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2018 (4) TMI 427 - AT - Income TaxInitiation of proceedings u/s. 147 - deposition of cash in the saving bank account during the financial year 2006-07 based on AIR Information and not filing of return of income by the assessee - non application of independent mind by AO - Held that:- Pursuant to receipt of AIR information from an external agency that cash has been found deposited in assessee’s savings bank account, there has been no further examination by the AO as to whether the cash so found deposited in the assessee’s bank account has been reflected or has any connection with the reported turnover in the return of income so filed by the assessee. The reason for the said action on part of the AO is not hard to found out as the AO has concluded that the assessee has not filed any return of income after looking at the Department’s IT system and without verifying the physical records maintained by the department which shows that the assessee has filed the return of income. There is a clear contradiction on part of the AO to hold that assessee has not filed his return when the records so filed before us shows, and a fact which remain undisputed, that the return of income has been filed even though manually and which has been duly acknowledged. In the instant case, the AO has thus failed to examine the AIR information so received which would have provided the nexus or the vital link to form a prima facie opinion that income of the assessee had escaped assessment for the impunged assessment year. In absence of necessary nexus between the tangible material and formation of belief, the reassessment proceedings cannot be sustained in the instant case. - Decided in favour of assessee.
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