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2015 (6) TMI 353 - ITAT DELHI

2015 (6) TMI 353 - ITAT DELHI - TMI - Reopening of assessment - validity of notice - "reason to believe" - Held that:- Assessing Officer has issued the notice after recording reasons and there is no legal and procedural infirmity in issuing of notice. The assessee has never asked copy of the reasons recorded and in view of decision in the case of GKN Drive Shafts (India) Ltd. vs. ITO [2002 (11) TMI 7 - SUPREME Court] we find no merits in the pleadings of the Ld. AR. Further, there is a direct de .....

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ecided against assesse.

Validity of gifts - Held that:- Since the assessee has submitted affidavits, copy of gift deeds and copy of ration cards which contain the particulars of the donor including addresses, details of family members which were sufficient to prove the identity of the person, in such a situation, we hold that assessee was able to discharge the primary onus and thereafter it is for the Assessing Officer to verify the veracity of these documents or issuing the summons u .....

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In this case, the assessment u/s 147/143(3) of the Income-tax Act, 1961 was finalized on 17.12.2007 and an addition of ₹ 5,03,000/- was made which was the amount of gift received from three persons on 15.04.1999. The CIT (A) has confirmed the addition and now the assessee is in appeal before us. The assessee has taken the following grounds :- i. The Assessing Officer was not justified in reopening the assessment of the assessee. ii. The reopening of assessment of the assessee was barred by .....

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n of mind by the Assessing Officer. Admittedly, no independent application of mind was there by the assessing officer before reopening the assessment of the assessee. iv. No income of the assessee had escaped assessment in the relevant Assessment Year. The tax due had been discharged by the assessee in the assessment year itself. v. The assessee had discharged his primary onus of establishing the identity of the donors. The address and the identification of the donors had been established by the .....

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opening proceedings. In this regard, after hearing both the side, we hold that the Assessing Officer has issued the notice after recording reasons and there is no legal and procedural infirmity in issuing of notice. The assessee has never asked copy of the reasons recorded and in view of the Hon ble Supreme Court decision in the case of GKN Drive Shafts (India) Ltd. vs. ITO - 259 ITR 19, we find no merits in the pleadings of the Ld. AR. Further, there is a direct decision of Hon ble Delhi High C .....

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e. It is for the assessee and if assessee so chooses can file objections thereto. Only when such objections are filed, it becomes the duty of the Assessing Officer to dispose of all those objections first by passing speaking order and if the objections are rejected it gives a cause to the assessee to challenge the said order of the Assessing Officer by filing appropriate writ petition. This is the law declared by the Supreme Court in the case of GKN Drive Shafts (India) Ltd. v. ITO [2003]259 ITR .....

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s, could examine the issue as to whether the assessment reopened was valid or not. Once the Commissioner (Appeals) also dismissed the appeal of the assessee and against that the second appeal was also preferred before the Tribunal, the Tribunal could not have restored the matter back to the file of the Assessing Officer, and give another opportunity to the assessee to raise objections to 'reasons to believe' recorded by the Assessing Officer. Reassessment order passed by the Assessing Of .....

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, it is not allowed indirectly as well. This novel and in genuineness method adopted by the Tribunal in setting aside the reassessment orders on merits could not be accepted. Even otherwise, the assessee had not supplied any purchase inasmuch as it was still open to the assessee to challenge the validity of reassessment notice before the Commissioner (Appeals) and in fact, the assessee did so for availing that opportunity. [Para 7] As a result, the impugned order passed by the Tribunal was set a .....

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en provided with the 'reasons to believe' recorded by the Assessing Officer to accept the assessee to make his submission before the Commissioner (Appeals) predicated on the said 'reasons to believe'. While setting aside the order of the Tribunal, it was directed that the matter be remitted back to the Commissioner (Appeals). The revenue shall supply 'reasons to believe' recorded by the Assessing Officer within four weeks from today. On the supply of these 'reasons to .....

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de or mandate that the Assessing Officer shall suo motu shall supply the copy of those reasons to believe to the assessee. It is for assessee and if assessee chooses to ask for reasons then he/she can file objection thereto. Only when such objections are filed, it becomes the duty of the Assessing Officer to dispose of all those objections first by passing a speaking order and if the objections are rejected then it gives a cause to the assessee to challenge such order by filing an appropriate wr .....

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e u/s 148 of the Act. On the procedural aspect also, there is no infirmity in the notice. The notices u/s 143(2) and 143(1) were also properly served on the representative of the assessee. 3.1 Hon ble Delhi High Court in the case of A.G. Holdings Pvt. Ltd. vs. ITO reported in 352 ITR 364 has held that there is no requirement in section 147 of the Act or section 148 or section 149 that the reasons recorded for reopening an assessment should also accompany the notice of reassessment issued u/s 148 .....

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Assessing Officer is duty bound to supply the reasons recorded for reopening the assessment to the assessee, after the assessee files the return in response to the notice issued u/s 148 and on his making a request to the Assessing Officer to that effect. In the case under consideration, even the assessee has not made any request for supply of the reasons. In view of these factual matrixes, we dismiss these grounds of assessee s appeal. 4. With regard to the other issues with respect of merits o .....

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o submitted. The Assessing Officer has not verified the veracity of these affidavits, confirmations, bank accounts, ration cards and gift deeds. He had asked the assessee to produce the donors. The Assessing Officer had not made any effort to issue summons to these donors. By filing these primary documents, the assessee was able to discharge the primary onus. It was the duty of the Assessing Officer to verify the veracity of these gift deeds/affidavits and other documents prior to arriving at a .....

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e decision of Hon ble Patna High Court in the case of Sarogi Credit Corporation vs. CIT, Bihar - 103 ITR 344 wherein the Hon ble High Court has held as under :- Held, that if the credit entry in the books of the assessee stands in the name of the assessee or the assessee's wife and children, or in the name of any other close relation or an employee of the assessee, the burden lies on the assessee to explain satisfactorily the nature and source of the entry. But if the entry does not stand in .....

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on the assessee can be said to have been duly discharged by him. It will not, therefore, be for the assessee to explain further as to how or in what circumstances the third party obtained the money or how or why he came to make an advance of the money as a loan to the assessee. Once such identity is established and the creditors, as in the present case, have pledged their oath that they have advanced the amounts in question to the assessee, the burden immediately shifts on to the department to s .....

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