TMI Blog2010 (9) TMI 1214X X X X Extracts X X X X X X X X Extracts X X X X ..... s dates during F.Y.2000-01 relevant to assessment year 2001-02. Further, the source of cash deposits of ₹ 42,38,300 was found unexplained. The AO initiated proceedings under section 147 of the Income-tax Act, 1961 (In short the Act ) with the prior approval of the Addl.CIT, Range-6, Kanpur. Notice under Section 148 of the Act dated 27.3.2008 was issued and served upon the assessee through Speed Post. In compliance, the assessee vide its written reply filed in the office of the AO on 29.4.2008, submitted that original return filed u/s 139(1) vide Acknowledgement No.002549 dated 31.10.2001 may be treated as having been filed in compliance to above said notice u/s 148 and requested for supply of reasons recorded for initiating proceedings under Section 147 of the Act, which were supplied to the assessee vide letter dated 28.5.2008. Thereafter notice u/s 143(2) of the Act was issued on 1.9.2008. Notice u/s 142(1) alongwith questionnaire was issued on 3.11.2008. After affording an opportunity of being heard to the assessee, the AO framed the assessment order u/s 147/143(3) of the Act dated 23.12.2008 determining the assessee s income at ₹ 54,43,930. The AO added a sum of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mation received .... ; I fail to comprehend as to what records he is referring to ? The records show that there is no return of income (which had been purportedly filed by the assessee company on 31.10.2001). In fact, there is no return of income on the records- either filed under sec 139(1) or filed in pursuance to notice u/s 148 of the Act. In absence of any return on record, I fail to understand as to how the AO could have formed a belief that the said cash deposits in the appellant's bank account represented concealed income of the assessee. I have also perused the report of the DDIT in this regard. There is no finding given by him that the impugned cash deposits represented concealed income of the assessee company. It appears that the AO had issued the said notice u/s 148 of the Act without due application of mind and without referring to the return filed by the assessee, only on the exhortation of the DDIT who has asked the AO: It is urgent to initiate action under section 148 relevant to Assessment Year 2001-02 .. 3.8 In this regard, I may also refer to the decision of the Hon'ble. Delhi High Court in the case of CIT v/s SFIL Stock broking Ltd (ITA No. 1056/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ciding the appeal for assessment year 2000- 01, the Tribunal has ignored the decisions of the Hon'ble jurisdictional High Court in Brij Mohan Agarwal vs.ACIT (2004) 268 ITR 400(All.), the Hon'ble Supreme Court in Raymond Woollen Mills Ltd. vs. ITO (1999) 236 ITR 34(S.C.) and the Hon'ble Kerala High Court in CIT vs. Abdul Khader Ahamed (2006) 285 ITR 57 (Ker.). We find that in the assessment year 2000-01 in the assessee s case, the Tribunal has quashed the re-assessment order on similar set of facts and therefore, the decision rendered in the assessee s case for assessment year 2000-01 is directly applicable to the facts of the present case. We further find that the reasons for re-opening the assessment are almost similar for both the years. The reasons recorded for reopening of the assessment for assessment year 2000-01 are as under : A perusal of records and information received from Addl. Director of Income Tax(Inv.), Kanpur vide his letter F.No. Addl. DIT (Inv.)/Enquiry/Rich Capital/06-07/1135 dated 22.03.2007, it is transpired that the assessee has deposited cash on different dates in Bank A/c No. C.A.-2633 with Punjab National Bank, Shstri Nagar, Kanpur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . While quashing the re-assessment for assessment year 2000-01, the Tribunal held as under : 18. This noting, though it was not complete version of report received from Addl. DIT, yet raises an important issue when he says source of these cash deposits lead to the conclusion that these credits were unexplained and the issue so arises is as what was the material with respect to source with the AO (if, at all there was any). It was only doubt but not to have reasons to believe, meaning there by that even if there was some material in respect of source, it was not sufficient for arriving at the conclusion that the deposits represented unexplained income. In other words the AO had just suspicion in his mind and since it is trite law that an assessment can not be reopened solely on the basis of suspicion, the initiation of proceedings u/s 147 of the Act on the basis of this aspect also was not valid in the eyes of law. 19. In view of the above facts and circumstances we are of the opinion that initiation of proceedings u/s147 of the Act, so far as allegation of escapement of income on account of unexplained deposits in bank is concerned, was illegal and bad in law and can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ); (vi) Madhya Pradesh Industries Ltd. V. ITO (1965) 57 ITR 637(SC) (vii) Bhimraj Panna Lal v. CIT, (1957) 32 ITR 289 (Pat), affirmed, (1961) 41 ITR 221(SC) (viii) M. Varadarajulu v. ITO, (1974) 97 ITR 476 (Mad) (ix) Siesta Steel Construction Pvt. Ltd. V. K.K. Shukare, (1985) 154 ITR 547 (Bom); (x) Chunnilal Surajmal v. CIT, (1986) 160 ITR 141 (Pat)}. 22. In view of the aforesaid discussion facts and circumstances of the case and decisions referred therein we are of the opinion that initiation proceedings u/s 147 of the Act in present case as well as issuance of notice u/s 148 of the Act was illegal and bad in law and consequently all subsequent proceedings, including reassessment framed on 20.12.2007, got vitiated. The reassessment completed on 20.12.2007 is therefore quashed being bad in law and void ab initio. 6.3 As we have already held that the facts and circumstances of the present case and the reasons recorded for re-opening the assessment are almost similar for both the years, therefore, the ld.CIT(A) was fully justified in following the decision of the Tribunal referred to above. 6.4 Now, we will discuss the decisions relie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould have earned more interest than interest in the previous year. The Tribunal categorically held that the initiation could not be said to be valid. In our opinion, the decision of the Hon'ble Supreme Court rendered in the case of Raymond Woollen Mills (Supra) is of no help to the Revenue. 6.4(iii) Shri Praveen Kumar, ld.D.R. also relied on the decision of the Hon'ble Kerala High Court in the case of Abdul Khader Ahamed (Supra). This decision is also not applicable to the facts of the present case. In that case, the AO independently applied his mind to facts and recorded prima facie belief and reasons before issuing notice. The Hon'ble High Court held that it is not a case of acting under dictates of superior Officer. The Hon'ble Court further held that it was clear from the reasons recorded by the Deputy Commissioner that he prima facie had reason to believe that the assessee had omitted to disclose fully and truly the materials facts and that as a consequence income had escaped assessment. On these facts, the Hon'ble High Court held that the reassessment was valid. Thus, the facts are entirely different and therefore, this decision is also of no help to Re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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