TaxTMI 
TaxTMI 
2022 (5) TMI 950
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..../s 147 were initiated by the AO on factually incorrect premise that the appellant has not filed any return whereas the return of income has already been filed by the appellant u/s 139(1), the Ld. CIT(A) has grossly erred in not quashing the assessment proceedings because the assumption of jurisdiction by the AO on factually wrong facts is bad in law and consequently renders the impugned assessment also bad. 4. That the Ld. CIT(A) has erred in not quashing the impugned proceedings because both the AO as well as the Ld. PCIT (who accorded the necessary approval for re-opening) have initiated the impugned proceedings without duly applying their respective minds in a mechanical manner, which not only renders the impugned re-opening bad but also the consequent assessment. 5. That having regard to the fact that the Ld. AO has failed to follow the procedure for framing the assessment u/s 144, the Ld. CIT(A) has grossly erred in not setting-aside the impugned assessment being framed in contravention of the provisions of section 144. 6. That having regard to the facts and circumstances of the case, the Ld. CIT(A) has erred in upholding the addition of Rs. 15,24,65....
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....nk and the other one is ICICI Bank. The Ld. Counsel for the assessee submits that the AO has simply gone by the AIR Information and no verification was made by the AO. The Ld. Counsel submits that even the bank statements were not available with the AO when the reasons were recorded and there is complete non-application of mind by the AO. 5. The Ld. Counsel further submits that the Pr. CIT has given approval without any application of mind and the approval is undated. The Ld. Counsel submits that the reasons have been recorded by the AO on the strength of factually incorrect premise that the assessee did not file any return for the year under consideration, whereas as a matter of fact assessee had already filed his return for the year under consideration u/s 139(1) on 30.07.2011 declaring income of Rs.1,53,663/-. The Ld. Counsel further submits that prior to issue of notice u/s 148 dated 31.03.2018 the assessee had been served with a notice dated 03.08.2012 seeking information about the filing of return of income for the year under consideration and the assessee vide his reply dated 03.09.2012 informed the Income Tax Officer, Ward 30(2), New Delhi that he has already filed retur....
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....ment (ITS) of the assessee dated 10.03.2018, wherein AIR Information is reported it has been categorically mentioned that assessee has made cash deposits into two banks but the AO in his reasons has mentioned that cash deposit has been made only in ICICI Bank. In the ITS it has been shown that the assessee had filed return of income for the year under consideration on 30.07.2011 with acknowledgement no. 609 declaring taxable income of Rs.1,53,660/- but the AO in his reasons has stated that the assessee did not file any return of income. 8. The Ld. Counsel further submits that on perusal of the recorded reasons it is noticed that the reasons recorded is undated as the date of recording of reasons by the AO is not mentioned. Therefore, in the absence of date on the reasons recorded it cannot be made out that the reasons were recorded prior to issue of notice u/s 148 or thereafter. 9. It is submitted that on perusal of the reasons recorded the AO has reopened the assessment simply based on AIR Information without any verification of facts and without applying his own mind to the information, if any, collected before recording the reasons. It is also submitted that Ld. PCIT also ....
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....:- (a) where no return of income has been furnished by the assessee although his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income tax". 5. It is pertinent to mention that in the case of CIT Vs. Nova Promoters & Finalise Private Limited [ITA No. 342 of 2011] dated 15.02.2012, the Hon'ble Delhi High Court which is the jurisdiction High Court has held that as long as there is a 'live link' between the document/information which was placed before the Assessing Officer at the time when reasons for reopening were recorded, proceedings u/s 147 would be valid. The Court also held- "We are aware of the legal position that at the stage of issuing the notice u/s 148 the merits of the matter are not relevant and the Assessing Officer at that stage is required to form only a prima facie opinion that income chargeable to tax has escaped assessment". 6. Further more, in the case of Jyoti Goyal vs. ITO (ITA No. 1259/Del/2010), the Hon'ble ITAT Delhi held that: "As regards, the other contentions of the assessee that the re....
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....07.2011 declaring income of Rs.1,53,660/- vide acknowledgement no. 3001000609. This fact was also recorded in the ITS dated 10.03.2018 which is very much available with the AO when the reasons were recorded and notice was issued u/s 148 dated 31.03.2018. Therefore, it is abundantly clear that based on wrong assumption of facts the AO believed that the income of the assessee had escaped assessment. Firstly as per AIR information AO was of the view that there is a deposit of Rs.28,83,000/- in ICICI bank which is factually wrong since there were deposits in two bank accounts one is ICICI and the other is HDFC Bank. Secondly, the assessee even though filed return of income the AO records that no return was filed by the assessee and, therefore, income had escaped assessment. It is also observed that the reasons recorded are undated and, therefore, it is doubtful as to whether these reasons recorded were before issue of the notice u/s 148 or thereafter. The AO in the reasons also records that he has demonstrated the live link between the materials available on ITD System and the reasons for belief that income had escaped assessment. However, the facts as recorded above suggest that there....
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....estricted to cash deposit in bank account but there was no material much less tangible, cogent, credible and relevant material to form a reason to believe that cash deposits represented income of the assessee. The reasons recorded in the present case at best can be treated to be reasons to suspect which is not sufficient for reopening the assessment u/s 148 of the Act. The requirement of application of mind is missing in the present case on the face of it in the reasons recorded. 15. In the case of PCIT vs. Meenakshi Overseas Pvt. Ltd. (supra) it has been held that if there was no independent applicable of mind by AO to tangible material and reasons, failed to demonstrate link between tangible material and formation of reason to believe that income had escaped assessment and, therefore, reassessment was not justified. 16. The Delhi High Court in the case of Northern Exim Pvt. Ltd. vs. DCIT (supra) held that if reasons recorded for issue of notice u/s 148 are factually incorrect that cannot therefore, form the basis for the belief that income had escaped assessment. Similar view has been taken by the Hon'ble Gujarat High Court in the case of Sagar Enterprises vs. ACIT (supra).....