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2015 (12) TMI 557 - ITAT BANGALORE

2015 (12) TMI 557 - ITAT BANGALORE - TMI - Reopening of assessment - Held that:- Where no return has been filed by an assessee and the AO wants to invoke jurisdiction vested upon him u/s.147 of the Act, the reasons mentioned by the AO for reopening should show a logical thought process which would show how he came to a conclusion that the total income of the such person exceeded the maximum amount which was not chargeable to tax. Now if we have a look at the reasons recorded by the AO in the cas .....

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filed a return at all, the reasons that are to be given for reopening should not be seen with the same eyes as in the case of an assessee who had filed a return of income earlier. Even if we accept this contention, reasons given by the Ld. AO for issue of notice u/s.148 of the Act, does not give even a hint of any escapement of income or tax. As for the reliance placed by the CIT (A) on the Hon’ble Apex Court judgment in the case of GKN Driveshafts (2002 (11) TMI 7 - SUPREME Court) question the .....

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MBER SINGLE MEMBER CASE For The Assessee : Shri. Suresh Muthukrishnan, CA For The Revenue : Dr. P. K. Srihari, Addl. CIT ORDER PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : In this appeal filed by assessee it has altogether raised seven grounds of which grounds 1, 5 and 7 are general needing no specific adjudication. Ground 6 is on levy of interest u/s.234C of the Income-tax Act, 1961 ( the Act in short), which is consequential in nature which again needs no specific adjudication. 02. Vide ground 2 .....

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the course of assessment proceedings of assessee s husband Shri. Govindappa, it was found by the AO that the said Shri. Govindappa had shown a loan of ₹ 10.77 lakhs as received from the assessee during the relevant previous year. Since assessee had not filed any return for the impugned assessment year, notice u/s.148 of the Act was served on the assessee with prior approval from JCIT, Range-2, Mysuru. Reasons for reopening was furnished to the assessee during the course of appellate proce .....

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id payments I am of the view that the income for the said A. Y. has escaped taxes, within the meaning of this section 147 of the IT. Act & _____ the provisions of the section 147 of the IT. Act. As the case is a beyond 4 years old, the JCIT approval is obtained. The JCJT's order dtd. 23/3/06 is placed record. Assessee pursuant to the notice u/s.148 of the Act filed return of income on 02.08.2006 declaring agricultural income of ₹ 2,75,000/- and total income of nil. In the documents .....

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riod 1991-92 to 2000-01, given by Agricultural Marketing Committee, Channapatna. He reworked the net agricultural income of the assessee at ₹ 9,55213/- for F. Ys. 1991-92 to 1999- 00 and after deducting therefrom various expenditure and outflow due to loans advanced by the assessee during these years came to a conclusion that what could have been available with the assessee for giving a loan during the relevant previous year to her husband was only ₹ 4,60,248/-. Thus out of the sum o .....

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me had escaped assessment. However CIT (A) was not impressed by this contention. He was of the opinion that assessee had advanced sum of ₹ 10,77,000/- to her husband and had failed to file a return of income at all. Thus as per the CIT (A), AO had sufficient reason to believe that income had escaped assessment. According to him the ratio of the decision of the Hon ble Apex Court in the case of GKN Driveshafts (India) Ltd v. ITO reported in 259 ITR 19, applied. He held the reopening valid. .....

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09, dt.24.08.2015], Ld. AR submitted that a reopening for further investigation, to find source of an investment was not permissible in law. According to him assessee was only an agriculturist and her only source of income was agricultural income. Simply based on surmises the reopening was resorted to. Reliance was also placed on the Hon ble Apex Court in the case of CIT v. P. K. Noorjahan [237 ITR 570]. 06. Per contra, Ld. DR strongly supporting the order of CIT (A) submitted that judgment of j .....

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when cash loans were found credited by assessee s husband in his bank account for which, source was shown as given by assessee, AO was duty bound to verify the credit. By the time the verification of assessee s husband s accounts were done, the due date for filing the return in the normal course and even for filing a belated return was long over. According to him, the only available mode of investigation with the AO was through issue of a notice u/s.148 of the Act. Therefore as per the Ld. DR, t .....

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assessee. To a question whether assessee s husband had filed a confirmation from the assessee during the course of his assessment proceedings, Ld. AR submitted that it was furnished. This was not contradicted by the Ld. DR. In a case where confirmation of a creditor is filed by a party the AO is having ample powers to verify the correctness of the confirmation. In our opinion, the first course of action that should ordinarily be resorted to, is not issue of a notice u/s.148 of the Act to the con .....

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income filed. Explanation 2 is reproduced hereunder : Explanation - 2. For the purposes of this section, the following shall also be deemed to be cases where income chargeable to tax has escaped assessment, namely:- (a) where no return of income has been furnished by the assessee although his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income-tax; (b) wher .....

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amount, not chargeable to tax. In other words where no return has been filed by an assessee and the AO wants to invoke jurisdiction vested upon him u/s.147 of the Act, the reasons mentioned by the AO for reopening should show a logical thought process which would show how he came to a conclusion that the total income of the such person exceeded the maximum amount which was not chargeable to tax. Now if we have a look at the reasons recorded by the AO in the case before us, what is mentioned is .....

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