learned Departmental Representative has referred to several other judicial precedents in support of the proposition t....