2025 (11) TMI 1507

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....O erred in reopening the assessment itself by issue of Notice u/s 148 of IT Act, since only material available before the Id.AO was the information of assessee having Cash deposited in his saving bank account which is not sufficient reasons to believe escapement of income. 3. The Ld. CIT(A) has erred in confirming the addition of Rs. 12,10,000/- on the ground of non-compliance of Hearing Notices issued without appreciating the fact the Appellant was not aware of such Notices. 4. The Honourable Commissioner of Income tax (A) has erred in law as well as on facts in upholding addition on account of cash deposit of Rs. 12,10,000/- being business receipt treated as Income. 5. That the order of the assessment having addition of Rs. 12,10,000/- to the income of the assessee, is invalid and illegal as the Ld. A.O. has failed to mention any charge under the Income Tax Act, 1961. 6. That the order passed by the Ld. CIT u/s.250 of the I.T. Act, 1961 was arbitrary, bad in law and unjust. 7. That the assessee craves leave to urge such other ground OR grounds before OR at the time of hearing of appeal." 3. The appeal filed by the assessee is barred....

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....k account during the year under consideration. Therefore, the assessment was re-opened by issuing a notice/u/s 148 of the Act through ITBA system on 18.03.2019 (after recording reasons) after obtaining approval of the Chief Commissioner of Income Tax (OSD), X(OSD), Rajkot and duly served upon the assessee. In reply neither the return of income was filed nor any submission made by the assessee, therefore, assessing officer made addition, of Rs. 12,10,000/-, by framing the assessment order under section 144 of the Act. 7. Aggrieved by the order of the assessing officer, the assessee carried the matter in appeal before the Ld.CIT(A), who has dismissed the appeal of the assessee. Therefore, the assessee is in further appeal before this Tribunal. 8. Learned Counsel for the assessee argued that the issue raised by the assessee in his appeal, on reopening of the assessment, is equally covered by the order of the jurisdictional ITAT Rajkot in the case of Prabhaben Nandlal Ratpiya, in ITA No. 16/Rjt/2024, vide order dated 17.03.2025, wherein it was held as follows: "10. We have gone through the facts of the case, the reasons recorded for reopening u/s 147 of the Act, the subm....

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....e u/s. 148 has been obtained separately from the Principal Commissioner of Income-tax-3. Rajkot as per the provisions of Section 151 of the Act." 11. Having gone through the above reasons recorded, by the assessing officer, we find the following, inconsistency and irregularities in the reasons recorded by the assessing officer: (i) The above reasons recorded by the assessing officer does not mention the bank account number, which was escaped assessment. (ii) The nature of transactions have not been mentioned, in the reasons recorded. (iii) There is non-application of mind of the assessing officer. The assessing officer has not verified the bank account number before issuing notice u/s 148 of the Act. (iv) Mere deposit in the bank account does not constitute that income escaped assessment, the money in the bank account may be deposited out of the past savings/by sale of investment etc, which was not verified by assessing officer and hence there is complete nonapplication of mind. 12. The Ld. AO had not applied his mind and acted on mere information basis. The Ld. AO even failed to prove direct nexus with the information and reaso....

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.... there in section 147 of the Act of 1961, would not lead to the conclusion that action can now be taken for reopening assessment even if the information is wholly vague, indefinite, far-fetched and remote. The reason for the formation of the belief must be held in good faith and should not be a mere presence. The powers of the Income-tax Officer to reopen assessment, though wide, are not plenary. The words of the statute are "reason to believe" and not "reason to suspect" The reopening of the assessment after the lapse of many years is a serious matter. The Act, no doubt, contemplates the reopening of the assessment if grounds exist for believing that income of the assessee has escaped assessment. The underlying reason for that is that instances of concealed income or other income escaping assessment in a large number of cases come to the notice of the income-tax authorities after the assessment has been completed." 15. The purpose behind the relevant provisions imposing condition precedent for initiating reassessment proceedings is to ensure finality of proceedings. The Act also provides that such reason must be recorded in writing before issue of notice of reassessment s....