TMI Blog2018 (4) TMI 427X X X X Extracts X X X X X X X X Extracts X X X X ..... ows, and a fact which remain undisputed, that the return of income has been filed even though manually and which has been duly acknowledged. In the instant case, the AO has thus failed to examine the AIR information so received which would have provided the nexus or the vital link to form a prima facie opinion that income of the assessee had escaped assessment for the impunged assessment year. In absence of necessary nexus between the tangible material and formation of belief, the reassessment proceedings cannot be sustained in the instant case. - Decided in favour of assessee. - ITA 203/JPR/2017 - - - Dated:- 7-2-2018 - VIJAY PAL RAO, JUDICIAL MEMBER AND VIKRAM SINGH YADAV, ACCOUNTANT MEMBER For The Appellant : P.C. Sharma and Prashant Sharma, Advs. For The Respondent : Ajay Malik (Addl. CIT) ORDER Vikram Singh Yadav, Accountant Member T his is an appeal filed by the assessee against the order of ld. CIT (A)-Jaipur dated 05.01.2017 for Assessment Year 2007-08. 2. In ground No. 1 of the appeal, the assessee has challenged the initiation of proceedings u/s. 147 of the Act for deposition of cash of ₹ 1057000 in the saving bank account dur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to cover the alleged sum of ₹ 1057000/-. This was a false assumption of the part of the AO for invoking the provisions of section 147 of the Act without bringing on record as to how the cash deposit represented income which has escaped assessment. 7. In support of his contentions, the ld AR relied on the decision of Hon ble Gujarat High Court in case of Harikishan Sunderlal Virmani v. Dy. CIT [2017] 394 ITR 146 for the legal proposition that where the information and material is received from another agency, the AO is required to consider the material on record in the case of the assessee and thereafter required to form an independent opinion that the income has escaped assessment and without forming such an opinion, solely and mechanically, relying upon the information received from other source, there could not be any reassessment. 8. Further, the ld. AR relied on the decision of Co-ordinate Bench in case of Bir Bahadur Singh Sijwali v. ITO [2015] 68 SOT 197 (URO) (Delhi - Trib.) for the proposition that mere fact that deposits had been made that the bank account does not indicate that these deposits constitute income which has escaped assessment. It was submitted th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... years from the end of the impunged assessment year i.e, AY 2007-08. In terms of proviso to section 147 of the Act, an action under the said provisions can be taken by reason of failure on the part of the assessee to file his return of income or to disclose fully and truly all necessary facts necessary for his assessment for the subject assessment year. The contention of the Revenue at the time of recording the reasons was that the assessee had failed to file his return of income for the impunged assessment year and the same was not reflected in the IT system. Per contra, the ld AR has submitted that return of income for the AY 2007-08 was filed by the assessee manually with ITO Ward 6(1) Jaipur vide acknowledgment no. 2611000925 on 21.05.2008. It is relevant to note that the return of income so filed manually is with ITO Ward 6(1) who is the same officer who has subsequently issued the notice u/s. 148 of the Act and therefore, Revenue cannot take the plea that return was filed wrongly by the assessee with another officer not having jurisdiction over the assessee. The related contention of the Revenue that the return so filed manually not uploaded in the IT system therefore cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the assessee s income for the impunged assessment year has escaped assessment is therefore the receipt of certain AIR information from an external source i.e., banking institution with which the assessee maintains his saving bank account and the fact that assessee has failed to file his return of income for the impunged assessment year. In this regard, we refer to the decision of the Hon ble Gujarat High Court in case of Harikishan Sunderlal Virmani (supra) where it was held as under: 5.03 It cannot be disputed that on the basis of the information received from another agency, there cannot be any reassessment proceedings. However, after considering the information and material received from other source, AO is required to consider the material on record in the case of the assessee and thereafter is required to form an independent opinion that the income has escaped assessment. Without forming such an opinion, solely and mechanically, relying upon the information received from other source, there could not be any reassessment for verification. 17. Similar proposition has been laid down by the Hon ble Delhi High Court in case of Indo Arab Air Services (supra) wherein it wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as any connection with the reported turnover in the return of income so filed by the assessee. The reason for the said action on part of the AO is not hard to found out as the AO has concluded that the assessee has not filed any return of income after looking at the Department s IT system and without verifying the physical records maintained by the department which shows that the assessee has filed the return of income. When such a conclusion has already been reached, where is the question of examination of such information and its linkage with the return of income. As we have noted above, there is a clear contradiction on part of the AO to hold that assessee has not filed his return when the records so filed before us shows, and a fact which remain undisputed, that the return of income has been filed even though manually and which has been duly acknowledged. In the instant case, the AO has thus failed to examine the AIR information so received which would have provided the nexus or the vital link to form a prima facie opinion that income of the assessee had escaped assessment for the impunged assessment year. In absence of necessary nexus between the tangible material and formatio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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