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2024 (10) TMI 474
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.... 1.2. The ld. AO has grossly erred in law as well as on the facts of the case order in passing the Ex-party order u/s 144 rws 147 without providing the adequate and reasonable opportunity of being heard to the assessee in gross breach of law and are bad in law, invalid, illegal and on facts of the case, and hence the same may kindly be quashed and the resultant addition may kindly be deleted in full. 2. Rs. 28,02,415/- : The ld. CIT(A) has grossly erred in law as well as on the facts of the case in confirming the addition of Rs. 28,02,415/- made by the ld. AO on account of purchase of property by treating as income from undisclosed sources as income from other sources, also erred in not invoking any provisions of law while making the addition. The Ld. AO and CIT(A) both have also erred in not considering the vital facts and material available on record in their true perspective and sense available on record. Hence the addition so made by the ld. AO and confirmed by the ld. CIT(A) is also being contrary to the real facts of the case and not according to the provision of law, hence the same may kindly be deleted in full. 3. The ld. AO has grossly erred in law as w....
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..... 6. That this looking all these above facts there was no delay after coming to the knowledge and there was no fault of mine, and the fault if any was of other person who has not intimated to me due to some bonafide mistake, Thus due to all this reason the appeal could not be filed within time. 7. That I am not literate person and have 81 years age and suffering various diseases not able to move. 8. That the contents or averment of application for condonation of delay are true and correct and may be treated as part of this affidavit. Place: Dausa Date:. 08.2024 Deponent " Considering the reasons mentioned in the said application accompanied by an Affidavit of the assessee, I feel that the reasons mentioned in the applicat....
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.... assessee. Thereafter, the AO has passed the ex-parte assessment u/s 144 and made the addition of Rs. 28,02,415/- of above investment in purchase of property as alleged undisclosed sources without invoking any provisions of law. Aggrieved by the order of AO, the assessee preferred appeal before the ld. CIT (A). The ld. CIT (A) dismissed the appeal of the assessee after considering the submissions of the assessee. Against the said order of the ld. CIT (A), the assessee has preferred the present appeal before the Tribunal on the grounds mentioned above. 4. Before me, the ld. Counsel of the assessee reiterated his submissions as made before the first appellate authority and submitted his written submissions which are being reproduced hereunder : "1. Notice u/s 148 not served upon the assessee: At the very outset it is submitted that the Ld. AO has erred in framing there assessment order without serving notice u/s 148 properly to the appellant and therefore assessment is made without jurisdiction and deserve to be quashed. In instant case the notice u/s 148 of the IT act was not served upon the assessee. As the Ld. AO has issued the Notice U/s 148 on dt. 27/03/2018....
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....many land mark judgment which are as follows; Honorable ITAT, Agra Bench in M/s K.P. Cold Storage Vs ITO ITA No. 145/Agra/2018 had held that; In the present case AO on basis of information received from the ADIT(Inv.) that there were huge cash deposits in the bank accounts maintained by assessee during the period F.Y 2008-09, had issued notice under section 148 which culminated into assessment framed determining total income at Rs. 2,21,60,400/- as against Rs. 12,45,390/- originally returned by assessee. Assessee contended that no notice under section 148 was served upon assessee and ex-parte assessment was completed without serving any notice under section 148 till the completion of assessment which rendered the assessment order to be held void-ab-initio. It was held a valid service of a valid notice under section 148, is not a mere procedural requirement, but is a condition precedent to the validity of any assessment, reassessment or re-computation to be made under section 147 and it is so because of the use of words "shall serve on the assessee" and also the requirement to the effect "before making the assessment, reassessment or re-computation under section 147" in the....
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....d report and field correspondence mentioned above. Assessee's contention that said Ved Prakash was neither his employee nor his authorized agent, remains uncontroverted. Merely because he appeared in some other group entities will not detract the fact that notice was not served on assessee. During the course of reassessment AO was intimated about non service of notices u/s 148 and 143(2) but AO failed to take cognizance of assessee's intimation and objections. From the assessment record, remand reports, field correspondence and oral contentions, department could not demonstrate before us that notice u/s 148 was served on the assessee for A.Y. 2001-02. In the absence of a valid service of notice u/s 148 on the assessee the reassessment proceedings for AY 2001-02 are bad in law, consequently they are quashed. CIT vs. Hotline International Pvt. Ltd 296 ITR 333 (Del); Hotel Blue Moon 321 ITR 362 (SC), followed. The above decision has been affirmed by the Hon'ble High Court Delhi refer CIT v/s Chetan Gupta 94 CCH 13(Del). In the case of A.K. Kochandi & Ors. vs. Agricultural Income Tax Officer (1975) 43 CCH 0749 Ker HC (1976) 1976 CTR 0072 (KER) : (1977) 110 ITR 0406 he....
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....rd, it is gathered that the approval was in photocopy and not in original or there was no original letter or documents of approval. Further the name of the assessee was at Sr. 46 out of 56 assessee's and even there was no tick on the name of the assessee in the approval list, which creates a doubt that the approval has been received before the issue of notice u/s 148 of the Act as the approval letter lying on the file after issuance of the notice u/s 148 or not before or attached with the notice u/s 148 and may reach in the office of the AO after 31.03.2016. Thus, in our view, approval u/s 151 cannot be given of all the 56 assessee's in a single documents, as all assessee's are the independent and separate also the reason recorded are different in each case and it is not possible that there shall be same reasons. Looking to these facts and record it is also held that the procedures and way of approval and satisfaction is not proper. Here AO initiated proceedings u/s. 147 r.w.s. 148 on basis of information furnished and CIT gave approval without applying his mind in slipshod manner. As approval/sanction given by CIT was without recording his own independent satisfaction ....
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....ed initiation of assessment proceedings had started by the AO on borrowed satisfaction but not their own which is mandatory condition of the law as provided for re -opening of any assessment. Section 147 of Act clearly specify. In impugned case the Ld. AO had claimed that a certain transaction of bogus LTCG on the basis of statements as recorded of third party and Ld. AO could not have been made any enquiry regarding both the facts and without conducting any enquiry/investigation re-opened the case and issued the notices which is completely based on perverse findings and deserve to be declared as null and void ab initio. Here in impugned case AO's self-satisfaction regarding escapement of income is not bringing on record which is mandatory condition of law under section 147 of Income Tax Act, 1961, it could have been come only after conducting enquiry and investigation but Ld. AO did not make such therefore complete re-assessment proceedings come under suspicious circle, various honourable courts propounded and led on this aspect and issue direction to handle such situation. Similarly in the case of CIT v. Indo Arab Air Services (2016) 130 DTR 78/ 283 CTR 92 (Delh....
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.... in the reasons recorded. Since the belief of the AO was not based upon the material on record, but on some other material from an external source which did not find reference in the reasons recorded by him, it was held that the basic requirement of section 147 was not satisfied. Hence, the HC quashed and set aside the impugned notices under section 148 of the Act. (AY. 2009-10 to 2011-12)" In an identical matter of "Hitesh Ashok Vaswani Vs DCIT (ITAT Ahmedabad) dated 12/11/2020" Hon'ble ITAT Ahemdabad held that "the information received from investigation wing, emanating from the search records would not per se empower the Assessing Officer to exercise the power of reassessment. Such information with regard to escapement of income which comes into possession of an Assessing Officer has to be processed and, on the basis, thereof an opinion has to be formed objectively before issuing notice under Section 148 of the Act to an assessee":- "87. Coming to the second question of the assessee, we note that the power of reassessment is conferred on the Assessing Officer by the provisions of Section 147/148 of the Act. But such power is subject to the certain cond....
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....rom the Director (Investigation). Hence it is nothing but a "Borrowed satisfaction". 90. The AO, in the reasons recorded, discussed in details the materials found by the search team and thereafter initiated the proceedings by observing as detailed under: On the basis of analysis base on above seized documents it has been found that these transaction are done in cash by ASV (Ashok Sunderdas Vaswani) for the relevant assessment year 2008-09. 91. Thus what is inferred from the satisfaction recorded by the AO is that there was no application of the mind of the AO which was pre-requisite for acquiring the jurisdiction under Section 147/148 of the Act. As such the AO in the reason recorded nowhere mentioned how he reached to believe that the information received form the investigation wing represent income of the assessee and such income has escaped assessment. There is no mention in reasons recorded with respect to the fact that whether the assessee has filed original return or weather assessment under Section 143(3) was made earlier or not. if assessment under Section 143(3) completed earlier then how it was failure on the part of the assessee to disclose all....
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....d as to what amount of addition consists of. It is also noted that the AO has not stated under which provisions or section he has made the lump-sum addition either u/s 68 or 69 or 69A or trading or u/s 56 i.e. other sources. It may be worthwhile to mention that when in the Act for every additions, the provisions or section has been provided by the legislature, otherwise there shall be no meaning of the Act. Hence the addition is wrongly made against the Act. (vide page 21-22 of the order)." The same has also been held recently in the case of Rajendra Kumar Meena v/s ITO Swaimodhopur in ITA No.516/Jp/2024 dt. 2507.2024. In the case of M/S. Pasari Casting And Rolling Mills. .. vs Income-Tax Department Through Its. .. on 25 January, 2024 in W.P. (T) No. 1850/2022 dt. 25.01.2024 where it has been held that " Furthermore, the recorded reason is also silent under which provision of the Act the additions are sought to be made i.e. whether Section 68, Section 69A, Section 69B, Section 69C or any other provisions of the Act. It is not the case of the Revenue that the Petitioner has paid any cash to the so-called accommodation entry provider to obtain the accommodation entr....
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....notices u/s 142(1), 144 or SCN no addition can be made in the entire assessment order the ld. AO has only stated that the notice issued but he has not brought any proof of service of notice and he has not stated that what recourses he has adopted for service of notice. Hence also the assessment order is illegal invalid and liable to be quashed as well as the addition is also liable to be deleted in full. 2.4 Further as the correct facts are that that the assessee has made a purchase registry of agricultural land Khasra number 3415 rakba 4.87 hectre from Kanhaiya Lai S/o Sukh Lai, Yogesh Kumar S/o Nanga, Smt Kamli W/o Nangaa, Kavita D/o of Nanga resident of Dhola was Tehsil Lalsot along with Vimla Devi w/o Shri Deen Dayal on dated 29.10.2010 for Rs 49,00, 000/-. The registry cost was 7,04,830/-. Total Cost Rs 56,04,830/-. But the above land was purchased and taken possession by her husband Sh. Ram Sahay S/o Sukdev R/o Daglov Tehsil Dausa along with Smt Rukmani W/o Shri Ramphool on dated 25.05.1999 at a sales consideration of Rs 4,00,000/- and made payment of sales consideration in cash also vide sales agreement dated 25.09.1999 duly notarized and possession has been taken b....
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....2324;र हम विक्रेता गणनी क्रेतागण से विक्रय धन की सम्पूर्ण राशि अपने हिस्से अनुसार क्रेतागण से रोकड़ी प्राप्त कर उक्त विक्रय की गयी भूमि पर कब्जा वास्तविक रूप से कब्जा हमारे समान करा दिया |) Thus when the payment had given in cash then how the ld. CIT(A) can say that no mode of payment is given. How the ld. CIT(....
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....iven any prohibition that an agreement must be registered and payment made earlier shall not be accepted in want of the registration of the agreement. Here the matter of source and payment not of the registration of the documents. And the documents can be registered at any time. And in the income tax only condition of payment of full consideration and possession which had already been fulfilled in the present case and the ld. CIT(A) has not disprove the same with the help of any documentary evidences. For transfer definition kindly see definition in sec 2(47) of the IT Act. Hence all the above details may kindly be considered and taken on records. Prayer: Hence in view of the above facts, circumstances and legal position entire addition may kindly be deleted in full." 5. On the other hand, the ld. D/R has vehemently supported the orders of the Revenue authorities. 6. I have considered the rival contentions of both the parties and perused the material available on record. From perusal of the record, I observe that the AO has reopened the case of the assessee for escaping the income of Rs. 28,02,415/- on account of alleged unexplained investment in purchase of....
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.... ld. A/R has also drawn my attention on the approval of the Pr. CIT placed at page no. 7 of the paper book and also from the assessment record placed before me, I found that the ld. CIT (A) has given one consolidated approval of 12 different assessees in one short through one letter dated 21.03.2018 which is even not signed by him but signed by ITO, who is not a competent authority to give and sign the approval letter, which shows how the Pr.CIT has acted in very formal way. It is also noticed from the assessment record that the approval was in photocopy and not in original or there was no original letter or documents of approval. Further, on the satisfaction on reasons, there is no date on signature of the Pr. CIT and JCIT hence it is not clear that when they signed on the reasons recorded by the AO, there is no date given by the AO. How the approval of all the 12 different assesses can be given in one document, when all are independent or separate assessee and reasons are different. Thus it all shows that wrong and illegal manner has been adopted by all the authorities. On this preposition and issue, reference is made to decision of Coordinate Bench of the Tribunal in the case of....
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....mstances of present case, therefore, considering the totality of facts and circumstances of the case as well as the judicial pronouncements qua the issue under consideration, we find merit in the contention of the ld AR, therefore, we quash the proceedings U/s 147 of the Act." Looking to these facts and record, it is also held that the procedures and way of approval and satisfaction is not proper. Here, the AO initiated proceedings under section 147 read with section 148 on basis of borrowed information received from the Sub Registrar for valuation of the immovable property, without verifying the correctness of the information and CIT gave approval without applying his mind in slipshod manner. As approval/sanction given by CIT was without recording his own independent satisfaction as noted above, therefore, the reopening was not sustainable as per above judicial pronouncements and irregularities noted. Thus, in that eventuality, I am of the view that the issuance of notice under section 148 of the IT Act and all the consequent proceedings and assessment order passed was not in accordance with law. The case laws relied upon by the ld. D/R are not tenable in the facts and circumst....
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.... provisions or section has been provided by the legislature, otherwise there shall be no meaning of the Act. Hence the addition is wrongly made against the Act. (vide page 21-22 of the order)." Similar view has been taken by the Coordinate Bench of the Tribunal in the case of Rajendra Kumar Meena v/s ITO Swaimodhopur in ITA No.516/JP/2024 dated 25.07.2024. I draw strength from the judgment of Hon'ble Jharkhand High Court at Ranchi In the case of M/S. Pasari Casting And Rolling Mills. .. vs. Income-Tax Department in W.P. (T) No. 1850/2022 dated 25.01.2024 wherein it has been held that " Furthermore, the recorded reason is also silent under which provision of the Act the additions are sought to be made i.e. whether Section 68, Section 69A, Section 69B, Section 69C or any other provisions of the Act. It is not the case of the Revenue that the Petitioner has paid any cash to the so-called accommodation entry provider to obtain the accommodation entry to plough back own funds, hence, there is no ground/material to form reasonable belief of any accommodation entry. (Refer PCIT Vs. Meenakshi Overseas P. Ltd. reported in [2017] 395 ITR 677 (Del). I rely on the judgment of Hon'ble ....