TaxTMI 
TaxTMI 
2025 (4) TMI 2123
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....IT(A) failed to appreciate that the reopening of assessment u/s 147 of the Act merely on the basis of loose, uncertified and unverified sheets purportedly received from foreign government is not justified. Hence, the reopening of assessment is bad in law and may be quashed. 4. The CIT(A) failed to appreciate that the recorded reasons contain factual mistakes that the alleged undisclosed bank account was found "consequent to survey". As it is not possible to improve upon the reasons once recorded, the factual mistake in the recorded reasons make the reopening of assessment bad in law. 5. The CIT(A) failed to appreciate that the AO was not justified in disposing off the Assessee's objections to reopening of assessment in a non-speaking manner without dealing with any of the Assessee's contentions. Therefore, the reopening of Assessee's assessment was bad in law 6. The CIT(A) failed to appreciate that the Assessee did not have any bank account outside India, much less the bank account in respect of which addition has been made. The CIT(A) failed to appreciate that on the basis of the alleged 'base note' (which also did not contain the acc....
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.... total income at Rs. Nil. The return of income was processed u/s 143(1) of the Income-tax Act, 1961 (in short 'the Act'). Subsequently, information was received in the case of the assessee from the 'French' Government indicating that the assessee was maintaining a foreign bank account in HSBC Geneva, Switzerland. The said information is commonly known as the base note in relation to bank account. The said base note containing personal details of the assessee including his name, date of birth, place of birth, sex, nationality along with date of opening bank account and amount of the balance in particular year. Subsequently, a survey u/s 133A of the Act was carried out on 30.09.2011 by the Investigation Wing of the Income-tax Department, Mumbai. During the survey proceedings, the assessee was confronted with the information related to the foreign bank account, then, he accepted the amount lying in the foreign bank account as undisclosed income in his hands. In view of the information received coupled with the finding during the course of the survey proceedings, the Assessing Officer recorded reasons to believe that income escaped assessment and issued notice u/s 148 of the Act on 30.....
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....ate Bench of the Tribunal in the case of Dhaval Exim Pvt. Ltd. v. ACIT in ITA No. 2532/Mum/2023. 6. In support of ground No. 2 of the appeal, the Ld. counsel submitted that the reassessment order passed by the AO was barred by the limitation and therefore, liable to be quashed. The Ld. counsel referred to the provisions of section 153 of the Act and submitted that reassessment proceedings have to be completed within one year from the end of the relevant financial year in which notice u/s 148 of the Act was served. Since the notice u/s 148 of the Act has been served on 30/03/2012, therefore, accordingly reassessment proceedings was to be completed on or before 31.03.2013 whereas the present assessment proceedings has been completed on 18.03.2014. 7. The Ld. Departmental Representative (DR) on the other hand, relied on the finding of the Ld. CIT(A) wherein he held that in view of the information sought under exchange of information by the FT & TR Division of the CBDT, the Assessing Officer got additional one year for completion of the assessment and therefore, assessment was within the limitation. The relevant finding of the Ld. CIT(A) is reproduced as under: "5.1 In t....
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....s and perused the relevant materials on record. The issue in dispute raised in the ground is the period within which the Assessing Officer was required to complete the reassessment proceedings under section 147 of the Act. The relevant limitation period for passing order under section 147 of the Act has been provided under section 153(2) of the Act . The relevant provision during relevant period is reproduced as under: "(2) No order of assessment, reassessment or recomputation shall be made under section 147 after the expiry of one year from the end of the financial year in which the notice under section 148 was served : Provided that where the notice under section 148 was served on or after the 1st day of April, 1999 but before the ist day of April, 2000, such assessment, reassessment or recomputation may be made at any time up to the 31st day of March, 2002 : Provided further that where the notice under section 148 was served on or after the 1st day of April, 2005 but before the 1st day of April, 2011, the provisions of this sub-section shall have effect as if for the words "one year", the words "nine months" had been substituted :109 Provided ....
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....ally mentioned that Exchange of Information provided for in the said Protocol will be applicable for information that relates to any fiscal year beginning on or after the 1st day of April 2011 and if the said notification is read with the reference made by the department, we find that the specific periods for which the reference has been made calling for information is 1-4-1995 to 31-3-2012. Therefore, qua the notification, information called by the Revenue by issuing the said reference was invalid for the period prior to 1-4-2011. 15. A reference to the decisions for analogous provisions can throw some light on this issue. The Hon'ble High Court of Rajasthan was considering the reference for Special Audit u/s 142(2A) of the Act in the case of CIT v. Bajrang Textiles [2007] 294 ITR 561 (Raj.) and held as under : "Direction of the AO for special audit of assessee's accounts under s. 142(2A) one day before the expiry of limitation for completing the block assessment being merely to get extension of time and AO having asked the special auditor to prepare the books of account in the form of cash book and ledger on the basis of seized documents/papers and also ....
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.... in the case of captioned assessee for A.Y 2009-10 is ordered accordingly". This clearly proves that while making a reference u/s 142(2A) of the Act and thereafter passing the order u/s 142(2A) of the Act, the Assessing Officer did not apply his mind and mechanically adopted the figure of A.Y 2009-10 and passed the order u/s 142(2A) of the Act for A.Y 2009-10 without realizing that he is dealing with A.Y 2008-09. 16. The contention of the ld. DR that the letter to the appellant referred to both the A.Ys i.e. 2008-09 and 2009-10 and, therefore, there is no error in the same. We do not find any force in this contention of the ld. DR. As mentioned elsewhere, since each A.Y is considered as a separate unit the Assessing Officer should have made out a case for A.Y 2008-09 only and since the order framed u/s 142(2) of the Act also refers to A.Y 2009-10, then the same cannot be used for A.Y 2008-09. 17. The quarrel before us is as to whether the assessment order framed u/s 143(3) is passed within the period of limitation period prescribed under the Act or not. In our considered opinion, for coming to such a conclusion, we can examine whether the order passed u/s 142(2A) ....
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....or to 1-4-2011. Therefore, it would be a futile exercise to wait for such information, and that too, by an invalid reference. Therefore, in our considered opinion, the period of limitation could not be extended as claimed by the Revenue. The impugned assessments are clearly bared by limitation and deserve to be quashed. 20. Since we have quashed the assessments as barred by limitation, we do not find it necessary to dwell into the merits of the case. The common ground in the captioned appeals is allowed." 9.2 Fact in the instant case are identical to the facts in the case of Shri Praveen Sawhney (supra) as the protocol in relation to the exchange of information came into operation from the first day of April, 2011 whereas the relevant financial year corresponding to the assessment year 2007-08 is from 01.04.2006 to 31.03.2007 and therefore, said protocol was not in operation during the period relevant to the assessment year therefore, this reference which was sent by the AO in the year under consideration was invalid. In view of precedent in the case of Shri Praveen Sawhney (supra), the reassessment order should have been passed within one year from the end of the finan....