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TMI Blog2016 (5) TMI 92X X X X Extracts X X X X X X X X Extracts X X X X ..... fore, for the purpose of disposal of all the appeals, we take up the appeal of the assessee, Smt. Sarika Jain, as under. I. T. A. No. 316 of 2012 : (Smt. Sarika Jain) 3. In this case, the Assessing Officer passed the order under section 143(3) read with section 148 of the Income-tax Act dated December 30, 2010. The facts of the case are that in this case, the original assessment for the assessment year 2005-06 had been reopened by issuing of notice under section 148 and after recording reasons, which are reproduced in the assessment order, the Assessing Officer issued a notice on March 30, 2010. The main purpose of issuance of the notice under section 148 was that the assessee had received a gift of Rs. 21 lakhs from one Shri Sunil Duggal and Shri Gaurav Duggal and as per the reasons, it was observed by the Assessing Officer on the basis of the letter received from the Deputy Commissioner of Income-tax, Central Circle, Ludhiana, that the assessee had received a gift of Rs. 21 lakhs from Shri Sunil Duggal and Shri Gaurav Duggal and since they did not have the blood relation with the assessee and neither there was any occasion for the gift, therefore, the assessment was reopened to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... material on record and noted that the donors have made a series of gifts, therefore, the same could not be said to be voluntary and, accordingly, confirmed the addition on the merits as well by following the decision of the hon'ble Punjab and Haryana High Court in the case of Lall Chand Kalra v. CIT [1981] 22 CTR (P&H) 135 and upheld the action of the Assessing Officer and, accordingly, dismissed the appeal of the assessee. 7. We have heard the learned representatives of both parties. Learned counsel for the assessee reiterated the submissions made before the authorities below and referred to the paper book page 19 which is reasons recorded under section 148 of the Income-tax Act dated March 29, 2010, and submitted that though the gift was received from Shri Sunil Duggal only donor, in the reasons the name of two donors, Shri Gaurav Duggal and Shri Sunil Duggal, have been wrongly mentioned. He has referred to paper book pages 1 and 2 which is acknowledgment of filing of the return and computation of income for the year under consideration and submitted that the return is filed on August 1, 2005, at Rs. 1,46,513 but in the reasons, the Assessing Officer has mentioned the date o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment. Similarly, there was no tangible material forwarded by the Deputy Commissioner of Income-tax, Central Circle, Ludhiana, which could be the basis of reopening of the assessment. Therefore, reopening of the assessment is wholly unjustified. He has filed several decisions of different High Courts and of the different Benches of the Tribunal in support of his contention and also relied upon the decision of the hon'ble Gujarat High Court in the case of Jagat Jayantilal Parikh v. Deputy CIT [2013] 355 ITR 400 (Guj) in which it was held that "no assessment could be reopened under section 148 unless the Assessing Officer formed his independent belief to his subjective satisfaction that income has escaped assessment". Learned counsel for the assessee also on the merits submitted that the addition is wholly unjustified. (i) On the other hand, the learned Departmental representative relied upon the orders of the authorities below and submitted that prima facie details were available before the Assessing Officer to reopen the assessment. The reopening of the assessment is done on the basis of the report received from the Deputy Commissioner of Income-tax, Central Circle, Ludhia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sarika Jain. During the course of the assessment proceedings of Duggal group of cases confirmation of donees were filed. From the perusal of confirmation of Sh. Gautam Jain before the Deputy Commissioner of Income-tax, Centre Circle-V, Ludhiana, dated February 28, 2007, it is found that the donor, Shri Gaurav Duggal and Sh. Sunil Duggal, have no blood relation with the donee nor was there any specific occasion for making such huge gift. The gift was made only for love and affec tion for the donee. The gift received is from totally a strange person. Hence, the case of the donee is clearly found to be hit by Lall Chand Kalra v. CIT reported at [1981] 22 CTR (P&H) 135. It is also clear that the assessee had introduced her own undisclosed money by way of alleged gift taken by her in books of account. In view of the facts and circumstances of the case as detailed above it is clear that the entire amount of Rs. 21,00,000 is the assessee's own income. I have, therefore, reason to believe that by reason of failure on the part of the assessee to disclose fully and truly all material facts necessary for its assessment, an amount of Rs. 21,00,000 has escaped income for the assessment ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fact noted in the reasons recorded for reopening of the assessment. Further, it is noted in the reasons that the Assessing Officer has reason to believe that by reason of failure on the part of the assessee to disclose fully and truly all material facts necessary for its assessment. However, it is not clarified as to how there is a failure on the part of the assessee to disclose fully and truly all material facts because there is no column in the return of income to disclose the receipt of the gifts. These facts clearly prove that the Assessing Officer recorded wrong facts and wrong information in the reasons recorded under section 148 of the Income-tax Act for reopening of the assessment and would prove that the Assessing Officer has not applied his independent mind before recording the reasons for reopening of the assessment. Thus, the Assessing Officer has not formed his independent belief to his subjective satisfaction that income has escaped assessment. The Assessing Officer admitted in reasons that gift was made only for love and affection for the donee. (ii) The copy of letter dated March 5, 2007, issued by the Deputy Commissioner of Income-tax, Circle V, Ludhiana, has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 56(1) and the issue before the hon'ble High Court was with regard to the creditwor thiness of the donor. In this case, there were no satisfactory evidences on record to prove that the donors owned land measuring 40 acre and 20 killas or that their annual net income was in fact Rs. 30,000 or Rs. 18,000 as alleged by them. Therefore, it was held that donors were not men of means. It was also found that the land belong to the donors, were barani and there was no evidence on record to show as to what was their income. Apart from this issue of the creditworthiness of the donor, the other issue was that both the donors were strangers to the donees and there was no occasion to make a gift. Reference was answered against the assessee and in favour of the Revenue. Therefore, this case was decided on the merits of both these two issues and would not deal with the reopening of the assessment under section 148 of the Income-tax Act. In the case of the assessee in appeal, no information of the creditworthiness of the donor is available. The assessee was not totally stranger to donor. 10. It is argued before us that the gift deed, affidavit of the donor, his acknowledgment of filing of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ason to believe that any income chargeable to tax has escaped assessment. There should be tangible material to come to the conclusion that there is escapement of income from assessment. Reasons must have a live link with the formation of the belief." 12. The hon'ble Punjab and Haryana High Court in the case of CIT v. Smt. Paramjit Kaur [2009] 311 ITR 38 (P&H) held as under (headnote) : "Held, that the Assessing Officer had not examined the information received from the survey circle before recording his own satis faction of escaped income and initiating reassessment proceedings. The Assessing Officer had thus acted only on the basis of suspicion and it could not be said that it was based on belief that the income chargeable to tax had escaped income. The Assessing Officer had to act on the basis of 'reasons to believe' and not on 'reasons to suspect'. The Tribunal rightly concluded that the Assessing Officer had failed to incorporate the material and his satisfaction for reopening the assessment and, therefore, the issuance of notice under section 148 of the Act for reassessment proceedings was not valid." 13. The hon'ble Delhi High Court in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here was escapement of income 'on going through the return of income' filed by the assessee after he accepted the return under section 143(1) without scrutiny, and nothing more. This was nothing but a review of the earlier proceedings and an abuse of power by the Assessing Officer. The reasons recorded by the Assessing Officer did confirm the apprehension about the harm that a less strict interpretation of the words 'reason to believe' vis-a-vis an intimation issued under section 143(1) could cause to the tax regime. There was nothing in the reasons recorded to show that any tangible material had come into the possession of the Assessing Officer subsequent to the issue of the intimation. The notice reflected an arbitrary exercise of the power conferred under section 147." 16. The hon'ble Punjab and Haryana High Court in the case of CIT v. Atlas Cycle Industries [1989] 180 ITR 319 (P&H) held as under (headnote) : "Held, (i) that the Tribunal was right in cancelling the reassess ment as both the grounds on which the reassessment notice was issued were not found to exist, and, therefore, the Income-tax Officer did not get jurisdiction to make a reassessment." 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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