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2021 (4) TMI 1025
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....A No.3247/Del/2016 as the lead case. Facts of the case, in brief, are that the assessee is an individual and is not ordinary resident as mentioned by the Assessing Officer in clause 5 of page1 of the assessment order. The Assessing Officer in the instant case, reopened the assessment after recording the following reasons:- "Reasons for reopening u/s. 147 of the Income Tax Act, 1961 in the case of Late Sh. LadliPershadJaiswal through all his legal heirs for the A.Y. 2006-07. Information has been received in this case from the Investigation Wing, Delhi. As per information Late Sh. Ladli Pershad Jaiswal was having a bank account with HSBC Geneva with client profile names 4487AA, 22628AA and Searose foundation having client profile codes 5091264834, 5091262009 and 5091195751 respectively. BUP_SIFICJPER_ID of Late Sh. Ladli Pershad Jaiswal is 5090130944. Late Sh. Ladli Pershad Jaiswal has expired and Sh. Jagajit Jaiswal, Sh. Karamjeet Jaiswal and Sh. Anand Pershad Jaiswal are his sons and his legal heirs. The maximum outstanding balance in client profile name 22628AA during the period F.Y. 2005-06 was USD 3048891.78 (Rs. 13,70,47,686/-) in January ....
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....he Income Tax Act, 1961 (in short 'the Act') to the assessee. During the course of assessment proceedings, The Assessing Officer noted that the assessee has filed his return of income on 28.07.2006 at income of Rs. 6,92,310/-. This return has been filed in the status of not ordinarily resident in the International Taxation Circle-1(Del.). He noted that the assessee has been filing return of income in the status of nonresident from the Assessment Years 1993-94 to 2004-05. Since, Shri Ladli Pershad Jaiswal has died on 11.08.2005, a notice was sent to his legal heir. Subsequently, notice u/s 142(1) of the Act was issued in which a consent & waiver form relating to the disclosure of information and giving consent to the HSBC authorities to share information with the Indian Revenue Authorities in respect of bank accounts was sent to the assessee. 4. The assessee explained that the return already filed u/s 139(1) of the Act should be treated as return filed in respect of notice u/s 148 of the Act. The assessee also requested to provide the reasons for reopening of assessment u/s 147/148 of the Act. which were duly provided to the assessee. 5. The assessee filed his objections for r....
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....there Is no disclosure of Income from asset located outside India does not give Immunity to the assessee from assessment or reassessment of such undisclosed income subsequently. 3. In view of the above, the assumption of jurisdiction u/s 147 is perfectly legal and correct. 4. As regards claims of the assessee being Non-Resident since A.Y. 1993- 94 to 2004-05 and being Not Ordinary Resident in A.Y. 2006-07 & 2007- 08, firstly the onus to prove residential status for all these years is on the assessee [in this case Legal Heir). Apart from written submission, no supporting documents/evidence etc have been filed from where the status could be ascertained. The assessee is requested to provide the details in order to substantiate its claim that he was non-resident and/or not ordinary resident during above period and that the income In relation to the assets located outside India accrues & arises to him outside India. In the absence of any such evidence and explanation, the assessee's income in relation to asset located outside India cannot be held to be the income accruing/arising outside India and in such a situation, the argument of the assessee that it cannot be subj....
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....e source of such deposits is out of the income earned in India on which due taxes have been paid. In either case, the assessee has not provided complete trail of the funds leading to such deposits. In view of the discussion made in paras above on the nature & purpose/planning of making fiduciary deposits in Swiss banks and failure on the part of the assessee to explain the source of such deposits, it cannot be held that such deposits are out of the incomes earned from out of India by the non-resident assessee or not ordinary resident assessee." 8. During the course of assessment proceedings, the Assessing Officer noted that the assessee has filed return of income disclosing earning of interest income on income tax refund for earlier years and interest from saving bank account and the total returned income was Rs. 6,92,310/-. Vide letter dated 15.07.2014, the assessee filed a letter before the AO that he has no knowledge of bank account at HSBC Private Bank (Swiss)S.A. It was further stated that similar reply was filed before Dy. Director (investigation) Unit-6, Delhi. 9. The Assessing Officer asked the assessee to inform the date and period of making the initial d....
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....ngs u/s. 148 are illegal, arbitrary and without jurisdiction in the absence of tangible material and recording of proper satisfaction. 2. That in the absence of Assessing Officer having authentic copy of any such account or proper appreciation of nature of entries in the bank account, there could be no justification for recording of satisfaction and assumption of jurisdiction u/s. 148 of the I.T. Act, 1961. 3. That even otherwise, reassessment proceedings are not sustainable as same were without requisite approval in terms of provisions of sec. 251 of the I.T. Act, 1961. 4i). That CIT(A) having confirmed the addition on substantive basis in the case of Anand Pershad Jaiswal, there is no justification for holding the same on protective basis in the case of appellant. (ii) That the observation and conclusion of the CIT(A) are illegal, arbitrary and against the scheme of the act. 5(i). That on the facts and circumstances of the case, the CIT(A) has erred in confirming addition of Rs. 13,70,47,687/- on protective basis in the case of the appellant. (ii). That whole basis of addition is illegal, arbitrary and merely based on presumpt....
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....ssing Officer has reopened the assessment in a mechanical manner, therefore such reopening of assessment has to be treated as null and void. 14. He submitted that the Assessing Officer in utter disregard of the provision of law and facts of the case made substantive addition of Rs. 13,70,47,686/- being the peak balance in the bank account in the hands of Sh. Karamjit S. Jaiswal in the capacity of legal heir of the assessee and protective basis in the hands of the Sh. Anand Pershad Jaiswal in AY 2006-07. 15. He submitted that the dispute in the instant case relates to the foreign bank account and despite repeatedly being asked no certified copy of the same was made available to the assessee. He submitted that the reassessment proceedings in the instant case are without jurisdiction and bad in law as the reasons recorded failed to satisfy the jurisdictional requirement of section 147 of the Act. He submitted that the Assessing Officer in the instant case has assumed jurisdiction merely on the basis of unsubstantiated information from the Investigation Wing and without application of independent mind by him or carrying out any enquiry. Further, Sh. Ladli Pershad Jaiswal was a....
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....sons in the assessment order, there is no reference to fact, finding or evidence to the effect that there is any undisclosed income in terms of section 5(1) of the Act and the same has any nexus with the deposit in the said overseas bank account. He submitted that undisputedly, the assessee expired on 11.08.2005, therefore, how could there be any undisclosed income in relation to deposit in January 2006. 19. Referring to the two unauthenticated sheets of paper as provided by learned CIT(DR) is concerned, he submitted that as per the reasons, addition was in respect of credit in the said account in January 2006 which was in relation to maturity of old bonds and there is no case of any fresh deposit or credit based on cash or cheque entry. He submitted that despite specific request, the learned DR also could not provide certified copy of the said account and any evidence in respect of substantial interest of the assessee with Milkfood Ltd. and Jagatjit Industries Ltd. during the relevant assessment years and the basis for presumption of undisclosed income and nexus of same with deposit in overseas bank account. 20. As regards the issue of foreign bank account is concerned, the ....
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....ccount maintained with HSBC Bank Geneva, in the joint name of Sh. Ladli Pershad Jaiswal (deceased) and Sh. Anand Pershad Jaiswal with Client Profile 22628AA. The reason for such reopening has already been reproduced in the preceding paragraphs. It is the submission of the learned counsel for the assessee that such reassessment proceedings u/s 147 of the Act is without jurisdiction and bad in law, since, the reasons recorded are based on report of the Investigation Wing and not on due application of independent mind by the Assessing Officer or carrying out any enquiry. Further, according to the learned counsel for the assessee, although the Assessing Officer can make protective addition however, the learned CIT(A) has no authority to make addition on protective basis in one hand and substantive basis in another hand. He cannot evade determination of issue as to who is owner of real income when it was brought before him by way of an appeal. It is also his argument that when the assessee was nonresident upto AY 2004-05 and thereafter was not ordinarily resident for AY 2006-07 and 2007-08 and when Sh. Ladli Pershad Jaiswal expired on 11.08.2005 and when the amount credited in the bank ....
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.... also could not produce the details and the issue involved in the instant case are important being deposits in the foreign bank account, we proceed to adjudicate the addition on merit. 25. As mentioned in the preceding paragraphs, the Assessing Officer had made addition of Rs. 13,70,47,686/- on substantive basis in the hands of the Sh. Karamjit S Jaiswal and on protective basis in the hands of Sh. Anand Pershad Jaiswal. We find the learned CIT(A) converted the substantive addition into protective addition on the ground that the coowner of the foreign bank account was Sh. Anand Pershad Jaiwsal and as such Sh. Anand Pershad Jaiswal should be treated as legal heir and owner of the bank account post demise of assessee late Sh. Ladli Pershad Jaiswal. According to him merely because Sh. Karamjit S. Jaiswal filed the ITR as legal heir of the assessee late Sh. Ladli Pershad Jaiswal, the same will not absolve Sh. Anand Pershad Jaiswal of his liability as legal heir. According to the learned CIT(A) , there is no estoppels against law. 26. Before proceeding into legality of addition we deem it proper to address the issue raised by the learned counsel for the assessee regarding the pr....
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....ies have not provided certified copy or any authentic copy of bank account. Despite the direction given by the Bench, the learned CIT-DR also could not produce certified copy of bank statement and what is available in the paper book is photocopy of sheet of paper which is not capable of being converted into evidence. We find neither the Assessing Officer nor the learned CIT(A) could provide the nature of entry in the said account or how the same are related to undisclosed income under the provisions of Income Tax Act. We are constrained to observe that even though the entire premises of reopening and consequential of addition is the foreign bank account, none of the parties was able to produce a copy of bank statement before us which is a crucial piece of evidence. Under these facts and circumstances, we are not in a position to verify the authenticity of the alleged bank statement or quantum or nature of deposits therein and its relevance for the year under consideration. 28. We find from a perusal of the assessment order, that the Assessing Officer himself has mentioned that the assessee late Sh. Ladli Pershad Jaiswal was non-resident of India during AY 1993-94 to 2004-05 and ....
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....redit entry in the said bank account. In case, there is no ground or basis to establish any nexus between the alleged deposits in the bank account and any undisclosed income under the provisions of Income Tax Act or how such credit entries are attributable to the assessee who expired on 11.08.2005 there will be no case for assuming jurisdiction u/s 148 or consequential addition on merit. Needless to say the AO shall give due opportunity of being heard to the assessee and decide the issue as per fact and law after providing relevant documents or evidences that may be taken into consideration while deciding the issue. It is further clarified that the Assessing Officer shall restrict his verification only on the basis of documents which are already available on record and shall not resort any roving and fishing enquiry is permitted. The grounds raised by the assessee are accordingly allowed for statistical purposes. 29. Grounds raised in other appeals are as under:- ITA No.3248/Del/2016 1. That on the facts and circumstances of the case, the CIT(A) was not justified in confirming initiation of reassessment proceedings u/s. 148 even though initiation of proceedings....
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.... validity of re-assessment proceedings without appreciating that the same was initiated without there being 'reason to believe' that income of the appellant had escaped assessment. 3. That the CIT(A) erred in not appreciating that the reassessment proceedings intended to bring to tax alleged escaped income on 'protective basis' was beyond jurisdiction and bad in law. 4. That the CIT(A) erred in not appreciating that reassessment proceedings under section 147 of the Act having been initiated merely on the basis of certain unreliable/ uncorroborated third party information, without independent application of mind by the assessing officer, was illegal and bad in law. 5. That the CIT(A) erred on facts and in law in not appreciating that the impugned proceedings having been initiated without obtaining requisite sanction in terms of section 151 of the Act was beyond jurisdiction and bad in law. Without Prejudice 6. That the CIT(A) erred on facts and in law in not deleting the addition of Rs. 13,70,47,686 made by the assessing officer on protective basis; instead in directing the same to be made on substantive basis in the hands of the appellan....
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.... officer to levy interest under section 234B of the Act. ITA No.3731/Del/2016 1. That the Commissioner of Income Tax (Appeals) ['CIT(A)'] erred on facts and in law in not holding that the assessment order passed by the assessing officer under section 147/143(3) of the Income Tax Act, 1961 ('the Act') is beyond jurisdiction, illegal, bad in law and void-ab-initio. 2. That the CIT(A) erred on facts and in law in upholding validity of re-assessment proceedings without appreciating that the same was initiated without there being 'reason to believe' that income of the appellant had escaped assessment. 3. That the CIT(A) erred in not appreciating that the reassessment proceedings intended to bring to tax alleged escaped income on 'protective basis' was beyond jurisdiction and bad in law. 4. That the CIT(A) erred in not appreciating that reassessment proceedings under section 147 of the Act having been initiated merely on the basis of certain unreliable/ uncorroborated third party information, without independent application of mind by the assessing officer, was illegal and bad in law. 5. That the CIT(A) erred on facts and in law in no....