TaxTMI 
TaxTMI 
2026 (1) TMI 125
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....ase, the Ld. CIT(A) has erred in upholding the order of Ld. AO without considering the fact that no reasons to believe recorded by the Ld. AO u/s 148 of the Act has been provided to the appellant. 3.0 That on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in upholding the order of the Ld. AO without considering the fact that proceedings u/s 148 is also not justifiable since mere cash deposit in bank account does not amount to escaped income. 4.0 That on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in upholding the order of the Ld. AO without appreciating the fact that mere deposit of cash, information of which are received from Annual Information Return (i.e. AIR) could not be the basis for re-opening of assessment proceedings u/s 147 of the Act. 5.0 That on the facts and circumstances of the case, the Ld. CIT(A) has erred without substantiate the fact that no approval accorded u/s 151 of the Act by the Ld. AO has been provided to the appellant. 6.0 That on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in upholding the order of the Ld. AO without appreciating the fac....
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.... the Assessee such as loan or advances, gift, thus submitted that there was no 'live link' or rational connection between material and the belief of escarpment of income. The Ld. Assessee's Representative relied on the following decisions and sought for allowing Ground No. 2.0 and 4.0 of the Assessee. a) Sumer Singh Dagar Vs. ITO (ITA No. 1634/Del/2024) dated 30/04/2025 b) Shri Karan Khurana Vs. ITO (ITA No. 1783/Del/2019) dated 17/03/2021 5. Per contra, the Ld. Departmental Representative submitted that before recording the reasons, A.O. made requisite enquiry, however, the Assessee has replied to any of the notices issued by the A.O. before recording the reasons. Further submitted that the reasons have been recorded after making due enquiry, further submitted that there is no merit in the contention of the Assessee. Thus, sought for dismissal of Ground No. 2.0 and 4.0 of the Assessee. 6. We have heard both the parties and perused the material available on record. The A.O. recorded the reasons to believe on 15/03/2019 and reopened the assessment proceedings against the Assessee. The copy of the reasons recorded are produced in the Paper Book at Page No.....
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....24.1.2012 could not be made a basis to assume jurisdiction in view of the fact that such an enquiry letter is an illegal enquiry letter and thus cannot be relied upon; that the proceedings initiated are based on surmises, conjectures and suspicion and therefore, the same are without jurisdiction; that the reasons recorded are highly vague, far-fetched and cannot by any stretch of imagination lead to conclusion of escapement of income and these are merely presumption in nature; that it is a case of mechanical action on the part of the AO as there is non-application of mind much less independent application of mind so as to show that he formed an opinion based on any material that such deposits represented income. Keeping in view the facts and circumstances of the present case and the case law applicable in the case of the assessee, I am of the considered view that the reopening in the case of the assessee for the asstt. Year in dispute is bad in law and deserves to be quashed." 6. In view of the above discussion, the reassessment proceedings initiated by the AO are held to be void. Since Assessee succeeds on this legal ground i.e. validity of reassessment proceeding, the gr....
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....his fundamental error at the initiation of the case by stating that his income was mentioned as Rs. 20,56,145 instead of Rs. 69,71,191, this was summarily rejected stating that it was a clerical mistake and that the latter figure would be treated as his income. If the correct income i.e. Rs. 69,71,191 was put before the Commissioner at the time of seeking his approval, he might have taken a different view. There was nothing on record to show that the clerical mistake of substituting Rs. 20,56,145 for Rs. 69,71,191 was ever brought to the notice of the Commissioner either before or after approval or sanction under section 151(1) of the Act. The initiation of the case for reopening of the assessment was erroneous and without application of mind especially since the Assessing Officer had not examined the return filed, which would have revealed that the assessee had filed regular returns, had sufficient opening balance in his account and the withdrawals therefrom substantiated the donation made. Therefore, the reopening of the assessment was unsustainable in law and the notice issued under section 147 of the Act was to be quashed." 19. Hon'ble Bombay High Court in the case of ....
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....but in the reason itself AO recorded that earlier reassessment has been done u/s 147/148 read with section 143(3) of the Act. The AO also incorrectly recorded that sanction for reopening of assessment is required under proviso to section 151(1) of the Act despite such proviso does not exist in the statute as it was amended in 2015. The AO, therefore, recorded wrong, incorrect and non-existing reasons for reopening of the assessment. It makes clear that there is a total non-application of mind on the part of the AO while recording the reasons for reopening of the assessment. The AO has recorded incorrect amount which escaped 34 assessment. The reasons failed to demonstrate the live link between the alleged tangible material and the formation of belief that income chargeable to tax has escaped assessment. The decisions relied upon Ld. Counsel for assessee in the cases of Pr. CIT Vs. Meenakshi Overseas (P) Ltd. 395 ITR 677 (Del.), Pr. CIT Vs. RMG Polyvinyl (I) Ltd., 396 ITR 5 (Del.), Pr. CIT vs. G&G Pharma India Ltd. [2016] 384 ITR 147 (Del.) and Signature Hotels P. Ltd. Vs. ITO (supra) squarely apply to the facts and circumstances of the case. Considering the facts and circumstances ....
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....it in the bank account remains unsubstantiated as the nature of income declared by the assessee does not commensurate with the cash deposit in his saving bank account. 4. To bring the above information available with department to the knowledge of assessee. a letter was issued to the assessce on 04.02.2019 u/s 133(6) of the Income Tax Act, 1961 with the prior approval of the Pr. Commissioner of Income Tax, Faridabad requiring thereby furnishing response in this regard. It was specifically mentioned that if no response is received, appropriate proceedings under the Income Tax Act, 1961 may be initiated. In response, the assessce did not file any response to the said letter, hence, the above cash deposit in his bank account remain unexplained. 5. In absence of any response to the letter issued as well as return of income, it is clear that the assessee has deposited the cash in his bank account from his unexplained sources of income, and the same is liable to be treated as unexplained income of the assessee from undisclosed sources. Furthermore, it is evident that there is a "Live Link" between the material available on record and the escaped Income, as mentioned above. 6. In....