TaxTMI 
TaxTMI 
2023 (1) TMI 924
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....equate and reasonable opportunity of being heard in the gross breach of law. Hence the addition so made by the ld. AO may kindly be quashed and delete. 3. Rs. 7,65,000/- : The ld. CIT (A) has grossly erred in law as well as on the facts of the case in confirming the addition of Rs. 7,65,000/- on account of Long ash deposits in the bank account as alleged undisclosed income. Hence the addition so made by the AO and confirmed by the ld. CIT (A) is being totally contrary to the provisions of law and facts on the record and hence the addition may kindly be deleted in full. 4. The ld. AO has grossly erred in law as well as on the facts of the case in charging interest u/s 234A, B, C. The appellant totally denies it liability of charging of any such interest. The interest, so charged, being contrary to the provisions of law and facts, may kindly be deleted in full. 5. The appellant prays your honors indulgence to add, amend or alter all or any of the grounds of the appeal on or before the date of hearing. 2. The brief facts of the case are that the assessee is having income from trading of commodity and other sources. He has not filed his return of income or....
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....8 is incorrect. Section 147 clearly authorizes the AO to make addition on account of any income escaping assessment notwithstanding that the reasons for such issue have not been included in the reasons recorded under sub-section (2) of section 148. In this case it is seen that the AO had opened the case on the ground that as per information the assessee has entered into commodity transactions and not filed the return of income for the assessment year 2011-12. During assessment the assessee submitted that he was doing commodity trading through the Reliance Money office and had suffered loss. The reasons recorded by the AO were therefore correct. But despite so called loss the appellant has made cash deposits in the bank account amounting to Rs. 7,65,000/-. The appellant has failed to give an explanation for the same during assessment and appellate proceedings. The AO has rightly held these to be his unaccounted income. In view of the clear provisions of section 147 read with Explanation 3 the addition made by the AO is upheld. This ground of appeal is dismissed." Now the assessee has preferred the present appeal before this Tribunal. 3. Ground Nos. 1 & 2 raised by the assessee....
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....ssment for any assessment year, did not escape assessment, then, the mere fact, that the AO entertained a reason to believe, albeit even a genuine reason to believe, would not continue to vest him with the jurisdiction, to subject to tax, any other income, chargeable to tax, which the AO may find to have escaped assessment, and which may come to his notice subsequently, in the course of proceedings under s. 147. It is a different story that for such other income, the AO may have recourse to such other remedies, as may be available to him under law, but then, once it is found, that the income, regarding which he had "reason to believe" to have escaped assessment, is not found to have escaped assessment, the AO is required to withhold his hands, at that only. Once the AO came to the conclusion, that the income, with respect to which he had entertained "reason to believe" to have escaped assessment, was found to have been explained, his jurisdiction came to a stop at that, and he did not continue to possess jurisdiction, to put to tax, any other income, which subsequently came to his notice, in the course of reassessment proceedings, which were found by him, to have escaped assessment....
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....espect of any issue which comes to his notice subsequently in the course of proceedings under s. 147 though the reasons for such issue were not included in the reasons recorded in the notice under s. 148(2) on the basis of which he had initiated proceedings under s. 147.-Vipan Khanna vs. CIT (2002) 175 CTR (P&H) 335 : (2002) 255 ITR 220 (P&H) and Travancore Cements Ltd. vs. Asstt. CIT (2008) 219 CTR (Ker) 359 : (2008) 305 ITR 170 (Ker) held no longer good law. The heading of s. 147 is "Income escaping assessment" and that of s. 148 "Issue of notice where income escaped assessment". Sec. 148 is supplementary and complimentary to s. 147. Sub-s. (2) of s. 148 mandates reasons for issuance of notice by the AO and sub-s. (1) thereof mandates service of notice to the assessee before the AO proceeds to assess, reassess or recomputed escaped income. Sec. 147 mandates recording of reasons to believe by the AO that the income chargeable to tax has escaped assessment. All these conditions are required to be fulfilled to assess or reassess the escaped income chargeable to tax. As per Expln. 3 if during the course of these proceedings the AO comes to conclusion that some items have esc....
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....558/Jp/2013 dt 02.07.2018 58 TW 355(Jp), has also held the same view copy of order is enclosed (g) Also refer latest decision of this Honble ITAT in the case of Pappu Qureshi v/s ITO in ITA No. 314//Jp/2019 dt. 28.04.2020 Sec. 292B is no applicable: S. 292B could not be invoked to correct a foundational/substantial error as it was meant so as to meet jurisdictional requirement-Therefore, both impugned notice and impugned order were quashed and set aside-It was made clear that this order would not prohibit Revenue from issuing a fresh notice for reassessment, if requirement of Ss 147/148 were satisfied, including limitation period therein Kindly refer Sumit Balkrishan Gupta v/s ACIT 104 CCH379(Bom.HC)(2019). Thus, cannot be said that it is an irregularity curable u/s. 292B- (h) In the case of Saraf Gramodyog Sansthan vs. ITO 108 ITD 115(Agra)it has been held that Further, AO had referred to wrong bank account number in the reasons recorded by him-Sec. 292B cannot take care of any mistake in recording the reasons because that section refers to "return of income, assessment, notice, summons or other proceedings"-It does not refer to the reasons reco....
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....l relief such as with regard to claim for carry forward of depreciation etc-Tribunal after taking note of factual position, more particularly, that addition which was made in reassessment proceedings having been deleted by CIT(A) reassessment on heads which were not part of reasons recorded for reopening assessment is not sustainable-Held, in case of GKN Driveshafts (India) Ltd. Versus Income-Tax Officer and Ors., (2003) 259 ITR 19 (SC) it was held that assessing officer is bound to furnish reasons within a reasonable time and noticee is entitled to file their objection to such notice and assessing officer is bound to dispose of same by passing a speaking order-Though Explanation 3 inserted by amendment empowers assessing officer to assess income in respect of any issue which has escaped assessment when such issue comes to his notice subsequently in course of proceedings under Section 147 notwithstanding that reasons for such issue have not been included in reasons recorded under Sub-Section 2 of Section 148, prerequisite is there should be a valid notice-Admittedly, in case on hand, notice was held to be not sustainable-If that be so, assessing officer cannot be stated to be empow....
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....ad in law-Assessee's grounds allowed. 2. Approval of 36 assessees in one letter illegal: Further the ld. Pr. CIT has given one consolidated approval of 36 assessee's through one letter dt. 27/28.03.2018 (PB2-3) and this show how the Pr. CIT has acted in formal way. On perusal of the assessment order and documents it may be possible that there may be no approval in original letter or documents. The document of approval may be in the photocopy. And it is also appear that the approval has been given or reach in the office of the ld. AO after the 31.03.2018, the same was much after the reasons recorded. How the approval can be given of all the 36 different assessee's in one documents, all are the independent or separate assessee and reason are different. Thus it all shows how the wrong and illegal manner have been adopted by all the authorities. On this preposition and issue kindly refer the decision of this Honble ITAT in the case of Sh. Satya Naraya Bairwa v/s ITO in ITA No...867 & 869/Jp/2018 dt. 15.09.2021 Copy is enclosed, wherein under the same facts and circumstances the Honble ITAT has held that "20. The ld. A/R has also drawn our attention on the approval of the Pr....
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....ntention of the ld AR, therefore, we quash the proceedings U/s 147 of the Act." Here is the same position. 3. Regarding the observation of the ld. CIT(A) on online approval given on 19.09.2017, it is submitted that at that time there was no provision for on line approval . Further if online approval has been given on 17.09.2017, than why the letter dt. 25.03.2018 was sent again for approval u/s 151 and why the ld. Pr. CIT office has given the approval on 27/28/.03.2018 again. The ld. CIT(A) or AO nowhere has state that the letter dt. 27/28.03.2018 was bogus or incorrect. Further our arguments are the same as has given in the order of Sh. Staya Narayn Bairwa;s order so kindly consider the same here also. Therefore all the proceedings are illegal, invalid, void-ab-initio and liable to be quashed. 4. No income escaped: further it is submitted that the notice u/s 148 can be issued only when there is any escapement of income because S.147 provides that If the Assessing Officer has reason to believe that an income chargeable to tax has escaped assessment for any assessment year, here the assessee has not escaped any income because the assessee has not earned income of Rs.10,0....
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....ification and to clear his doubts and suspicions to re-examine the material which were already available on record at the time of passing of t earlier assessment orders. The legislature under Section 147 has not clothed AO with such jurisdiction therefore the action could not be upheld in the background of facts of instant case. One more redeeming fact which had direct nexus with the subsequent re-assessment proceedings and ramification of the same had culminated into re-assessment orders was the impugned order where AO rejected the objections submitted by Assessees pursuant to notice under Section 147/148. Order passed by AO in this behalf was not a speaking order which could not be sustained. In view of legal infirmity in the notice under Section 147/148 and laconic order of AO while rejecting objections Assessee the consequential assessment Orders were liable to be annulled.(para16) Hence in view of the above submissions the action taken u/s 148 and consequent proceedings may kindly be quashed." 5. On the other hand, the ld. D/R supported the orders passed by the Revenue Authorities and also relied upon the report submitted by the AO which is already placed on record. 6....
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....06 ITR 0343 (Raj.), the Hon'ble High Court of Rajasthan held that it is only when, in proceedings under sec. 147 the AO assesses or reassesses any income chargeable to tax, which has escaped assessment for any assessment year, with respect to which he had "reason to believe" to be so, then only, in addition, he can also put to tax, the other income, chargeable to tax, which has escaped assessment, and which has come to his notice subsequently, in the course of proceedings under sec. 147. To put it in other words, if in the course of proceedings under sec. 147, the AO were to come to conclusion, that any income chargeable to tax, which, according to his "reason to believe", had escaped assessment for any assessment year, did not escape assessment, then, the mere fact, that the AO entertained a reason to believe, albeit even a genuine reason to believe, would not continue to vest him with the jurisdiction, to subject to tax, any other income, chargeable to tax, which the AO may find to have escaped assessment, and which may come to his notice subsequently, in the course of proceedings under s. 147. It is a different story that for such other income, the AO may have recourse to such o....
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....f income which may be assessed or reassessed as well as any other income chargeable to tax which has escaped assessment and which comes to the notice of the AO subsequently in the course of proceedings under this section. Explanation 3 makes it clear that the AO may assess or reassess the income in respect of issue which has escaped assessment, if such issue comes to his notice in the course of proceedings under this section even though said issue did not find mention in the reasons recorded and the notice issued under s. 148. Since there was confusion prevailing with regard to the powers of the AO to assess or reassess on the issues for which no reasons were recorded, Expln. 3 came to be inserted as clarificatory. Now, after the insertion of Expln. 3, the position is that the AO may assess or reassess income in respect of any issue which comes to his notice subsequently in the course of proceedings under s. 147 though the reasons for such issue were not included in the reasons recorded in the notice under s. 148(2) on the basis of which he had initiated proceedings under s. 147.-Vipan Khanna vs. CIT (2002) 175 CTR (P&H) 335 : (2002) 255 ITR 220 (P&H) and Travancore Cements Ltd. vs....
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.... above discussions, the Tribunal was right in holding that the AO had the jurisdiction to reassess issues other than the issues in respect of which proceedings are initiated but he was not so justified when the reasons for the initiation of those proceedings ceased to survive." In the case of CIT vs. Dr. Devendra Gupta 336 ITR 0059(Raj): held Reassessment-Scope-Addition in respect of items other than the one on which notice in given-Income alleged to have escaped assessment in reasons recorded not having been actually found to . Also refer AVG Construction Pvt. Ltd v/s ITO Ward 6(2) Jaipur in ITA no. 90/Jp/2020 dt. 02.09.2021 under the same facts and circumstances copy is enclosed. Recently the Honble ITAT Jaipur Bench in the case of Shri Shambhu Dayal Saraf v/s IT in ITA No. 558/Jp/2013 dt 02.07.2018 58 TW 355(Jp), has also held the same view copy of order is enclosed. Therefore, lastly considering the totality of facts and circumstances of the case, submissions of both the parties as well as judicial pronouncements referred in this regard, I am of the view that on the making of an assessment or reassessment on grounds other than those on the basis of which a notice wa....