TaxTMI 
TaxTMI 
2025 (12) TMI 407
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....g is illegal, arbitrary and unjustified. 2. That the Ld. Commissioner of Income Tax (Appeals) has erred in law as well as on facts in upholding the initiation of proceedings under section 148 in as much as there has been no reason to believe that there was an escapement of income and the reasons recorded are based only on borrowed information and as such upholding of the assessment passed u/s 147 is illegal, arbitrary and unjustified. 3. That Ld. Commissioner of Income Tax (Appeals) has erred in law as well as on facts upholding the initiation of proceedings u/s 148 despite the assessment having already been framed and completed twice over u/s 143(3) vide order dated 25.02.2014 and thereafter again under section 143(3) read with section 263 vide order dated 15.12.2016 which is only a change of opinion and as such upholding of the assessment passed u/s 147 is illegal, arbitrary and unjustified. 4. That Ld. Commissioner of Income Tax (Appeals) has erred in rejecting the application filed under Rule 46A of the Act for admission of additional evidence which evidence goes to the root of the matter and as such the order passed is arbitrary and unjustified. ....
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....ssment. Consequently, the assessment was made u/s 143(3) r.w.s. 263 vide order dated 15.12.2016, enhancing the earlier assessed income of Rs. 3,66,230/- to Rs. 1,08,67,030/-- 2. Further, a information has been received from the O/o DDIT(Inv.), Karnal vide letter No. 1576 dated 29.01.2018 in the case of above mentioned assessee. As per the information, Sh. Satbir Singh S/o Maan Singh had purchased immovable property from Sh. Ishwar Chandar S/o Chaman Lal H.No. 19, Randhir Colony for Rs. 78 Lacs (as per agreement to sell), whereas the sale deed was executed for Rs. 15 Lacs during the F.Y. 2010-11. 3. On further analysis of the information it is seen that the assessee has submitted before the court that he had made payment of Rs. 78 Lacs for the purchase of said property, however, the sale deed was executed at circle rate for Rs. 15 Lacs. Case being worth investigating, necessary approval u/s 133(6) of the I.T. Act, 1961 was obtained from the Competent Authority and query letter dated 08.03.2018 was issued to the assessee to furnish source of investment made in the purchase of property at Rs. 78 Lacs. But the assessee has failed to file any reply to the letter issued....
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.... order dated 20-02-2024 dismissed the appeal, against which the assessee is in appeal before the tribunal. Ld. CIT(A) has observed in his order as under: "6.4 After due consideration of the material on record, the ground-wise discussion and decision in this appeal is as under. 7. Ground No.1 to 5 are on single issue of validity of proceedings w/s.147 of the Act. Therefore, these grounds are decided together clear from the record that in various proceedings prior to initiation of assessment proceedings u/s.147, assessee had not disclosed true and correct facts regarding his total investments in the property. It is clear from the record that the fact of assessee investing total of Rs. 78 lakh in the property but registering it at Rs. 15 lakh was not on record. After completion of the assessment vide order dated 15.12.2016 passed us. 143(3) r. w.s. 263 of the Act, AO received information from the Investigation Wing/Section of Income-tax Department that assessee had purchased an Immovable property for Rs. 78 lakh and it was registered at only Rs. 15 lakh. Assessee has not brought anything on record to demonstrate that he had declared the said transaction before Assess....
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....atures, thumb impressions and photo/picture of two other buyers (Shri Lalit Mohan and Shri Shyam Sundar) are available. Thus, as per the primary document evidencing assessee's investment in the property, there was only one seller and only one buyer and the document is from Govt. Record. Regarding the assessee paying additional 63 lakh to the seller, it is needless to point out here that assessee admits it. The admission is represented by the assessee's claim made in written submission received on 27.09.2023, wherein for the first time, claim was made that there were three purchasers, i.e. satbir Sagwal, Lalit Mohan and Shyam Sundar. However, as already pointed out above in this appeal order, no independent evidence exists to demonstrate that the amount of Rs. 63 lakh paid to Shri Ishwar Chand was paid by those two other persons. On the other hand, AO had in possession documented evidence that assessee had made payment of Rs. 78 lakh for the said property but the deed was registered at the Stamp Duty valuation of Rs. 15 lakh. In view of these clear facts, the objection raised through Ground No.6 is found to be without merit. As a result, Ground No.6 is dismissed." 5. Ld. AR of th....
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....opy of which had been placed in the agricultural land amounting to Rs. 52.20.000 in her balance sheet as on 31st March, 2010, copy of which had been placed in the assessee's compilation: that both the reasons given by the AO were, thus, wrong: that the AO had thus, reopened the assessment on the basis of wrong facts and therefore, the re-opening was not valid and it was being quashed 8.2 The Tribunal followed the decisions cited as under: (i) Sagar Enterprises vs. Asstt. CIT (supra) (ii) Baba Kartar Singh Dukki Educational Trust vs. ITO (2016) 158 ITR 965 (Chd) (Trib), rendered by the Chandigarh 'SMC' Bench of the Tribunal, (iii) Shri Ram Mohan Rawat vs. ITO (supra) in (ITA No. 1014/jp/2018, order dt. 10th Oct., 2019) passed by the Jaipur Bench of the Tribunal (iv) Van Oord Dredging & Marine Contractors BV vs. Addl. Director of IT, order dt. 28th Feb., 2018, passed by the Mumbai Bench of the Tribunal in ITA Nos. 495 & 496/Mum/2016. 8.3 Similarly, in Sagar Enterprises (supra), it has been held as follows: "that it was apparent that the fact of non-filing of the return for the asst. yr. 1991-92 had weighed wit....
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....ct of the reasons that the assessee has made bogus purchases is also not based on any enquiry or verification of record by the AO but this is simply reproduction of information received from the Investigation Wing. The said information is also incomplete as regards the details of the purchases and the parties from whom such purchases were made by the assessee. Thus the reasons recorded by the AO manifest that there is no application of mind and the averments as recorded in the reasons are very vague and general and rather inconsistent with the facts available on record so far as the filing of return of income by the assessee. The formation of belief on such incorrect and vague reasons would lead the reopening of the assessment as invalid." 8.6 Then, in Van Oord Dredging and Marine Contractors BV (supra), it has been held as under: "In asst. yr. 2005-06, the AO has reopened the assessment on incorrect facts and further the AO has failed to demonstrate that there was failure on the part of the assessee to disclose fully and truly all material facts during the course of original assessment proceedings. Hence the reopening of assessment of asst. yr. 2005-06 is liable ....
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.... 15 lacs and this transaction has neither disclosed during the assessment proceedings u/s 143(3) nor during the proceedings u/s 263 of the Act. As per the sale deed the property was purchased by three buyers, and the AO considering the sole owner of the assessee recorded the reason on the wrong fact. The agreement to sale on which basis the sale deed was executed was also in the favour of the three persons. The case of the assessee was reopened for A.Y, 2011- 12 and the notice under section 148 of the Act was issued for the A.Y. 2012-13. Thus the AO had re-opened the assessment on the basis of wrong facts and therefore, the reopening is not valid. 8. The approval was also granted in a mechanical manner without considering the sale deed, executed in the favour of the assessee, and two other persons, because in the sale deed the property was purchased by the three persons. The possession was handed over to the purchasers not the assessee only. It is true that the assessee had purchased the immovable property from Sh. Ishwar Singh with two other purchasers namely Sh. Lalit Mohan and Shyam Sunder and this fact has not mentioned in the reasons for re-opening by the AO. 9. Ld. DR s....