AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2023 (9) TMI 251
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....nt order passed by AO was bad in law only because the AO did not conduct any further enquiry of his own and relied on the conclusive findings of the officer(s) of the investigation Wing of the Income Tax Department to record the reasons for reopening the assessment? * Whether on facts and in the circumstances of the case the Ld.CIT(A) was justified in deciding that the assessment order passed by AO was bad in law because the objections raised by the assessee against initiation of proceedings u/s 147 were not disposed of by the AO by any speaking order in writing as required under the law without proper consideration of the AO's view expressed in his letter dated 24.04.2019 and without giving any further opportunity to the AO of being heard before disposal of the appeal as prayed for in the said letter? * Whether on facts and in the circumstances of the case the Ld.CIT(A) was justified in deciding that the assessment order passed by AO was bad in law because the objections raised by the assessee against initiation of proceedings u/s 147 were not disposed of by the AO by any speaking order in writing as required under the law, without taking into consideration the decision of....
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....ction as genuine? * Whether on facts and in the circumstances of the case the Ld. CIT(A) was justified in deleting the addition made by AO on the ground that the addition of opening balance in the creditor's account made by the AO is not permissible under section 68, since an amount appearing as opening balance is also a credit and the explanation offered by the assessee regarding the nature and source of which was not satisfactory in the opinion of the AO?" 3. From the perusal of above listed grounds, department is in appeal primarily on two issues, one relating to the jurisdictional and legal aspect of the reassessment and the second one on the merit of the relief granted by the Ld. CIT(A). 4. On the jurisdiction and legal issues, several grounds have been raised which formed the basis of giving relief by the Ld. CIT(A). They are all in the nature of peripheral arguments on the moot point of jurisdictional and legal aspect of the impugned reassessment. We thus, first deal with the jurisdictional and legal aspect of the appeal. 5. Brief facts of the case are that assessee is an individual engaged in the business of hardware, sanitary, building material, contract etc. He i....
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..... In this respect submissions made by the assessee that there is an opening balance of Rs. 1,75,00,000/- and that the statements made by the two persons had been retracted was negated by the Ld. AO while completing the assessment. Aggrieved, assessee went in appeal before the Ld. CIT(A). Ld. CIT(A) has elaborately dealt with jurisdictional and legal issue of reopening of the assessment and quashed the same by holding it to be invalid as there was non-application of mind on the part of the Ld. AO. Aggrieved, revenue is in appeal before the Tribunal. 6. Before us, Ld. Sr. DR put-forth the multi-fold contentions which have been raised in the grounds on the jurisdictional and legal aspect of the relief granted by the Ld. CIT(A). Per contra, Ld. Counsel for the assessee placed on record detailed written submission along with corroborative evidences in the form of a paper book containing 68 pages. Ld. Counsel for the assessee has dealt with each of the aspect of jurisdictional and legal issue of reopening of the assessment. The submissions made by the Ld. Counsel are multi-fold, each of them are dealt hereunder: 6.1. Primarily, reasons to believe recorded by the Ld. AO are based on rep....
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.... is fatal to the impugned proceeding. Reliance was placed on the decision of Hon'ble Supreme Court in the case of Calcutta Discount Co. ltd. [1961] 41 ITR 191 (SC) who had analysed the phrase "reasons to believe" and observed that - "It is for him to decide that inferences of facts can be reasonably drawn and what legal inferences have ultimately to be drawn. It is not for somebody else to tell the assessing authority what inferences, whether of facts or law, should be drawn." 6.2. Ld. Counsel has raised the contention that Ld. AO has not disposed of the objection filed during the course of reassessment proceedings by passing a speaking order as mandated by Hon'ble Supreme Court in the case of G K N Driveshaft (India) Ltd. Vs. ITO [2013] 259 ITR 19 (SC). According to the Ld. Counsel, non-disposal of the objection of assessee by the Ld. AO by way of a speaking order renders the assessment order bad in law. Assessee had filed the objections on 10.12.2018 placed in the paper book. Ld. CIT(A) had called for clarification from the Ld. AO in respect of disposal of objections to the reopening, raised by the assessee. To this effect, Ld. AO had replied vide letter dated 24.04.2019, scan....
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....st substantial question of law will, accordingly, have to be answered in favour of the Appellant and against the Respondent-Revenue." 6.3. In view of the above, non-disposal of the objections of the assessee by the Ld. AO without passing a written/speaking order renders the assessment order and the consequential additions as bad in law. 7. Another contention raised by the Ld. Counsel is that Ld. AO has not provided the copy of statements of all the three persons which formed the basis of arriving at the reasons to believe. Further, no opportunity has been given to the assessee to cross examine these three persons though specific request had been made in the course of assessment proceeding. Ld. Counsel contended that on one hand Ld. AO had taken recourse to the reassessment solely on the basis of the purported statement and on the other hand, Ld. AO did not deem it proper or reasonable to confront such purported statement to the assessee. 7.1. To buttress the contention, Ld. Counsel placed reliance on the decision of Hon'ble Supreme Court in the case of Andaman Timber Industries Ltd. Vs. Commissioner of Central Excise [2015] 281 CTR 241 (SC) wherein it is held as under: "5. We ....
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....casion when the matter came before this Court in Civil Appeal No. 2216 of 2000, order dated 17.03.2005 was passed remitting the case back to the Tribunal with the directions to decide the appeal on merits giving its reasons for accepting or rejecting the submissions. 8. In view the above, we are of the opinion that if the testimony of these two witnesses is discredited, there was no material with the Department on the basis of which it could justify its action, as the statement of the aforesaid two witnesses was the only basis of issuing the Shaw-Cause Notice. 9. We, thus, set aside the impugned order as passed by the Tribunal and allow this appeal. No costs." 7.2. Further, Ld. Counsel placed reliance on the decision of Hon'ble Delhi High court in the case of CIT Vs. Ashwani Gupta 322 ITR 396 (Del.) wherein it was held as under: "The Tribunal confirmed the Order passed by the Commissioner (Appeals) which held the entire addition made by the Assessing Officer to be invalid and had deleted it on the ground that the Assessing Officer had passed the assessment Order in violation of the principles of natural justice inasmuch as he had neither provided copies of the seized materia....
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....very perfunctory nature of the survey. In the present case, ld AO has not accepted the retraction made by the persons on whose statement the reasons to believe were , to initiate the reassessment proceeding. He has neither made any enquiry from the persons retracted their statements to support the additions made by him. 8. By taking into account the above multi-fold contentions discussed in respect of jurisdictional and legal issue, the conspectus of our findings find favour with the assessee, upholding the observations and findings given by the Ld. CIT(A). From the perusal of the impugned order and the reasons to believe, it is seen that Ld. AO has not applied his mind to the purported information received from the Investigation Wing. The approach adopted is a mechanical approach and falls in the category of borrowed satisfaction. It is important to note that survey was conducted in the case of GTPL wherein assessee is not a director. Statements of directors of TSPL i.e. Shri Ramlal Gulgulia and Shri Bijoy Singh Lodha were recorded in the course of survey of GTPL on 06.01.2017 which were relied upon by the Ld. AO. These had also been retracted. Another important fact which is bor....