TaxTMI 
TaxTMI 
2021 (2) TMI 850
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.... which bears Account No.xxxxx13022 and reflects the credit of Rs. 1.37 crores. As per the report, transaction was found to be without any economic rationale and it is suspected that money laundering activities were being carried-out. The assessee has not filed return of income for the A.Y. 2010-2011. The A.O. has recorded reasons for reopening of the assessment, copy of which is filed at pages 1 to 4 of the PB and after taking administrative approval Dated 31.03.2017, issued notice under section 148 of the I.T. Act, 1961 on Dated 31.03.2017 which was served upon the assessee, however, no return has been filed in response to the notice under section 148 of the I.T. Act. During the assessment proceedings summons under section 131 of the I.T. Act, 1961 was issued for personal deposition of the assessee. The assessee appeared before the A.O. and statement of Shri Bishan Sharup Gupta [Assessee] Proprietor of M/s. Yogesh Trading Co. was recorded in which he has explained that he has maintained two bank accounts i.e., Ramgarhia Cooperative Bank, Paharganj, Delhi bearing Account No.xxxxx2211 and Oriental Bank of Commerce, Chandni Chowk bearing Account No.xxxxx1421. The assessee stated t....
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....an Cooperative Bank, Ghaziabad. It is also a fact that no amount of Rs. 1.37 crores alleged to have been escaped assessment belonging to the assessee. The A.O, therefore, recorded wrong, incorrect and non-existing reasons in the reasons for reopening of the assessment. Thus, the reopening of the assessment have been done without application of mind and liable to be quashed. Same view have been taken by ITAT, Delhi E-Bench, Delhi in the case of Shri Natarajan Monie, Gurgaon vs., ITO, Ward-2(5), Gurgaon in ITA.No.1817/Del./2017 vide Order Dated 07.12.2020 after following several decisions of different High Courts and quashed the reopening of the assessment in the matter. The issue is, therefore, covered by the aforesaid Order of the Tribunal. The same is reproduced as under : "IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES "E" : DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA.No.1817/Del./2017 Assessment Year 2011-2012 Shri Natrajan Monie, S-19/001, The Close South, Nirwana Country, Sector-50, Gurgaon. PAN AAFPN2890N vs. The Income Tax Officer, Ward - 2 (5), Gurgaon. (Appellant) (Re....
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....st as discussed in para 3.2. Rs. 1,59,237/- 3. Income from MCX business as discussed in para 3.3. Rs. 7,72,461/- 4. Income from unexplained cash deposits as discussed in para 3.4 Rs. 59,50,000/- 5. Income from unexplained cash credits as discussed in para 3.5(i). Rs. 9,85,000/- 6. Income from profit on redemption of MF/FD as discussed in para 3.5(ii) Rs. 1,32,174/- TOTAL Rs. 84,37,210/- 3.1. The assessee challenged the reopening of the assessment as well as additions on merit before the Ld. CIT(A). However, the appeal of assessee has been partly allowed. 4. Learned Counsel for the Assessee referred to the reasons recorded for reopening of the assessment which have been provided to the assessee under RTI Act, copy of which is placed on record. He has submitted that A.O. in the reasons mentioned that assessee has made investment of Rs. 2 lakhs for purchase of mutual fund and transaction of commodities exchange contract of Rs. 10 lakhs in assessment year under appeal. He has submitted that A.O. has recorded wrong, incorrect and non-existing reasons and did not apply his mind to the material on record bef....
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....see had made investment of Rs. 200000/- for purchase of mutual fund and transaction in commodity exchange contract of Rs. 10,00,000/- during the assessment year 2011-12. As per record assessee do not have file return of income for the Assessment year 2011-12. The income chargeable to tax amounting to Rs. 1200000/- which is chargeable to tax has escaped assessment and any other income found during the course of assessment proceedings which is chargeable to tax has escaped assessment. I have reasons to believe that the above said income/transaction of Rs. 1200000/- and any other income found during the course of assessment proceedings which is chargeable to tax has escaped assessment which needs examination in the light of the information in my possession. Notice under section 148 of the Income Tax Act, 1961 is being issued. Sd/- Shamsher Singh Income Tax Officer Ward 2(5), Gurgaon." 6.1. In view of the above reasons, the A.O. has mentioned that he has information received through NMS that assessee has made investment of Rs. 2 lakhs for purchase of mutual funds and transaction of commodity exchange contract of Rs. 10 lakhs in assessment year under appeal an....
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....hich fact is also incorrect and is contradictorily recorded in the reasons for reopening of the assessment for Rs. 2 lakhs only. The A.O. in the assessment order has also recorded same statement that assessee has made contract in commodity exchange exceeding Rs. 10 lakhs which fact was ultimately found incorrect by the A.O. himself and he has made part addition as against the income mentioned in the show cause notice. These facts clearly show that A.O. did not apply his mind to the information received through NMS and also recorded wrong, incorrect and non-existing facts in the reasons recorded for reopening of the assessment. Learned Counsel for the Assessee has also referred to page-14 which is supplied to the assessee under RTI which according to assessee was asked under the RTI Act. The first page of the RTI reply PB-10 shows that assessee has asked for the copy of the reasons for reopening of the assessment as well as details which are basis of reopening of the case under section 148 of the I.T. Act, 1961. Page-14 is the material supplied by the A.O. which is the information summary in which information is supplied to assessee through CIB Code that there is a deposit ....
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....erefore, the Income-tax Officer did not get jurisdiction to make the reassessment." 6.3. The Hon'ble Delhi High Court in the case of Pr. CIT vs., SNG Developers Ltd., [2018] 404 ITR 312 (Del.) in which it was held as under : "Held, dismissing the appeal, that the reasons recorded by the Assessing Officer for reopening the assessment under section 147, issuing a notice under section 148 did not meet the statutory conditions. As already held by the Appellate Tribunal, there was a repetition of at least five accommodation entries and the total amount constituting the so-called accommodation entries would therefore, not work out to Rs. 95,65,510. It was unacceptable that the Assessing Officer persisted with his "belief" that the amount had escaped assessment not only at the stage of rejecting the assessee's objections but also in the reassessment proceedings, where he proceeded to add the entire amount to the income of the assessee. Therefore there was non-application of mind on the part of the Assessing Officer. The Appellate Tribunal was justified in confirming the order of the Commissioner (Appeals) and holding that the reopening of the assessment was bad in law." ....
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....ear 2001-02 and as such could not have been made applicable to the assessment year 1999-2000 and the notice had been issued under the mistaken belief about the correct position of law. However, opportunity to show cause was given to the petitioner as to why the loss claimed should not be disallowed to be carried forward. On a writ petition : Held, allowing the petition, (i) that it would be clear from the reasons given that the authority proceeded on the presumption that the law applicable was the law after the amendment and not the law in respect of which the petitioner had filed the return for the year 1999-2000. This by itself clearly demonstrated that there was total non-application of mind on the part of the authority and consequently, the notice based on that reason would amount to non-application of mind. (ii) That the income derived by the assessee from an industrial undertaking to which section 10A applies could not be included in the total income of the assessee. Therefore, the petitioner was right in filing the return by excluding the income in terms of section 10A." 6.6. In the case of Pr. CIT vs., RMG Polyvinyl (I) Ltd., 396 ITR 5 (Del.) the ....