TMI Blog2018 (8) TMI 266X X X X Extracts X X X X X X X X Extracts X X X X ..... turn filed in compliance to the notice under section 148. Copy of the return originally filed by assessee along with other annexures are filed in the paper book, which shows that assessee has filed original return of income within time mentioning her PAN, supported by computation of income, in which the major source of income of the assessee is income from salary, on which, tax at source have been deducted and supported by Form-16. Therefore, A.O. has wrongly mentioned in the reasons for reopening of the assessment that the transaction of purchase of property requires verification because of Non-PAN financial transaction relate to assessment year under appeal. A.O. in the reasons for reopening of the assessment, reopened assessment merely because assessee has nothing to say in the matter which is irrelevant to the reopening of the assessment. Since the A.O. did not apply his mind to the information and that A.O. did not record in the reasons that he has reason to believe that income chargeable to tax has escaped assessment, therefore, A.O. recorded incorrect and non-existing reasons for reopening of the assessment in the matter. - Decided in favour of assessee - ITA.No.42/D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e A.O. accepted the explanation of assessee and did not make any addition on account of unexplained investment in purchase of the aforesaid flat. The A.O. however, made addition of ₹ 1,50.000/- on account of disallowance of interest on borrowed capital and made addition of ₹ 72,332/- on account of disallowance of claim of LTA. The income was assessed at ₹ 10,14,020/- against returned income of ₹ 7,91,690/-. The assessee challenged the reopening of the assessment as well as both the additions before Ld. CIT(A). However, the appeal of assessee has been dismissed. 3. I have heard the learned Representatives of both the parties and perused the material on record. 4. Learned Counsel for the Assessee did not press ground No.2 of appeal of assessee, the same is dismissed. 5. The assessee in the present appeal has challenged the reopening of the assessment under section 147/148 of the I.T. Act and above two additions. The assessee also challenged the order of the A.O. as the same was passed without jurisdiction, therefore, it is null and void abinitio. Learned Counsel for the Assessee submitted that assessee is an individual and regularly assessed to tax an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AIR information in case of Smt. Swati Verma who purchased an immovable property for ₹ 1,00,96,750/- on 30.12.2008, has been received in this office for verification of non PAN financial transaction related to A.Y. 2009-10. A letter dated 19.10.2015 was issued to assessee for verification and served upon assessee by the speed post. As per AIR information assessee purchased an immovable property for ₹ 1,00,96,750/- during the year. Further, assessee has not given any reply which establishes that assessee is willfully concealed her income by way of not disclosing the source of investment made in acquisition of an immovable property. Considering the above fact, I have reason to believe that assessee has nothing to say amount of ₹ 1,00,96,750/- is escaped from assessment within the meaning of provisions of Section 147 of the I.T. Act, 1961. Therefore, proceedings u/s 147 for the assessment year under consideration is to be initiated with the approval of the Pr. Commissioner of Income Tax, Noida as per provisions of section 151(2) of the Income Tax Act, 1961. Accordingly, proposal is being submitted to the Pr. Commissioner of Income Tax, Noida. Yours ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also pertinent to observe that when all these pleas were raised before the first appellate authority, then, the Ld. First appellate authority has not dealt with a single proposition and rather dealt with the issue in an altogether different manner whether notice u/s 148 was served or not, copy of reasoning was provided or not, the procedure contemplated through the decision of the Hon'ble Supreme Court in the case of GKN Driveshaft was followed or not. The Ld. CIT(A) has not addressed the contention of the assessee that reopening of assessment in itself is bad because there is no nexus between reasons vis- -vis formation of belief exhibiting the escapement of income. Taking into consideration all these aspects, I am of the view that the AO is not justified in reopening of the assessment afresh. I allow this ground of appeal and quash the assessment. As far as other issues are concerned, since reopening of assessment has been held as bad and not in accordance with the law, therefore, I deem it not necessary to deal with the other grounds of appeal as they have become infructuous. 7.2. The Hon ble Delhi High Court in the case of Pr. CIT vs. G G Pharma India Ltd., (2016) 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. Without analyzing and forming a prima facie opinion on the basis of material produced, it was not possible for the Assessing Officer to conclude that he had reason to believe that income had escaped assessment. The order of the Tribunal was proper. No question of law arose. 7.3. The Hon ble Delhi High Court in the case of Principal Commissioner of Income Tax vs. Meenakshi Overseas Pvt. Ltd., (2017) 395 ITR 677 (Del.) has held as under : For the assesses rear 2004-05, the assessee was assessed under section 143(1) of the Income Tax Act, 1961 in November, 2004. Based on the information received from the Director (Investigation) that the assessee had received accommodation entries, notice under section 148 was issued in March, 2011 after taking approval from the appropriate authority under section 151(1). The Assessing Officer recorded that he had reasons to believe that income had escaped assessment. He recorded reasons that according to the report of the Investigation Wing, during the assessment year 2004-05, the assessee had taken accommodation entries from an entry operator paying unaccounted cash which had escaped assessment due to the failure of the assessee to d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unaccounted cash was not disclosed. Who was the accommodation entry giver and how he could be said to be a known entry operator were not mentioned. The source for all the conclusions was the investigation report. The tangible material which formed the basis for the belief that income had escaped assessment must be evident from a reading of the reasons. The reasons failed to demonstrate the link between the tangible material and the formation of the reason to believe that income had escaped assessment. The Assessing Officer had not independently considered the tangible material which formed the basis for the reasons to believe that income had escaped assessment. No error had been committed by the Appellate Tribunal in concluding that the initiation of the reassessment proceedings under section 147/148 to reopen the assessments for the assessment year 2004-05, was not legal. 7.4. The Hon ble Delhi High Court in the case of Pr. CIT vs. RMG Polyvinyl (I) Ltd., (2017) 396 ITR 5 (Delhi) has held as under : The assessee filed its return for the assessment year 2008-09 and assessment was made under section 143(1) of the Income-tax Act, 1961. The Assessing Officer issued a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the assumption of jurisdiction by initiating reassessment proceedings was valid and reassessment could not be annulled. It was a separate issue that after validly assuming jurisdiction the points on which reassessment was proposed were not added/disallowed. At the same time under section 147 the Assessing Officer could also assess such income which had escaped assessment and which comes to his notice subsequently in the course of the proceedings under section 147 . On appeal : Held, that section 148 was supplementary and complementary to section 147. Sub-section (2) of section 148 mandates reasons for issuance of notice by the Assessing Officer and sub-section (1) mandates service of notice to the assessee before the Assessing Officer proceeds to assess, reassess or recompute escaped income. Section 147 mandates recording of reasons to believe by the Assessing Officer that the income chargeable to tax had escaped assessment. All these conditions were required to be fulfilled to assess or reassess the escaped income chargeable to tax. Under Explanation 3 if during the course of the proceedings the Assessing Officer comes to the conclusion that some items have escaped assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y be treated as return filed in compliance to the notice under section 148 of the I.T. Act. Copy of the return originally filed by assessee along with other annexures are filed in the paper book, which shows that assessee has filed original return of income within time mentioning her PAN, supported by computation of income, in which the major source of income of the assessee is income from salary, on which, tax at source have been deducted and supported by Form-16. Therefore, A.O. has wrongly mentioned in the reasons for reopening of the assessment that the transaction of purchase of property requires verification because of Non-PAN financial transaction relate to assessment year under appeal. The A.O. instead of verifying the facts from the Income Tax Department, recorded incorrect and nonexisting reasons in the reasons for reopening of the assessment. Further, when original return of income was filed on time and according to the assessee it was processed under section 143(1), there were no provision under the Act to conduct any enquiry from the assessee without pendency of the assessment proceedings. Therefore, assessee is not under any obligation to file any reply before A.O. wh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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