AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2021 (4) TMI 904
X X X X Extracts X X X X
X X X X Extracts X X X X
....section 271A & 271B ignoring the fact that the commission should be treated as turnover of the assessee and not the deposits in the account. The Ld. Appellate authority is hereby prayed to hold such action as illegal. 3. On the facts & circumstances of the case, the Ld.CIT(A) erred in confirming the action of Ld. A.O. of reopening of the assessment under section 147/148 as proper sanction U/s 151 was not obtained before issuing notice. The Ld. Authority is prayed hereby to render such action as illegal. 4. The appellant hereby craves leave to add, alter, amend or substitute one or more grounds of appeal at the time of hearing." The assessee has also taken an additional ground, which is reproduced as under: "Ground No. 5: On the facts and circumstances of the case, the impugned assessment order passed by the AO u/s. 147/143(3) of the Act is invalid and void ab initio for want of valid notice u/s. 143(2) as per law as evident from fact that when return in response to notice u/s. 148 was admittedly filed on 13.10.2017, notice u/s. 143(2) is issued on very same day that is 13.10.2017 which shows non application of mind in issuing notice u/s. 143(2) and the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nd No. 2 of appeal is dismissed as not pressed. Therefore, on the prayer of the assessee, we dismiss ground No. 2 of the appeal being not pressed. 7. Ground No. 1 of the appeal raised by the assessee relates to challenging the order of the ld. CIT(A) in confirming the action of the A.O. in assessing the income of the assessee at Rs. 20,37,281/-. The ld. AR appearing on behalf of the assessee has reiterated the same arguments as were raised before the ld. CIT(A) and also relied on the written submissions filed before the Bench and the same is reproduced below: "Brief facts of the case are that the assesse was issued notice under section 148 on 27.03.2017. In pursuance of same, assesse filed her return of income in pursuance of said notice on 13.10.2017 declaring total income of Rs. 101864.00 as commission income from letting out her bank account for the purpose of accommodation entries. The return of income was filed manually and a copy of computation of income filed by the assesse is enclosed as a part of paper book as Page No. 1. The assessment in this case 6s completed under section 143(3) rws 147 of the act treating entire deposits of Rs. 46745628.00 in her account a....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the commission income as his account was misused by some other person. This is evident from the letter dated 11.12.2017 sent by Ld. A.O (copy enclosed at page no. 52-53 of paper book) for seeking directions U/s 144A of the act where he mentioned as under: "Hence, in the above facts and circumstances, it appears that the assesse is totally unaware about the transactions recorded in above bank account and it appears to have used this account by someone else for other purposes. Deposit of cheque and immediately withdrawal in cash does not indicate the normal trading activities in the business. This type of modus operandi is generally found in the; case of accommodation entries by issue of bogus sale bills. In such type of work, after receiving the money through cheque, entire amount after deducting the commission is returned to the party". A.O also referred in said letter about case of Hansa Vijay for assessment year 2007-08 where only commission income was assessed. Now the extract as well as entire letter shows the stand of the Ld. A.O on the nature of transactions. However, on directions from Ld. JCIT, he inquired from the commercial tax department where he got t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....2009 dated 07.05.2010 and further the H'ble Rajasthan High Court dated 14.10.2011 in DBIT No. 289/2010 dated 14.10.2011. However, the assessee is entitled to additional relief as the facts in the alleged case are distinguishable from the facts in question in this case. In the said case, the assessee was a businessman actively carrying on business whereas in the present case, she was just a housewife and wife of a labour whose account was misused and who never carried on any, business. Thus, by no stretch of mind her misused bank account receipts can be reckoned as turnover. The relevant extracts of that decision are as follows: "We have heard both the parties. The Tribunal vide order dated 29th May. 2009 in the case of Shri Ram Swaroop in ITA No.113/JP/2009 for the A.Y. 2005- 06 had an occasion to consider the cash deposits of Rs. 22.86 lakhs made in the account of Shri Ram Swaroop in IDBI Bank. The deposits were similar of the nature as are available in this case. The Tribunal after considering the facts of the case held that income of Rs. 1.25. lacs to be estimated and accordingly directed the AO to add the same of Rs. 1.25 Lacs as against cash depo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ve facts which is enclosed at paper book Page No. 51. On filing of affidavit by the assessee, the Ld. A.O skipped to cross examine the facts mentioned therein and controvert them or accept them. A.O also referred in said letter seeking directions U/s 144A about case of Hansa Vijay for assessment year 2007-08 where only commission income was assessed. Another order of Ramgopal vs ACIT Jaipur dated 28.02.2013 was referred to by the assesse during assessment proceedings where only commission income was assessed in such cases. Thus, it could be clearly concluded that the turnover in bank was not the turnover of the assessee related to any business carried on by her. The Ld. CIT(A) rejected the contentions of the assesse summarily mentioning that assesse did not discharge her onus of proving the fact that the credits in account of assesse was not her turnover (Copy of appellate order appended as part of paper book Page No. 20-27). However, the Ld. CIT (A) failed to take into account various evidences as mentioned above and enlisted below again given by the assesse or available on record in support of her contentions: a. Inquiry by department ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of the assesse. As an alternative plea, it is hereby prayed to the bench that in case the H'ble bench also treats it as turnover of the assesse, a net profit rate of 0.5% may be applied considering the facts of the case." 8. On the other hand, the ld DR has relied on the orders of the revenue authorities. 9. We have considering the rival contentions of both the parties and have perused the material placed on record. We have also deliberated upon the decisions cited in the orders passed by the authorities below as well as cited before us and we have also gone through the orders passed by the revenue authorities. From perusal of the record, we observe that the ld. CIT(A) has dealt with the issue in para 2.3 to 2.3.2 of her order and the same is reproduced below: "2.3 I have perused the facts of the case, the assessment order and the submissions of the appellant. It is seen that the Assessing Officer treated the entire deposit in bank account of assessee as sale of assessee and estimated net profit by applying net profit rate of 5%. The Ld. Authorized Representative argued that assessee was housewife not doing any business. She allowed Mr. Sitaram Khandelwal to use ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nfirming the action of the A.O. of reopening of the assessment U/s 147/148 as proper sanction U/s 151 was not obtained before issuing notice. The ld. AR of the assessee has reiterated the same arguments as were raised before the ld. CIT(A) and relied on the written submissions filed before the Bench and the same is reproduced below: "On the facts and circumstances of the case, the reopening of the assessment under section 1471148 is bad in law as proper sanction U/s 151 was not obtained before issuing notice. The Ld. Pr CIT -II wrote only 'Yes' while recording sanction as per section 151. In addition to this, the additional CIT also wrote only yes and that too even 'undated. This clearly shows that sanction was accorded in a mechanical manner without application of independent mind by the Ld. Authorities. Thus, such an approval is no approval in the eyes of the law having been granted without application of mind. The Ld. CIT(A) also while making his order did not adjudicate this ground at all. We draw the attention of the H'ble Bench to Page 7 & 8 or order where the question raised by the assesse was regarding sanction under section 151 of the act ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mencement of reassessment proceedings was valid, the court has only to see 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 anything to be considered at that stage. The "reason to believe" would mean cause or justification. If the Assessing Officer has cause or justification to know or suppose that income had escaped assessment, he can be said to have reason to believe that an income had escaped assessment. The expression cannot be read to mean that the Assessing Officer should have finally ascertained the fact by legal evidence or conclusion and what is required is "reason to believe", but not the established fact of escapement of income. At the stage of issue of notice, the only question is whether there was relevant material on which a reasonable person could have formed a requisite belief. In view of above finding I do not find any legal infirmity on the plea of the appellant. Therefore, the Assessing Officer rightly initiated the proceedings u/s 148 of the Act. The additional ground of appeal is dismissed." The ld. CIT(A) has held that he A....