TaxTMI 
TaxTMI 
2023 (9) TMI 1499
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....red to the A.O. ward 1(1) as per notification no. 1 of 2014 dt. 15/11/2014. Relied in DCIT vs Sunita F Lease Ltd. (2011) 11 taxmann.com 241 (Chhattisgarh). 4. That the Ld. CIT(Appeal) erred in confirming the addition of Rs. 2934000/- as deemed income u/s 56(2)(vii)(b)(ii) ignoring the fact land is agricultural land. 5. That the Ld. CIT(Appeal) erred in confirming the addition of Rs. 2934000/- ignoring the fact that the Land is held as stock in trade and the provisions of 56(2) are not applicable to stock in trade. 6. The appellant reserves the right to add, alter and omit all or any of the grounds of appeal with the permission of the Hon'ble appellate authority." 2. Based on information that the assessee had purchased an immovable property out of his undisclosed sources, the A.O. issued notice u/s. 148 of the Act dated 22.03.2019. In compliance, the assessee filed his return of income on 16.04.2019, declaring an income of Rs. 4,48,840/-. 3. After filing the return of income, the assessee, vide his letter dated 16.04.2019, requested the A.O to make available a certified copy of the reasons based on which proceedings were initiated u/s. 147 of the Act, along with a copy o....
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....d 16.04.2019, inter alia, requested the A.O to make available a copy of the "reasons to believe" based on which his case was reopened u/s. 147 of the Act. To fortify his claim above, the Ld. AR had taken us through the letter dated 16.04.2019 (supra), based on which the assessee had requested a copy of "reasons to believe", which reads as under: 9. As is discernible from the record, it transpires that the CIT(Appeals) had considered the assessee's objection that now when the A.O despite a specific request, had failed to make available a copy of "reasons to believe", therefore, the assessment framed by him could not be sustained and was liable to be struck down on the said count itself. Although the CIT(Appeals) concurred with the assessee that an A.O as per the mandate of law, remains under a statutory obligation to make available a copy of "reasons to believe" and also dispose off the objections which the assessee would thereafter raise before him, but observed that there was neither any mention in the assessment order about any such request having been made by the assessee for making available a copy of reasons recorded; nor was it discernible that he had raised any objection as....
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....y. Moreover, when the AO issued notices under section 143(2), the appellant could have objected to proceeding further in the assessment proceedings for non-receipt of copy of reasons. The appellant had been seen to have complied with the notice issued under section 143(2). Furthermore, there is seen to be compliance from the appellant in response to a show cause notice issued by the AO. All these compliances from the point of view " clearly indicate that he had said to go on with the AO to complete the reassessment proceedings". In fact, the AO had recorded these following findings in the assessment order: The AO had stated that :".notice U/s. 143(2) of the Income Tax Act 1961 was issued on 29/07/2019 vide notice no. ITBA/AST/S/143(2) 3/201920/1017073949 (1) and notice U/s 142(1) of the Income Tax Act 1961 was issued on 06/08/2019 vide notice no. ITBA/AST/F/142(1)/201920/1017245067(1) requiring the assessee to make the requisite compliance on or before 16/08/2019. In compliance to this notice assessee has submitted partial reply along with supporting documents which is placed on record. Thereafter, a show-cause notice was issued on 01/11/2019 vide letter no. ITBA/AST/F/147(SCN)/201....
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....: "INCOME TAX : Where assessee filed no return for year under consideration while AO found that assessee had purchased immovable property and she had earned interest from mutual funds as also receipt of premia from Insurance company, reassessment was justified". The Hon'ble High Court of Madras has held that :: "Section 4, read with section 147, of the Income-tax Act, 1961 - Income - Chargeable as (Others) - Assessment year 2011-12 - Assessee had not filed return on ground that total income earned by her in relevant assessment year was below maximum amount which was not chargeable to tax - Assessing Officer sought to reopen assessment on grounds that purchase of immovable property, interest received from mutual fund and premium received from life insurance was chargeable to tax which escaped assessment - Whether since a case was established that competent authority had reasons to believe that tax had escaped assessment, reassessment was justified - Held, yes ". If any prima facie case is established and the competent authority has reason to belief regarding Tax escaped assessment, then the authority must be permitted to proceed with the assessment or reassessment. (C). Ye....
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.... was competent to initiate proceeding under section 148. Therefore, it is unbecoming on the part of the assessee to turn around to contend to the contrary. It's with this background of the case, the primary ground of appeal raised against issuance of notice under section 147 merits no consideration and accordingly stands rejected." 10. I have thoughtfully considered the observations of the CIT(Appeals) and cannot persuade myself to subscribe to the same. I say so because not only are the observations of the CIT(Appeals) found to be factually incorrect, but they are also not in conformity with the settled position of law. So far, his observation that the assessee had not filed any concrete proof/evidence to prove his claim that he had requested the A.O. to supply a copy of reasons to believe a/w. approval of the appropriate authority for issuing notice u/s. 148 of the Act, I find that the same is far from the truth. As had been brought to my notice by Shri R.B Doshi, Ld. AR, the assessee, vide his letter filed with the A.O dated 16.04.2019, had inter alia requested him to supply a certified copy of the "reasons to believe" and approval of the competent authority based on which ....
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....; therefore, the very assumption of jurisdiction by him and framing of the impugned assessment cannot be sustained and is liable to be struck down on the said count itself. My view above is supported by the judgment of the Hon'ble High Court of Bombay in the case of Agarwal Metals and Alloys Vs. ACIT & Ors. (2012) 346 ITR 64 (Bom.). In its order mentioned above, the Hon'ble High Court had, after taking cognizance of the fact that the A.O in the case before them had failed to communicate the "reasons to believe" based on which the case of the assessee was reopened, quashed the assessment by treating the same as having been passed in a brazen violation of the governing principles of law. The relevant observations of the Hon'ble High Court are culled out as follows: "4. On these admitted facts, it is evident that there has been a complete violation of the applicable principles of law by the Assessing Officer. The Assessing Officer was required to communicate the reasons for reopening the assessment which he has failed to do. The Assessing Officer despite the judgment of the Supreme Court in GKN Driveshafts (India) Ltd., [2003] 259 ITR 19 (SC) has failed to provide an opportunity to ....