TaxTMI 
TaxTMI 
TaxTMI 
2026 (3) TMI 162
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....ication. The appeal order passed by the Ld. CIT (A), on 15/04/2024, has been issued in the email id of her son,( who is living separately), and she was not aware of the same. Subsequently, on being informed by her son at a much later date, regarding disposal of the appeal, she contacted her lawyer, who guided her to file this appeal before the tribunal after a delay of 52 (fifty-two) days. Since the delay was not intentional on her part, she prayed for condonation of the delay and for admission of this appeal for decision on merits. The Ld. DR has no objection. In absence of any wilful neglect on her part the delay is condoned and the appeal is admitted for hearing on merits. 3. The grounds of appeal taken by the assessee in Form 36 are as follows: "1. That on the facts & in circumstances of the case and in law the Ld. CIT (A) erred in confirming the addition made by Ld. Assessing Officer & dismissing the appeal. 2. That on the facts & in circumstance of the case & in law the Ld. Assessing Officer has erred in making addition of Rs. 5,61,923/ on peak credit basis. 3. That on the facts & in circumstance Ld. CIT (A) erred by not treating notice issued u/....
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.... (ii) Initiation of proceedings u/s 147 by the AO being unsustainable in law. 8. The additional grounds are admitted being legal grounds following the law laid down by the Hon'ble Apex court in the case of NTPC vs CIT (supra). 9. At the very onset the Ld. AR of the assessee submitted that the first of the additional grounds regarding non mentioning of DIN on the body of the assessment order is "not pressed" and hence the same is treated as withdrawn. 9.1 In respect of the second ( additional ground ), the Ld. AR took us through the copy of the recorded reasons ( placed in page 1 to 3 of the PB ) and to the copy of the approval granted by the Ld. PCIT granted u/s 151(1) of the Act dated 25/03/2019 ( PB page - 4), and submitted that in the instant case the reasons recorded for initiation of the proceedings itself is factually incorrect where it is specifically recorded in serial number -6 of the form for recording reasons, that " quantum of income which has escaped assessment Rs. 47,77,923/- ", and in the Annexure - A to the reasons it is specifically written giving the break up, that the assessee has made cash deposit of Rs. 15,42,923/- plus Rs. 14,35,000/- with State Bank....
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....ve been overlooked, which proves that the approval has been granted without any application of mind and without going through materials placed before him. 10.4 The assessee relied upon various decisions of various courts and tribunal in support of his contention that reopening of assessments on the basis of incorrect recording of facts and figures are liable to be quashed because the grounds on the basis of which reassessment notices were issued were not found to exist, and for support he relied on the decision of the Hon'ble jurisdictional Punjab and Haryana High court in the case of CIT vs Atlas Cycle Industries reported 180 ITR page 319, and prayed for deletion of the assessment. 10.5 The Ld. AR further, submitted that mere deposit of cash in bank account does not automatically constitute undisclosed income and it does not enable the AO to form an automatic belief that income has escaped assessment, because each reason has to be considered on a standalone basis because the deposit of cash may flow from any source and it is not necessarily the income of the assessee. On this issue he relied on ITAT, Delhi in the case of Bir Bahadur Singh Sijwali vs ITAT [2015] 53 taxmann.co....
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.... arrive at a very logical conclusion, we are of the view, that the addition on account of meagre cash deposit of Rs. 5.61 lakhs, in bank account, stands explained to have been derived out of agricultural income of the assessee and needs to be deleted. 13. On legal aspect of the matter also we find that in the instant case there is no independent application of mind by the A.O. to the information available before him to form the basis for recording the reasons. The reasons recorded by the A.O. are also incorrect on factual figures as noted above and the reasons failed to demonstrate the link between the alleged tangible material and the formation of reasons to believe that income chargeable to tax has escaped assessment. Moreover, we also fail to understand, as to how the AO conducting inquiry u/s 133(6), with banking authorities, has recorded an incorrect figure in the reasons recorded pertaining to cash deposited in bank and investments in time deposit when no such investment existed. 14. It is well settled that reopening based on wrong reasons to believe is bad in law: (i) ITO vs Sunbarg TradeLink Pvt Ltd [2016] 74taxmann.com16 (Gujrat HC), (ii) ITO vs KMV....