TMI Blog2017 (1) TMI 1400X X X X Extracts X X X X X X X X Extracts X X X X ..... also depict escapement of income. It is also pertinent to observe that when all these pleas were raised before the first appellate authority, then, the ld. first appellate authority has not dealt with a single proposition and rather dealt with the issue in an altogether different manner whether notice u/s 148 was served or not, copy of reasoning was provided or not, the procedure contemplated through the decision of the Hon’ble Supreme Court in the case of GKN Driveshaft [2002 (11) TMI 7 - SUPREME Court] was followed or not. Thus AO is not justified in reopening of the assessment afresh.- Decided against revenue - ITA No.854/Del/2016, ITA No.855/Del/2016 - - - Dated:- 6-1-2017 - SHRI RAJPAL YADAV, JUDICIAL MEMBER Assessee By : Dr. Rakesh Gupta Shri Somil Aggarwal, Advocates Department By : Shri Rajesh Kumar, Sr.DR ORDER PER RAJPAL YADAV, JM (ORAL): The assessees are in appeal before the Tribunal against the orders of the CIT(A) dated 06.01.2016 passed for Assessment Year 2007-08. Since identical issues are involved in both these appeals, I dispose of these appeals by this consolidated order for the sake of convenience. ITA No.854/Del/2016 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of ₹ 27,77,500/- which is equivalent to share of alleged investment. Apart from this addition, he made an addition of ₹ 44,500/- on account of disbelieving the agricultural income. 5. Dissatisfied with the reopening of assessment, the assessee carried the matter before the CIT(A). The assessee has raised multifold submissions before the ld. first appellate authority. The written submissions filed by the assessee before the CIT(A) has been placed on the paper book at page 77-86. The ld. first appellate authority somehow has not gone through the alleged written submissions and upheld the reopening of assessment by recording the following finding:- 4.5 I have carefully considered the facts of the case. The AO had received specific information regarding the investment made by the appellant in immoveable property. There was no ambiguity regarding the information received. In fact the factual accuracy of the information was also accepted by the appellant. The AO was therefore fully justified in issuing notice u/s 148 of the IT Act. The appellant has raised following contentions on this issue:- (i) Notice u/s 148 was not served on the appellant. (ii) Copy of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontention, the ld. counsel for the assessee has relied upon the order of ITAT in the case of Raj Kumar Dugar (HUF) vs ITO in ITA No.35/Del/2005. He placed on record a copy of this order. The ITAT has observed that if the AO has conceived the facts erroneously, then, reopening would not be justifiable. 7. In this next fold of submissions, he contended that the AO has nowhere alleged that income has escaped assessment. The operating portion of the alleged reasons are that these were recorded with an angle to make enquiry and not with an angle to determine the escapement of taxable income. Before issuing notice u/s 148 of the Act, the ld. AO has to reach a prima facie conclusion that income has escaped assessment. For buttressing his contention, he relied upon the order of the ITAT in Shri Chunnilal Prajapati vs. ITO rendered in ITA No.290 to 293/Luc/2010. He placed on record a copy of this decision. 8. In his next fold of submissions, he contended that the ITAT Amritsar Bench in the case Amrik Singh vs ITO reported in 159 ITD 329 has examined the procedure, i.e., whether the Income-tax Act authorize an AO to conduct an enquiry without pendency of an assessment proceedings. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under sub-section (1) on the income-tax authorities referred to in that subsection, notwithstanding that no proceedings with respect to such person or class of persons are pending before him or any other income-tax authority. 34. Thus, the legislative intent is that where a search is contemplated, the Income Tax Authority can exercise the powers vested u/s 131(1), i.e., the powers regarding discovery, production of evidence, etc., inspite of the fact that no proceedings are pending before such Authority. 35. The position u/s 131(2), which relates to inquiry or investigation concerning agreement with a foreign country or specified territory and adoption by Central Government, of agreements between specified associations for double taxation relief, is exactly similar to that of matters concerning section 131(1A). Under section 131(2) also, the Assessment year : 2006-07 Authority can exercise powers u/s 131(1) even in the absence of pendency of proceedings before them. Section 131(2) reads as follows: Section 131(2): For the purpose of making an inquiry or investigation in respect of any person or class of persons in relation to an agreement referred to in section 90 or sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer mentioned in section 131(1A)can exercise such powers notwithstanding that no such proceedings are pending before him, or before any other officer. 38. For the above reasons, since in the present case, no proceeding was pending before the ITO when he issued the letter of inquiry on 13.03.2008, requiring the assessee to, inter-alia, produce evidence, such letter of inquiry is not valid in the eye of law. It does not require any cognizance to be taken of. And that being so, the assessee was not obliged to respond to this invalid and non est so-called letter of enquiry, Assessment year : 2006-07 requiring the assessee, inter-alia, to produce evidence. Quod erat demonstrandum. 9. In his next fold of contentions, he contended that in a series of decisions it has been held that mere investment either for purchase of a property or deposits in the bank would not ipso facto be construed as escapement of income. The investment might have been from different source. That would not lead to an automatic conclusion that such investment was escapement of income. In the present case, according to the ld. counsel for the assessee, the AO has conceived that since the assessee has made inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other hand, relied upon the orders of the Revenue authorities below. He contended that the assessee has not filed her return of income. The AO got an information from Annual Information Report Wing exhibiting the fact that the assessee has made investment in agricultural land. The source of such investment deserves to be enquired because the assessee is not a regular incometax assessee. Therefore, the AO has rightly recorded the reasons on the strength of the information possessed by him and rightly issued a notice. The first appellate authority has concurred with the conclusion drawn by the AO on the issue of reopening. 12. With the assistance of the ld. representatives, I have gone through the record carefully. Section 147 of the Act contemplates that if the AO has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of section 148 to 153, assessee or re-assess such income . A perusal of this section would show that in order to harbor a belief that income has escaped assessment, the AO ought to have formed an opinion on the basis of the material possessed by him exhibiting the facts that incom ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
