TMI Blog2018 (9) TMI 1776X X X X Extracts X X X X X X X X Extracts X X X X ..... o seek explanation of assessee on 17.09.2014 when no return for assessment year under appeal was legally pending for assessment before A.O. It, therefore, appears that the A.O. merely in absence of any reply from the assessee and on assumption of incorrect facts, formed his opinion that income chargeable to tax has escaped assessment. The A.O. did not verify the AIR information before taking any action against the assessee because the assessee did not sold the property for a total sale consideration of ₹ 65,84,000/- as noted in the reasons. It is the case of non-application of mind by the A.O. to the AIR information We are of the view that initiation of re-assessment proceedings in this case is bad and illegal and without any basis. We, accordingly, set aside the orders of the authorities below and quash the reopening of the assessment under section 147/148. Resultantly, the addition stands deleted. - Decided in favour of assessee. - ITA.No.2749/Del/2018 - - - Dated:- 4-9-2018 - Shri Bhavnesh Saini And Shri Prashant Maharishi, JJ. Assessee by : Shri M.P. Rastogi, Advocate Revenue by : Shri Vijay Kumar Jiwani, Sr. D.R. ORDER Bhavnesh Saini, T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re incorrect and non-existent. The assessee filed the return of income originally on 22.10.2008 for assessment year under appeal mentioning PAN also, copy of which is filed at page-63 of the paper book. PB-29 is certificate of the Tehsildar confirming that property under reference is at the distance of 13 KM. The A.O. do not bring any evidence on record to compute capital gains. Copy of the sale deed is filed at page-34 to show that property was sold for a consideration of ₹ 20 lakhs only. Therefore, A.O. has wrongly mentioned in the reasons that property was sold for a consideration of ₹ 65,84,000/-. Therefore, it was submitted that assumption of jurisdiction by the A.O. under section 148 is without any basis. Initiation of re-assessment proceedings is illegal and bad in law and liable to be quashed. 6. On the other hand, Ld. D.R. submitted that since assessee did not respond to the query letter issued by the A.O, therefore, A.O. rightly recorded reasons for reopening of the assessment. The Ld. D.R. relied upon many decisions in the list of cases filed and mainly relied upon the following decisions : (i) PCIT vs. Paramount Communication (P.) Ltd., 2017- TIOL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee has sold immovable property for a sale consideration of ₹ 65,84,000/- on 02.11.2007. The assessee filed copy of the sale deed at page-34 of the paper book which shows that assessee had sold the property for a total consideration of ₹ 20 lakhs only. However, the circle rate of the land have been mentioned at ₹ 45,84,000/-. The A.O. in the reasons has, however, mentioned incorrect amount of consideration at ₹ 65,84,000/- which is the total of the actual sale consideration and the value as per Circle rate. Further, the A.O. in the reasons has mentioned that assessee has not filed income tax return and capital gain on the property have not been shown. The assessee however, filed original return of income on 22.10.2008 mentioning PAN also for assessment year under appeal. Therefore, A.O. again incorrectly reported in the reasons that assessee has not filed return of income. The assessee further explained that property is situated at 13 KM away from Kot Gram Nagar Palika Parishad, Dadri which is supported by Certificate issued by Tehsildar, Dadri. The A.O. however, did not bring any evidence on record to show that property falls within 8 KM from the Munic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... immovable property. The assessee, however, filed original return within time and produced the Certificate from Tehsildar to show that it was not a capital asset liable for capital gain. The A.O. instead of dropping the re-assessment proceedings, rejected the claim of assessee without bringing any material on record. The grounds for re-assessment thus, are incorrect and non-existing and would not survive or to justify the initiation of re-assessment proceedings. The very foundation on which reopening of the assessment was based are thus unsustainable. Therefore, on the reasons recorded, the A.O. could not have formed the belief that income had escaped assessment, inasmuch as, such belief had been formed on a factually incorrect premise. 7.2 The Hon'ble Delhi High court in the case of Pr. CIT vs. RMG Polyvinyl (I) Ltd., (2017) 396 ITR 5 (Del.) held as under : The assessee filed its return for the assessment year 2008-09 and assessment was made under section 143(1) of the Income-tax Act, 1961. The Assessing Officer issued a notice for reassessment based on information received from the Investigation Wing that the assessee was the beneficiary of certain accommodation entries, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer, instead of dropping the assessment proceedings, by an order rejecting the objections filed by the assessee, had sought to proceed with the reassessment proceedings on afresh ground which was not found in the recorded. When the original ground for reopening the assessment did not survive, the Assessing Officer had sought to proceed further with the assessment on totally different grounds, which was impermissible. Despite the fact that the assessee had duly submitted that he had filed his return, wherein the very same issue had been examined, instead of dropping the proceedings, the Assessing Officer had sought to proceed further for reasons which were alien to the reasons recorded for reopening the assessment. Thus the very intent and purpose behind submitting the objections by an assessee and passing an order thereon, was frustrated. Considering the fact that a return had been fled disclosing the sale of the immovable property, the very foundation on which the reopening of the assessment was based, in the reasons recorded was unsustainable. Therefore, on the reasons recorded, the Assessing Officer could not have formed the belief that income had escaped assessment, inasmuch ..... X X X X Extracts X X X X X X X X Extracts X X X X
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