TaxTMI 
TaxTMI 
2021 (7) TMI 191
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....d in law. 3. Notwithstanding the above said fact, the addition of Rs. 58,58,134/- as confirmed by the Ld. CIT(A), has been made against the facts and circumstances of the case. 4. That the appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or disposed off." 3. Ground No. 1 & 4 being general in nature need no adjudication. 4. During the course of hearing before us, at the outset itself, the Ld. Counsel for the assessee stated that he would be making his arguments only vis a vis ground No. 2 raised, the remaining grounds, it was, stated by the Ld. Counsel for the assessee, were not being pressed before us. Ground No. 3 raised is accordingly dismissed as not pressed. 5. Taking up ground No. 2 raised, the Ld. Counsel for the assessee contended that vis-à-vis the impugned ground the assessee had sought to challenge the validity of the assessment framed in the present case u/s. 147 of the Act on the ground that the reasons recorded for reopening of the case were not sufficient for forming the belief of escapement of income. Referring to the facts of the case the Ld. Counsel for the assessee pointed out that in....
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....to the first para of the reasons he pointed out that the AO had referred to income having escaped on account of allowance of expenses claimed by the assessee against liasoning receipts, which had been disallowed in assessment proceedings for earlier assessment year i.e. A.Y. 2006-07. The Ld. Counsel for the assessee pointed out that the AO in the same reason and in the same paragraph has noted the fact that the said disallowance for assessment year 2006-07 had stood deleted by the CIT(A), but despite being in the know of the said fact he had proceeded to record that the income of the assessee had escaped assessment on account of impugned expenses having been allowed to the assessee. He pointed out that the AO had noted that since the Department had not accepted the order of the CIT(A), therefore, he had reason to believe that the income had escaped assessment. The Ld. Counsel for the assessee contended that clearly when the information on the basis of which the AO had formed the belief of escapement of income no longer survived, having been deleted by the CIT(A), there possibly could not have been any information leading to the formation of belief of escapement of income on this ac....
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....ason income would have been, like earlier years, prima-facie bogus/inflated. The language of the Ld. AO while recording Reasons and the CIT(A)'s order deleting the addition notwithstanding; it is my considered view that the Ld. AO had information on Record; record including current year and earlier year records; that income of the appellant had escaped assessment. At the time of reopening the AO cannot divine what would the exact accounting practice and the quantum of the evasion. The consistent methodology followed by the appellant, becomes, in my considered opinion, cogent information qua reopening of the case as the information that lead to the subjective satisfaction in the Ld. AO which was predicted on cogent information that lead to Reason to believe. Reliance is placed on the judgment of the Hon'ble Apex Court in the case of Raymond Woollen Mills Ltd. v. ITO And Others [19991] 236 ITR 34 (SC)/[1999] 152 CTR 418 (SC) where the Apex Court has held as under: In determining whether commencement of reassessment proceedings was valid it has only to be seen whether there was prima fade some material on the basis of which the department could reopen the case. The su....
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.... entirety and it cannot be left to the discretion of the AO to accept part of the information alone, ignoring the rest as per his whims and fancies. In the present case, the information available with the AO was that the claim of the assessee to liasoning expenses incurred in A.Y. 2005-06 was in accordance with law, as per the order of the first appellate authority. And this information surely cannot lead to the formation of belief of escapement of income on account of allowance of liasoning expenses in the impugned year. 11. As far as the belief of escapement of income on account of household expenses, we again note that there is palpably no information in the possession of the AO regarding the escapement of any such income pertaining to the impugned year, on this account. In fact, we find, that the AO notes in his reasons that the issue needs to be examined and his formation of belief, we find, rests on the fact that such addition had been made in assessment of the assessee for assessment year 2006-07. It is therefore only a mere suspicion that income on this account may have escaped assessment and reopening cannot be resorted to on mere suspicion. There has be "belief" of esc....
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....egal issue the ground needed to be admitted. He relied upon the decision of the Hon'ble Apex Court in the case of NTPC Limited Vs. CIT, 229 ITR 383 (SC). The Ld. DR did not object to the same. 15. Accordingly, considering that the assessee has raised a legal issue in the additional ground of appeal No. 1 before us and admittedly, all facts relevant for adjudicating the issue are borne out from the records, the additional ground so raised by the assessee is being admitted for adjudication. Since the Ld. Counsel made no submissions for admission of additional ground No. 2 the same was not admitted for adjudication. The order was pronounced in the open court during the course of hearing itself. 16. Thereafter proceeding with his argument the Ld. Counsel for the assessee contended that in the facts of the present case the assessee, Late Shri Raj Kumar Wadhwa, was alive when notice u/s. 148 of the Act for reopening of the case of the assessee was issued on 30-03-2013. That subsequently thereafter the assessee expired on 21.07.2013 and this fact was duly intimated to the AO by the wife of the deceased, who also clarified that she was the legal heir of the assessee. That desp....
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....d person without bringing on record the name of legal heir, page 22 of Paper Book. 28.02.2014 10. Demand notice u/s. 156 issued in the name of "dead person" as per page 21 of the Paper Book. 28.02.2014 17. Copies of documents relied upon by the Ld. Counsel for the assessee to substantiate his arguments were also placed before us in a paper book as under: 1) Copy of Notice dated 30.03.2013 as issued u/s. 148 by the by. Commissioner of Income Tax Circle, Patiala in the name of Sh, Raj Kumar Wadhwa. 2. Copy of Notice dated 03.01.2014 as issued u/s. 142(1) by the by. Commissioner of Income Tax Circle, Patiala in the name of Late Sh. Raj Kumar Wadhwa. 3. Copy of letter dated 08.01.2014 alongwith copy of death certificate to the ACIT intimating about the death of Sh, Raj Kumar Wadhwa on 21.07.2013. 4) Copy of letter dated 13.01.2014 furnishing Audit report, Balance Sheet, Trading and Profit and loss account alongwith relevant Annexures submitted by Smt. 5) Usha Wadhwa legal heirs of Sh, Raj Kumar Wadhwa for AY 2008-2009 as per return already filed original. 6) Copy of the deman....
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....147) of the income of the deceased and for the purpose of levying any sum in the hands of the legal representative in accordance with the provisions of sub-section (1),-- (a) any proceeding taken against the deceased before his death shall be deemed to have been taken against the legal representative and may be continued against the legal representative from the stage at which it stood on the date of the death of the deceased; (b) any proceeding which could have been taken against the deceased if he had survived, may be taken against the legal representative; and (c) all the provisions of this Act shall apply accordingly. (3) The legal representative of the deceased shall, for the purposes of this Act, be deemed to be an assessee. (4) Every legal representative shall be personally liable for any tax payable by him in his capacity as legal representative if, while his liability for tax remains undischarged, he creates a charge on or disposes of or parts with any assets of the estate of the deceased, which are in, or may come into, his possession, but such liability shall be limited to the value of the asset so charged, disposed of or part....