TaxTMI 
TaxTMI 
2025 (2) TMI 1570
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....he very reason recorded suffers from serious factual 0 mistakes and consequently the reason to believe is on wrong foundation and accordingly the whole proceedings become bad in law and on the facts of the present case and the Id. CIT(A) erred in sustaining the same and hence, the same may please be quashed. 3. The Id. AO erred in law as well as on the facts of the present case in not disposing off the specific objection of the assessee raised on the validity of the reassessment proceedings and the complete proceedings was in violation of settled judicial precedents and therefore bad in law and Id. CIT(A) erred in sustaining the same and hence the proceedings is prayed to be quashed. 4. The Id. CIT(A) erred in law as well as on the facts of the 0 present case in mentioning wrong facts in its order and as such the order of Id. CIT(A) suffers with serious infirmities and hence, the consequent findings deserves to be ignored and order of Id. AO be quashed. 5. The Id. CIT(A) erred in law as well as on the facts of the 0 present case in rejecting the submissions of the assessee summarily without giving any valid reasons and as such the order of Id. CIT(A) is a....
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....was transferred to faceless assessment unit. The assessee was issued notice u/s. 142(1) along with questionnaire on 22.02.2022. In response the assessee submitted its reply on 28.02.2022. 3.2 In response to the notice the assessee submitted letter dated 28.02.2022 and submitted copy of bank statement of Andhra Bank Sirsi Road branch Jaipur. Wherein found that cash has been deposited from 10.04.2012 to 29.10.2012 and the amount of deposit is in the range of between Rs. 2500 to Rs. 500000. Therefore, the assessee has deposited a total cash of Rs. 51,57,500.00 in her account. However, while issuing the notice from the department, same amount had been mentioned thrice. The assessee further submitted that cash deposited was out of savings and gift received from her husband. The assessee has submitted gift deed dated 19.01.2012. The assessee was issued a notice u/s. 142(1) on 10.03.2022 requesting her to submit further details including balance sheet as on 31.03.2013, copy of ITR for AY 2010-11 & 2011-12 and copy of ITR and wealth tax return of her husband to verify the details of cash in hand if any for the period of gift. However, the assessee did not respond to the said notice. Ass....
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....e were considered by the Assessing officer and the assessing officer concerned made additions amounting to Rs 68,46,997 u/s 69A of the Income Tax Act, 1901. vii. The appellant assessee in its submissions has stated that, "At the outset it is submitter that the Id AO reopened the proceedings on the ground that the assessee has deposited a cash of Rs 17161997/- in its bank account which is clear from the copy of reasons recorded, a copy of which is enclosed herewith (Encl.2) On the page 2 of the reasons, the following detail of information has been noted by the id. AO: 2. Brief details of information collected/received by the AO :- as per information available on records the assessee maintains bank account with Andhra Bank, Engineers Colony, Sirsi Road, Jaipur. During financial year 2012-13 relevant to assessment year 2013-14 the bank account of the assessee were collected by amount as details below :- Account No. and Bank name Cash deposits Deposits other than cash Andhra Bank, Engineers Colony, Sirsi Road, Jaipur. Rs. 51,57,500/- - Andhra Bank, Engineers Colony, Sirsi Road, Jaipur. Rs. 51,57,500/- - Andhra Bank, Engineers Colony, Sirs....
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....rokers Pvt. Ltd 291 ITR 500 held that, if the AO for whatever reason has reason to believe that, income has escaped assessment it confers jurisdiction to reopen the assessment. The relevant portion of the above decision is reproduced as under: "16. Section 147 authorises and permits the Assessing Officer to assess or reassess income chargeable to tax if he has reason to believe that income for any assessment year has escaped assessment. The word reason in the phrase reason to believe would mean cause or justification. If the Assessing Officer has cause or justification to know or suppose that income had escaped assessment, it can be said to have reason to believe that an income had escaped assessment. The expression cannot be read to mean that the Assessing Officer should have finally ascertained the fact by legal evidence or conclusion. The function of the Assessing Officer is to administer the statute with solicitude for the public exchequer with an inbuilt idea of faimess to taxpayers. As observed by the Delhi High Court in Central Provinces Manganese Ore Co. Ltd. v. ITO [1991 (191) ITR 662], for initiation of action under section 147(a) (as the provision stood at the r....
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....s free to initiate proceeding under section 147 and failure to take steps under section 143(3) will not render the Assessing Officer powerless to initiate reassessment proceedings even when intimation under section 143(1) had been issued. In the case of Peass Industrial Engineers(P) Ltd (73 Taxmann.com 185) vide decision dated 05/08/2016, the Hon'ble Gujarat High Court held as under: When the Assessing Officer is armed with the tangible material in the form of specific information received by the Investigation Wing, Ahmedabad, it is thoroughly justified in issuing a notice for reassessment. It is revealed from the said additional material available on hand and a reasonable belief is formed by the Assessing Officer that income of the assessee has escaped assessment and, therefore, once the reasonable belief is formulated by the DCIT on the basis of cogent tangible material, the DCIT is not expected to conclude at this stage the issue finally or to ascertain the fact by evidence or conclusion. Function of the Assessing Officer at this stage is to administer the statute. What is required at this stage is a reason to believe and not establish fact of escapement of income and theref....
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....ised this issue of notice at the time of assessment proceedings or on completion of the assessment order. When it would have been most appropriate for the appellant assessee to raise the issue before the AO in this case, it chose to remain silent. The language of Section 292B and 292BB is produced hereunder for reference: " ... 292B No return of income, assessment, notice, summons or other proceeding. furnished or made or issued or taken or purported to have been furnished or made or issued or taken in pursuance of any of the provisions of this Act shall be invalid or shall be deemed to be invalid merely by reason of any mistake, defect or omission in such return of income, assessment, notice, summons or other proceeding if such return of income, assessment, notice, summons or other proceeding is in substance and effect in conformity with or according to the intent and purpose of this Act. 292BB: Where an assessee has appeared in any proceeding or co- operated in any inquiry relating to an assessment or reassessment, it shall be deemed that any notice under any provision of this Act, which is required to be served upon him, has been duly served upon him in time in....
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....,46,997/-. The same are discussed as follows :- a. Cash availability in the hands of appellant assessee as per the ITR filed for AY 2008-09 was Rs 59,34,133/-" According to appellant assessee claim cash availability as on 31.03.2008 was Rs 59,34,133/- which was shown by her in her ITR of FY 2007-08 relevant to AY 2008-09, this cash was deposited by the appellant assessee during FY 2012-13 relevant to AY 2013-14. The appellant assessee has not provided any information in her submissions regarding cash balances declared by her in ITR for AY 2009-10, 2010-11, 2011-12, 2012-13. The Assessing officer has specifically asked to submit the copies of ITR for AY 2010-11 and 2011-12 vide notice u/s 142(1) dated 10.03.2022, but the appellant assessee has not submitted the ITR before the Assessing officer at the time of assessment proceedings and/or to this Appellate authority also. If appellant assessee was holding this cash balance continuously for 04 years than it would have been declared by her as cash balance in every ITR from AY 2009-10 to AY 2012-13. Thus, in the eyes of this Appellate authority the appellant assessee has failed to prove that, the cash deposite....
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....ment in the case of Chuharmal s/o Takarmal Mohnani vs Commissioner Of Income- Tax on 2 May 1988 wherein the Hon. Supreme Court had held that: "In that view of the matter and in view of the principles behind the purpose of Explanation, the assessee in the instant case, has failed to discharge his onus of proof. The aforesaid Explanation was amended by Finance Act, 1964 with effect from 1st April, 1964. The amendment was prospective in effect and in the year under reference the amendment was in force. Though the penalty proceedings are penal in nature but in the facts of this case the onus on revenue has been duly discharged. In the aforesaid view of the matter, there is no merit in this application for leave to appeal and it is accordingly dismissed." According to the Supreme Court Judgment the onus is on the Appellant assessee to prove the genuineness and creditworthiness of the transaction. Thus, in view of the above facts and discussions at point no .- (i) to (xiv), the addition made by the Assessing officer amounting to Rs 68,46,997/- u/s 69A of the Income-tax Act, 1961, is UPHELD. The grounds of the appellant are thus rejected. In th....
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....rded, a copy of which is enclosed herewith (PB 18-20). On the page 2 of the reasons (PB 19), the following detail of information has been noted by the Id. AO: 2. Brief details of information collected/received by the AO :- As per information available on records the assessee maintains bank account with Andhra Bank, Engineers Colony Sirsi Road, Jaipur. During financial year 2012-13 relevant to assessment year 2013-14, the bank accounts of the assessee were credited by amount, as detailed below :- Account No. and Bank name Cash Deposits Deposits other than cash Andhra Bank, Engineers Colony Sirsi Road, Jaipur Rs. 51,57,500/- Andhra Bank, Engineers Colony Sirsi Road, Jaipur Rs. 51,57,500/- Andhra Bank, Engineers Colony Sirsi Road, Jaipur Rs. 51,57,500/- Andhra Bank, Vandana arcade, H. No. 2-22, beside Padmavathi Plaza, Hyderabad Rs. 16,89,497/- Total Rs. 1,71,61,997/- - Thus, it is evident that during the year under consideration the aforesaid bank accounts of the assessee were credited by Rs. 1,71,61,997/-. From the record of this office, it was noticed that the assessee has not filed ....
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....t of the assessee on record before issuing of notice of reassessment. This approach of the ld. AO is not only strange but contrary to the settled judicial principles and even against the principle of natural justice. Therefore, the proceedings deserves to be quashed. 1.2.2 No application of mind - entire proceedings bad in law: From the above discussion it is very much clear that the assessee had only one bank account and further the amount taken into consideration by the ld. AO in respect of the bank account was also incorrect and without any basis. Even the ld. AO taken incorrect figures from the information which was on its own record. Thus there was no application of mind on the part of the ld. AO before initiating reassessment proceedings. The Hon'ble Bombay High Court in the case of BIC CELLO (INDIA) (P) LTD. vs. ASSISTANT COMMISSIONER OF INCOME TAX & ANR. (2024) 8 NYPCTR 314 (Bom)(copy enclosed) held as under: "15. Strangely even in the affidavit-in-reply, respondents after admitting that the bank has certified that only Rs. 1,87,39,187 were deposited in cash during financial year 2012-13, has not explained as to how they proposed to reopen the....
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....9;s case has been considered at two stages, (i) When the assessment order was passed after scrutiny under s. 143(3) of the Act and (ii) When an order under s. 154 of the Act was passed. (emphasis, italicized in print, supplied)" 17. It is also useful to reproduce para Nos. 6 & 7 of the judgment of this Court in Ankita A. Choksey vs. ITO & Ors. (2019) 411 ITR 207 (Bom), which read as under : "6. It is a settled position in law that the AO acquires jurisdiction to issue a reopening notice only when he has reason to believe that income chargeable to tax has escaped assessment. This basic condition precedent is applicable whether the return of income was processed under s. 143(1) of the Act by intimation or assessed by scrutiny under s. 143(3) of the Act. Further, the reasons to believe that income chargeable to tax has escaped assessment must be on correct facts. If the facts, as recorded in the reasons are not correct and the assessee points out the same in its objections, then the order on objection must deal with it and primafacie, establish that the facts stated by it in its reasons as recorded are correct. In the absence of the order of objections deali....
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....the impugned notices (Exh. A) dt. 30th March, 2021 & 21st June, 2021 and impugned order (Exh. B) dt. 3rd Feb., 2022." 20. Petition disposed. There will no order as to costs." SUKHVIR SINGH vs. INCOME TAX OFFICER 2024) 38 NYPTTJ 1177 (Asr): (2024) 208 ITD 97 (Asr) (CPB 53-60) 9. We have heard both the sides, perused the record, impugned order and case law cited before us. Admittedly, the reasons recorded by the AO based on the AIR information and the AO had fallaciously made addition by relying upon incorrect information appearing in AIR that the appellant had deposited cash amounting to Rs. 29,00,000 in the Capital Local Area bank Account Nos. 008200000128 and 001200000462. It is seen that the AIR information being relied upon for the purpose of reopening of the case of the appellant was incorrect in view of the fact that the appellant had deposited cash amounting to Rs. 14,00,000 instead of Rs. 17,00,000 in Capital Local Area, account No. 008200000128 as alleged by the AO. The AIR information which was factually incorrect cannot be taken as basis for reopening of assessment under s. 148. Thus, the AO while reopening proceedings under s. 148 and/or while ....
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....ement from the bank which would made it clear that the assessee did not make any such cash deposit. Therefore, the proceedings initiated against the assessee is bad in law and is to be quashed. 1.2.3 No independent enquiry by the ld. AO: It is clear from the annexure to the copy of reasons recorded that despite there being ample powers, the ld. AO did not even issued a single notice to the bank to check for the apparent discrepancy nor made any other enquiry. The information clearly shown that one bank account is not in the name of the assessee and that one amount is repeated thrice. This obviously raises a suspicion and it was incumbent on the part of the ld. AO to make enquiry to ascertain whether the information received from ITD is correct information or not? Instead of making such enquiry the ld. AO simply proceeded to issue notice of reassessment. WELL TRANS LOGISTICS INDIA (P) LTD. vs. ADDITIONAL COMMISSIONER OF INCOME TAX & ORS. (2024) 8 NYPCTR 1115 (Del) (CPB 70-77) 25. In the present case, as may be seen, there is no "close nexus" or "live link" between tangible material and the reason to believe that income has escaped assessment. The informati....
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....on'ble Court is worth mentioning in para 38 of the order: "38. We are of the view that the reassessment proceedings were triggered without the AO applying his own mind and articulating his reasons as to why he believed that the material available with him was indicative of the fact that the income which was otherwise chargeable to tax had escaped assessment. As correctly submitted, in law reasons to suspect are markedly different in quality and texture from reasons to believe. As demonstrated above, this was not a case of no enquiry. Enquiry was made by the AO concerning the subject loan which culminated in disallowance of interest while framing the order under Section 143(3) of the Act. Impugned notice under Section 148 of the Act was issued based on borrowed satisfaction; bereft of independent application of mind. 39. Thus, for the foregoing reasons, we are of the opinion that the impugned notice and order cannot be sustained." In the present case, forget any further enquiry the ld. AO even did not bother to ascertain whether three similar figures could be correct and thus it's a clear case of non-application of mind by the ld. AO In th....
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....law and without jurisdiction. Hence, we quash the reassessment proceedings and allowed this plea raised under r. 27 of the ITAT Rules, 1963. This issue of assessee's appeal is allowed Hon'ble Chandigarh bench in the matter of Shri Tek Chand vs. The ITO in ITA no.255/Chd/2020 dt. 15-3-2021, a copy of which is enclosed herewith held as under: "15. We therefore by following the ratio laid down by the Hon'ble Apex Court in the aforesaid referred to case, are of the view that the reopening under section 148 of the Act on the basis of mechanical approval without applying the mind by the Ld. Pr.CIT was not valid. Therefore, in the present case, the reopening of the assessment on the basis of notice under section 148 of the Act is quashed." In the present case also, the approval given by the authority is mechanical as given without even ascertaining correct facts and hence bad in law and is to be quashed Therefore, the reassessment proceedings initiated in the present matter is completely bad in law being out of jurisdiction and above reasons and hence, the same may please be quashed 1.4 Draft assessment order duly replied by the ass....
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....preme Court in GKN Drive Shafts (India) Ltd. vs. ITO & Ors. (2003) 179 CTR (SC) 11 : (2003) 259 ITR 19 (SC) has been ignored by directly passing the impugned assessment order. Therefore, impugned assessment order is therefore not sustainable. Hon'ble Delhi Bench in the matter of Kamlesh Kumar Agarwal vs. ITO in ITA no.1057/Del/2017 dt.18-5-2022 (CPB 13-26) has held that where the ld. AO has not followed the procedure laid down by the Hon'ble Supreme Court, the reassessment is bad in law "13. In the case on hand also the AO did not comply with the procedure as laid down by the Hon'ble Supreme Court in the case of GKN Driveshafts (India) Pvt. Ltd. making the assessment as bad in law. Therefore, in view of the above discussion, I hold that the reassessment made by the AO is bad in law and accordingly the reassessment order is quashed. As the reassessment was held to be bad in law on the preliminary grounds and the very jurisdiction of initiation of proceedings u/s 148 of the Act the other grounds raised by the assessee are not gone into as they become academic at this stage. 14. In the result, the appeal of the assessee is allowed as indicated ab....
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....s bad in law. We note that on the similar facts the Co-ordinate Bench of Surat in the case of Rinakumar A. Shah (in ITA No.172/AHD/2017 for AY.2007-08, order dated 30.04.2019, held the reassessment proceedings an invalid ......." In the present case the entire reopening is based on the ground of cash deposit and as such following the above order, the proceedings may please be quashed. 1.7.1 Incorrect consideration of facts by the ld. CIT(A): It is submitted that the ld. CIT(A) also considered incorrect facts as narrated above while deciding of the appeal of the assessee. On page 9 of the order the ld. CIT(A) held as under: "Hence, the above section is pretty curt and clear. The Appellant's ground means that, the assessee had not raised this issue as mentioned in the ground of appeal no.- 1 to 4 with in the given time ie: when such notice was issued to it or on/after finalization of its assessment order. Therefore, it is purely a post-thought and in this eyes of this Appellate authority this contention of appellant assessee, raised in its ground is not tenable. Hence, in light of the above discussions and facts of the case and in law, this ground no.- 1 to....
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....be reversed. 1.8 Reason to believe is a must even as per the decision rendered in case of RAJESH JHAVERI STOCK BROKERS (P) LTD. - Clearly not applicable as interpreted by the department: The department has referred to the decision in case of ASSISTANT COMMISSIONER OF INCOME TAX vs. RAJESH JHAVERI STOCK BROKERS (P) LTD.(2007) 291 ITR 500 (SC) to contend that sufficiency of material is not relevant. In this regard it is submitted that the decision in case of Rajesh Jhaveri (supra) is not applicable on the facts of the present case in so far as that case was relating to the legal aspect of some issue where the court have held that established escapement of income is not required. By no stretch of imagination the finding of that case be extended to a situation where the ld. AO has considered incorrect facts like in the present matter. Further even as per the decision there has to be reason to believe and an incorrect information cannot be a foundation of proper reason to believe. Therefore, reliance placed by the department on the above decision is of no avail. GOA 8: Rs. 6846997/- The ld. AO erred in making addition u/s 69A Without....
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....Explanation is being given as under :- S. No. Bank name & Branch Cash Deposit Explanation 1 Andhra Bank, Engineers Colony, Sirsi Road, Jaipur 51,57,500 S. No. 1, 2 & 3 of this table are same and repetitive. Assessee had deposited a total cash of Rs. 5157500.00 in her account. However while issuing the notice from department, same amount had been mentioned thrice. Our explanation for all three points is as below: Cash deposited out of savings and gift received from husband. 2 Andhra Bank, Engineers Colony, Sirsi Road, Jaipur 51,57,500 3 Andhra Bank, Engineers Colony, Sirsi Road, Jaipur 51,57,500 4 Andhra Bank, Vandana arcade, H.No. 2-22, beside Padmavathi Plaza, Hyderabad 16,89,497 During the year under consideration, Assessee was maintaining only one account i.e. Andhra Bank, Sirsi Road Branch Jaipur. No account is being maintained In Andhra Bank, Hyderabad branch. Bank account mentioned in this point does not belongs to assessee. I hope the above will meet with your requirements and oblige us. Thanks & Regards Sushila Choudhary Date: - 28/02/2022 2.2 Source of deposit fully ....
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....nd 20-2-2008 and out of the same cash gift was given to the assessee. 2.4.4 Details of entries in bank statement enclosed separately: It may be noted that the cash withdrawal is not clear from the bank statement as only instrument no. is mentioned. Therefore, we are separately enclosing herewith the detailed report of the entries (PB 53-56) as appearing from the software of the bank itself. Transaction type in both the entries is appearing as cash payment and abstract of both the entries are as follows: It is relevant to mention that the above is taken from the system/ software of the bank itself and can be relied upon. Still if required enquiries may be made from the bank. 2.5 Gift deed from the husband of assessee enclosed herewith: As already submitted that the assessee has received cash gift from her husband Shri B.S. Choudhary. This gift was made under a proper instrument dt. 19-1-2012, which is a duly sworn in gift deed, a copy of which is enclosed herewith (PB 57-58). It may be noted that the gift deed is properly witnessed by two persons, the complete names and addresses of these persons are duly appearing in the gift deed. If required, e....
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....as for a purpose and objective. From the beginning the explanation given was that withdrawal was to pay earnest money for purchase of immovable property, which deal did not fructify. Explanation given was not fanciful and sham story. It was perfectly plausible and should be accepted, unless there was justification and ground to hold to the contrary. Delay of some months in redeposit of part amount is the sole and only reason to disbelieve the appellant. Persons can behave differently even when placed in similar situations. Due regard and latitude to human conduct and behaviour has to be given and accepted when we consider validity and truthfulness of an explanation. One should not consider and reject an explanation as concocted and contrived by applying prudent man's behaviour test. Principle of preponderance of probability as a test is to be applied and is sufficient to discharge onus. Probability means likelihood of anything to be true. Probability refers to appearance of truth or likelihood of being realised which any statement or event bears in light of the present evidence (Murray's English Dictionary). Evidence can be oral and cannot be discarded on this ground. Asses....
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....2023 41-52 7. Sukhvir Singh Vs. Income Tax Officer 2024) 38 Nypttj 1177 (Asr): (2024) 208 Itd 97 (Asr) 53-60 8. Shri Tek Chand Vs. The ITO In ITA No.255/Chd/2020 Dt. 15-3-2021 61-69 9. Well Trans Logistics India (P) Ltd. Vs. Additional Commissioner Of Income Tax & Ors. (2024) 8 Nypctr 1115 (Del) 70-77 10. Jaya Agarwal Vs. ITO 302 CTR 241 (Del) 78-80 11. Assistant Commissioner Of Income Tax Vs. Rajesh Jhaveri Stock Brokers (P) Ltd. Dt.23-5-2007 81-92 7. Ld. AR of the assessee in addition to the written submission vehemently argued that the reasons so recorded were not correct and thereby the assumption of jurisdiction is not legally correct. The ld. AR of the assessee also submitted the same amount has been written thrice and the first deposit of cash was not related to the assessee. Even the approving authority while according the sanction has not applied mind on the issue and therefore, the appeal assessment is illegal and bad. On the merit the assessee has already disclosed the cash on hand in the previous year ITR and therefore, the merit is also explained and therefore, the merits also in favour of the assessee. 8. Per contr....
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....ng cash deposit has been received from NMS (Annexure-A) On perusal of the list Multi Year NMS A.Y. 2013-14 priority-1 in respect of ITO Ward 1(1), Jaipur which is enclosed as per Annexure-A, the assessee has made cash deposited of Rs. 1,54,72,500/- in her bank account. On enquired on ITBA System (AIR Transaction details) which is enclosed as per Annexure-B, on perusal of AIR detail the assessee has made cash deposits of Rs. 1,71,61,997/-. Since the assessee has not filed her original ITR for A.Y. 2013-14, therefore, the case of the assessee was re-opened u/s 147 of the IT Act 1961 with prior approval competent authority. Accordingly notice u/s 148 of the IT Act 1961 was issued on 31.03.2021. Therefore, contention of the assessee not acceptable. 2. The very reason recorded suffers from serious factual mistakes and consequently the reason to believe is on wrong foundation and accordingly the whole proceedings become bad in law and on the facts of the present case and the Id. CIT(A) erred in sustaining the same and hence, the same may please be quashed. 3. The Id. AO erred in law as well as on the fact of the present case in not disposing off the specific objections of ....
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....sessee did not respond to the said notice. Assessee has contended that she has received cash gift from her husband. On perusal of bank statement, it was seen that the cash have been deposited in piece meal in the F.Y. 2012-13 and note the entire amount of gift which she received as claimed. The reason for the same has not been explained by the assessee during the assessment proceedings. In the absence of details and satisfactory explanation, the cash deposits of Rs. 68,46,997/- were treated as unexplained money u/s 69A of the IT Act, and same was added to the income of the assessee. The contention of the assessee is not acceptable on the following ground- 1. First the assessee has submitted that he had closing balance of cash Rs. 59,34,133/- at the end of the F.Y. 2007-08. In support of his claim, he has submitted ITR for A.Y. 2008-09 & copy of his capital account as on 2007-08 in which cash balance of Rs. 59,34,133/- shown. Due to long time difference between the assessee had cash balance at the end of F.Y. 2007- 08 & assessee had made cash deposit during FY 2012-13. Secondly, assessee has not filed her return of income for AY 2009-10 to 2012-13, therefore, the claim of the ....
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....the stage while recording the reasons and thereafter while granting approval for the same. Thus, the assumption of jurisdiction for escapement of income has no basis. To support this view of the matter we get strength from the decision of the Hon'ble Bombay High Court's decision in the case of BIC CELLO (INDIA) (P) LTD. vs. ASSISTANT COMMISSIONER OF INCOME TAX & ANR.(2024) 8 NYPCTR 314 (Bom) wherein the court held that : "15. Strangely even in the affidavit-in-reply, respondents after admitting that the bank has certified that only Rs. 1,87,39,187 were deposited in cash during financial year 2012-13, has not explained as to how they proposed to reopen the assessment on the allegation that a sum of Rs. 3,73,72,707 chargeable to tax has escaped assessment. It clearly shows that neither there was any independent application of mind by the AO while recording reasons nor application of mind by the sanctioning authority while giving approval. The reassessment proceeding was made on wrong and incorrect facts and therefore, makes the reopening null and void. 16. As held in Tata & Sons Ltd. vs. Dy. CIT (2022) 137 taxmann.com 414 (Bom), or conclusions, certainly the notice ....
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.... reason to believe that income chargeable to tax has escaped assessment. This basic condition precedent is applicable whether the return of income was processed under s. 143(1) of the Act by intimation or assessed by scrutiny under s. 143(3) of the Act. Further, the reasons to believe that income chargeable to tax has escaped assessment must be on correct facts. If the facts, as recorded in the reasons are not correct and the assessee points out the same in its objections, then the order on objection must deal with it and primafacie, establish that the facts stated by it in its reasons as recorded are correct. In the absence of the order of objections dealing with the assertion of the assessee that the correct facts are not as recorded in the reason, it would be safe to draw an adverse inference against the Revenue. 7. Thus, we are of the view that even in cases where the return of income has been accepted by processing under s. 143(1) of the Act, reopening of an assessment can only be done when the AO has reason to believe that income chargeable to tax has escaped assessment. The mere fact that the return has been processed under s. 143(1) of the Act, does not give the AO....
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....e issue on hand. The ld. AO and that of the ld. CIT(A) has confirmed that the addition because cash was deposited from 10.04.2012 to 29.10.2012 and the amount of deposit is in the range of between Rs. 2500 to Rs. 500000. Therefore, the assessee has deposited a total cash of Rs. 51,57,500/- in her account. The contention of the assessee that cash deposited was out of savings and gift received from her husband. The assessee has submitted a gift deed dated 19.01.2012 [paper book page 57- 58]. Even the return of income so filed by the assessee for earlier year wherein she reported cash on hand for Rs. 59,34,133/-. Those documents was very well available but were not considered to explain the cash so deposited by the assessee. Considering this apparent evidence we do not considered that the cash was unexplained in the hands of the assessee and therefore, the ground no. 8 raised by the assessee stands allowed. In the result, the appeal filed by the assessee is allowed. Order pronounced in the open Court on 12/02/2025. ============= Document 1 5 Notice/ Communication Reference ID : 100046930675 147 ITBA/AST/F/147(SCN)/202 1-22/1041442654(1) Document reference ID Des....