TaxTMI 
TaxTMI 
TaxTMI 
2022 (2) TMI 388
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....the Act." 2. Brief facts of the case are that Assessing Officer (AO) on the basis of AIR information noted that assessee made deposit of Rs. 11,97,006/- in his bank account in Punjab National Bank. The AO issued notice to the assessee was issued a notice dated 24.01.20147 to explain the source. The AO recorded that in response to the notice dated 24.01.2017, no reply was furnished by the assessee. The AO, recorded the following reasons of reopening:- "... .... In this case as per the AIR information available on the record, it is seen that the during the year under consideration assessee has deposited cash amount to Rs. 11,97,006/- in bank account maintained with the Punjab National Bank, Vapi. On verification of the details in ITD, it was seen that the assessee has not filed return of income for the A.Y 2010-11. In this regard a query letter issued to the assessee on 24.01.2017. As the assessee hasn't complied with the verification letters issued by this office, the source of cash deposit still remains unexplained. From the above it is clear that the assessee has failed to disclose fully and truly all the material, facts for his assessment within the meaning of section 147 of t....
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....e filed objection on 24.10.2017, against such reopening as per decision of Hon'ble Jurisdictional High Court in the case of Sahakari Khand Udyog Mandal Ltd. vs. ACIT (2014) (DT) 2465 (Guj). The AO before the expiry of limitation finalized the assessment order on 29.09.2017 and added total credit shown in the credit side in bank account with Punjab National Bank (PNB) instead of taxing profit on the basis of earlier year's profit. The assessee filed objection on 24.10.2017 but the AO has not passed any speaking order on the objection filed by the assessee and not followed the direction of Hon'ble Jurisdictional High Court in the case of Sahakari Khand Udyog Mandal Ltd. (supra) and Hon'ble Supreme Court in the case of GKN Drivesafts (I) Ltd. vs. ITO And Ors. (2003) 259 ITR 19 (SC). Further no notice under section 143(2) was issued within period of limitation. The AO exceeded his jurisdiction while recording reason under section 147. The case of assessee was re-opened on the ground that no return of income was filed; in fact, the assessee filed return of income on 27.03.2011. Thus, the reason recorded were invalid as has been held by Hon'ble Jurisdictional High Court i....
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....liance was made by the assessee. Further, notice under section 148 was served upon the assessee on 31.03.2017 and the same was not complied nor by responded by assessee thereupon. The assessee in response to notice dated 28.07.2017 attended the proceedings only on 18.08.2017. On the request of assessee, copy of notice and reasons recorded was supplied. The Assessing Officer on considering the submission of assessee and replied filed by the Assessing Officer concluding that there was no compliance by assessee to the notice under section 148 of the Act within prescribed period of 30 days' time. The Assessing Officer was bound to proceed with assessment under section 144 of the Act. Thus, the objection on the validity of reopening and not following the guidelines of Decision in Sahakari Khand Mandali Ltd Vs ACIT (supra) is devoid of merit and accordingly dismissed the same. 6. On the addition of Rs. 18,98,771/-, the Ld. CIT(A) held that total turnover of assessee is Rs. 38,14,650/- while as per the bank accounts there was credits of Rs. 46,11,400/- thus, there was difference of Rs. 7,96,750/- on which show cause notice was issued by AO to treat it as undisclosed income. No reply was ....
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....sentative (ld.AR) for the Assessee and ld. Sr. Departmental Representative (ld. Sr. DR) for the Revenue and perused the orders of lower authorities carefully. Ground No.1 relates of validity of re-opening under section 147 and notice under section 148 of the Act. The ld. AR of the assessee submits that reasons recorded by AO were not valid. The AO while recording the reasons recorded that no return of income is filed by assessee for AY 2010-11. In fact, the assessee filed return of income on 17.03.2011 under section 139(1) of the Act. The copy of acknowledgment of return of income is filed as per page 13 of the paper book, thus the reasons recorded are not correct and valid. The ld. AR of the assessee submits that once reasons recorded are not valid all subsequent actions of AO are void ab initio. 8. To support his submission, the Ld. AR of the assessee relied upon the decision of Jurisdictional High Court in Mumtaz Hazi Mohmad Memon Vs ITO [SCA No. 21030 of 2017 dated 21,03.2018] and decisions this Bench of Tribunal in the case of Ashish Natvarlal Vashi vs. ITO in ITA No.3522/AHD/2016 dated 19.04.2021 and in the case of Shri Hashmukhbhai B Patel in ITA No.193/SRT/2019 dated 24.07....
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....hereafter, the Assessing Officer after recording reasons of reopening served notice under section 148, which was duly served upon the assessee. The notice under section 148 was again not responded by the assessee. Since the assessee filed his original return of income to ITO, Ward-3 Vapi, however notice under section 148 was issued by ITO Ward-7, Vapi. The assessee had sufficient opportunity to inform the ITO Ward-7 Vapi that he has already field return of income before ITO Ward-3 Vapi. Thus, the assessee himself is guilty of non-compliance of various notices. The assessee has not complied with notice "within statutory period of 30 days". Thus the assessee is not entitled to claim that reasons recorded are not correct or re-opening was not made validly or notice under section 148 of the Act is wrong. The assessee could raise objection only on filing return of income in response to the notice under section 148. And without filing return of income within the time provided in the notice, the assessee has no right to object the jurisdiction of the AO. 13. On the addition on account of estimation @ 51.84% of undisclosed sale. Ld. Sr. DR of the Revenue submits that Ld. CIT(A) estimated ....
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....e assessee during the re-assessment proceedings and demanded reasons recorded. The reasons recorded was provided by AO vide letter dated 21.09.2017 which was received by assessee on 23.09.2017 and subsequently assessment order passed on 29.09.2017 by taking view that despite repeated notice and show cause assessee was not made proper compliance. We find that on similar ground of reasons of reopening wherein the Assessing Officer recorded that assessee has not filed return and in fact, return was filed by the assessee, the re-assessment were held as invalid by co-ordinate Bench of this Tribunal, in the case of Rinakumar A. Shah ( ITA No. 172/AHD/2017 dated 30.04.2019). The findings of the Coordinate Bench in that case are reproduced below: "10. We have heard the rival submissions and perused the relevant material on record. The learned counsel for the assessee has alleged that the AO in his reason record for reopening of assessment stated that the assessee has not filed any return of income for the assessment year under consideration whereas the assessee has duly filed return of income for the assessment year under consideration. Therefore, the AO has assumed wrong facts, hence, r....
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....Gujarat High Court in the case of Mumta- Haji Mohmad Memon v. ITO Ward- 6(1) (1) Ahmedabad [SCA No. 21030 of 2017-dated 21.03.2018] (supra) the notice for reopening of assessment is liable to be quashed. The How'ble High Court observed as under:- "However, on verification from ITD system, it is seen that the assessee has not filed return of income for A.Y. 2010-11. Since, the assessee has not filed return of income, capital gain earned on the sale of immovable property has not been offered for taxation by the assessee. Therefore, the property sale transactions made by her during the financial year 2009-10 are unexplained / undisclosed. In view of the above facts, the AO had reason to believe that income chargeable to tax has escaped assessment within the meaning of section 147 of the IT for A.Y. 2010-11 by an amount of Rs. 39,65,000/-and it is a fit case for reopening the assessment for A.Y. 2010-11." The Honourable Court observed that "11. In this context, we have noted that the reasons proceeded on two fundamental grounds. One, that the property in question was sold for a sum of Rs. 1,18,95,000/- and two; the assessee has not filed the return that therefore his one 3rd shar....
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....ctfully following the ratio of judgement of Hon'ble Jurisdictional High Court in the case of Sunrise Education Trust v. Income Tax Officer [2018] 92 Taxman 74 (Gujarat) (supra) wherein it was held that when the AO in the reasons recorded proceeded on the erroneous footing that the assessee has not filed return of income at all and when it is not in dispute that the assessee did file the return of income for the assessment year under consideration, which was duly acknowledged by the department, then, it has to be held that the entire reasoning thus proceeded on the wrong premises that the assessee had never filed the return. This, itself would be sufficient to annual the notice of reopening the assessment. In view of the above and in the light of ratio laid down by the Hon'ble' High Courts of Gujarat as quoted above and respectfully following the same, we hold that entire reasoning recorded by the AO for initiation of reassessment proceeding and issuance of notice under section 148 of the Act was on the wrong and incorrect facts that the assessee has never filed the return of income, and in fact, it was filed. This view is further supported by decision of Co-ordinate Bench o....