2023 (1) TMI 830 - AT - Income Tax
Reopening of assessment u/s 147 - bank deposits made into saving bank account - unexplained investment u/s 69 - HELD THAT:- The reasons recorded in present case at best can be treated to be reason to suspect which is not sufficient for reopening the case u/s 148 - While recording the reasons to believe merely relying upon financial information cannot be treated as good enough to reopen the case.
There can be multiple capital sources of cash deposits available to the assessee and unless and until it is brought out in the reasons to believe as to how the cash deposits represent income or investment from undisclosed sources same cannot give justification to reopen the case u/s 148 and for the reason we see that the requirement of application of mind is missing in the present case on the face of reasons recorded, thus the cardinal principle of taxation that all receipts are not income and all income are not taxable income applies squarely to present facts.
It is a well settled law that, the reasons for the formation of the belief must have rational connection with or relevant bearing on the formation of the belief. Whereas in the absence of nexus between the prima facie inference arrived in the reasons recorded and information vis-a-vis material much less tangible, credible, cogent and relevant to form a reason to believe could not be made a basis to assume jurisdiction, hence cannot be relied upon; thus the proceedings initiated are purely based on surmises, conjectures and suspicion and therefore, the same are without jurisdiction; that the reasons recorded are highly vague, far-fetched and cannot by any stretch of imagination lead to conclusion of escapement of income which deserve to be quashed in the light of judgement of “ITO Vs Lakhmani Mewal Das” [1976 (3) TMI 1 - SUPREME COURT] - Appeal of assessee allowed.