TaxTMI 
TaxTMI 
2026 (5) TMI 1139
X X X X Extracts X X X X
X X X X Extracts X X X X
....s no close nexus or live link between the material and reason to believe that income had escaped assessment. d) No approval has been obtained from the competent authority u/s 151 of the Act. 2. That without prejudice to Ground No. 1 above, the impugned assessment order dated 27/12/2018 for Assessment Year 2011-12 passed u/s 143(3)/147 of the Act deserves to be quashed/annulles as mandatory notice u/s 143(2) of the Act was not issued to the Appellant pursuant to filing of the income tax return. 3. That the Ld. CIT(A) erred on facts and in law in in confirming the addition of Rs. 1,41,65,000/- u/s 68 of the Act on account of cash deposits in Axis bank Account No. 9100200198883351 in the name of partnership firm M/s Ravi Chopra & Associates. At any rate, such addition as confirmed is very excessive. 4. That the Ld. CIT(A) erred on facts and in law in confirming the addition of Rs. 38,50,000/- u/s 68 of the Act on account of cash deposits in HDFC bank Account No. 02942560002050 in the name of partnership firm M/s Ravi Chopra & Associates. At any rate, such addition as confirmed is very excessive." 3. Brief facts of the case are that, the Assessee ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on, therefore, submitted that the Ground No. 1 of the Assessee is devoid of merits. Thus, sought for dismissal of Ground No. 1 of the Assessee. 6. We have heard both the parties and perused the material available on record. The case of the Assessee was reopened based on the information received from Investigating Wing, New Delhi. The case of the Assessee was reopened after recording reasons for reopening on 26/03/2018. For the sake of ready reference reasons so recorded is reproduced as under:- "Brief details of information collected/received by the AO: Information vide letter F.No. ITO (Inv.)/U-3/STR/2017-18/1035 dated 13.03.2018 has been received from Income Tax Officer (Inv.), Unit-3, New Delhi, and further from ITO ward 61(1) New Delhi, It is stated that there has been frequent high value cash deposits followed by high value clearing and RTGS debits against assessee's own accounts in other banks. During the course of investigation, information was called for against which no compliance was made by the assessee. Analysis of the Bank statement of the mentioned account revealed that there are frequent entries of cash deposits in Axis Bank and the amount is....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on suspicion for making 'fishing and rowing' enquiries and not because of the A.O. had 'reasons to believe that the income had escaped assessment'. 8. The Hon'ble Supreme Court in the case of CIT Vs. Kelvinator India Ltd. (supra) held as under:- "Amendment made by the Amending Act, 1989, to reintroduce the expression reason to believe' in Section 147. A number of representations were received against the omission of the words 'reason to believe' from Section 147 and their substitution by the 'opinion' of the Assessing officer. It was pointed out that the meaning the expression, reason to believe' had been explained in number of court ruling in the past and was well settled and its omission from section 147 would give arbitrary powers to the assessing officer to reopen past assessment on mere change of opinion. To allay these fears, the Amending Act, 1989, has again amended section 147 to reintroduce the expression 'has reason to believe' in place of the words 'for reasons to be recorded by him in writing, is of the opinion'. Other provisions of the new section 147, however remain the same" 9. In the case of PCIT vs. Manzil ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... "The impugned notices must also be set aside as the AO had no reason to believe that the income of the assessee for the relevant assessment years had escaped assessment. Concededly, the AO had no tangible material in regard to any of the transactions pertaining to the relevant assessment years. Although the AO may have entertained a suspicion that the assessee's income has escaped assessment, such suspicion could not form the basis of initiating proceedings u/s 147 of the Act. A reason to believe-not reason to suspectis the precondition for exercise of jurisdiction u/s 147 or the Act." 11. Further, it is found from the reasons recorded that the proceedings under Section 147/148 of the Act has been initiated merely on the basis of Information received from Investigating Wing, New Delhi and A.O. has not made any independent enquiries by himself. It is also settled law that initiation of proceedings u/s 147/148 merely on the basis of information received from the Investigation Wing without AO making any independent enquiries himself is bad in law. Further an information received from Investigation Wing cannot be said to be tangible material so as to form a belief ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dicial precedents mentioned above, we find merit in the Ground No. 1 of the Assessee, accordingly, Ground No. 1 of the Assessee is allowed. 16. The Ld. Counsel for the Assessee has also argued on Ground No. 2 without prejudice to Ground No. 1 contending that the order dated 27/12/2018 for Assessment Year 2011-12 passed under Section 143(3)/147 of the Act is liable to be quashed as there is no notice under Section143(2) of the Act has been issued for the year under consideration. The Ld. Counsel for the Assessee has taken us through Page No. 1 of the paper book and submitted that the notice issued by the A.O. dated 19/11/2018 under Section 143(2) of the Act has been mentioned as 'A.Y 2010-11', therefore, sought for allowing the Ground No. 2. The Ld. Counsel has also relied on the following judicial precedents: i. CIT vs. Laxman Das Khandelwal 417 ITR 325 (Supreme Court), ii ACIT vs. Hotel Blue Moon 321 ITR 362 (Supreme Court) iii. PCIT vs. Staunch Marketing Pvt Ltd 404 ITR 299 (Jurisdictional Delhi HC) 17. Per contra, the Ld. Departmental Representative submitted that mentioning of Assessment Year 2010-11 in the notice dated 09/11/2018 under Section ....