TMI Blog2018 (12) TMI 907X X X X Extracts X X X X X X X X Extracts X X X X ..... are held to be invalid, being reasons not sufficient to form belief of escapement of income, based on vague information. All proceedings pursuant thereto, including notice issued under Section 148 of the I.T. Act, the assessment order and the impugned order are thus annulled and cancelled. No other issue survives for adjudication, nor was anything else argued. - Decided in favour of assessee. - ITA No. 123 to 125/LKW/2017 - - - Dated:- 30-11-2018 - SHRI A.D JAIN, VICE PRESIDENT For The Appellant : Shri Rakesh Garg, Advocate For The Respondent : Shri C.K. Singh, DR ORDER These are assessee s appeals for Assessment Years 2010-11 to 2012-13, involving common issues. As such, they are being disposed of by this composite order. Details, for convenience, are being taken from ITA No.123/Lkw/2017. The following grounds have been raised: 1. Because the re-assessment framed under section 1474143(3) is without jurisdiction, bad in law, the reassessment framed be quashed. 2. Because there being no material to form reason to believe, the notice issued under section 148 is without jurisdiction, bad in law, the re-assessment framed be quashed. 3. Beca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at income of ₹ 11,18,886/- chargeable to tax has escaped assessment as per the provisions of Sec.147 of the IT. Act, 1961 read with explanation 2(b). Therefore this is a fit case for issue of notice u/s.148 of the IT. Act, 1961. 5. The ld. counsel for the assessee has contended that the AO had no material to form reason of belief of escapement of income and so, the notice issued u/s 148 of the I.T. Act and the proceedings pursuant thereto are bad in law; that it is a case of a roving and fishing enquiry, which is not permissible in law; that merely on the basis of AIR information, it cannot be concluded that there is escapement of income. 6. On the other hand, the ld. DR has contended that it was the AIR information, which formed the basis of the AO s belief of escapement of income of the assessee, amounting to ₹ 11,18,886/-, representing cash deposits in the savings bank account of the assessee; that the source of such deposits, the nature thereof and the extent of business were not explained; that therefore, the AO s formation of belief of escapement of income is justified; and that the AO was, as such, correct in issuing the notice u/s 148 of the Act t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r-looking the fact that the source of the deposits need not necessarily be the income of the assessee, the reassessment proceedings cannot be sustained. In the present case, similarly, the basis of initiation of the assessment proceedings u/s 147 was the information with the Department, of the deposits made by the assessee in his bank account. 46. Bir Bahadur Singh Sijwali (supra), makes reference to Hindusan Lever Ltd. vs. R.B. Wadkar , 268 ITR 332 (Bom.), to hold that the reasons recorded for reopening the assessment are to be examined on a standalone basis and nothing can be added to the reasons. It was also observed that the reasons must point out to an income escaping assessment and not merely need of an enquiry which may result in detection of an income escaping assessment. It was observed that it is necessary that there must be something which indicates, even if it does not establish, the escapement of income from assessment; that it is only on that basis that the AO can form a prima-facie belief that an income has escaped assessment; that merely because some further investigations have not been carried out, which, if made, could have led to detection of an income e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the view that the income has escaped assessment. The answer, in our humble understanding, is in negative. The Assessing Officer has opined that an income of ₹ 10,24,100/- has escaped assessment of income because the assessee has ₹ 10,24,100/- in his bank account but then such an opinion proceeds on the fallacious assumption that the bank deposits constitute undisclosed income, and overlooks the fact that the sources of deposit need not necessarily be income of the assessee. Of course, it may be desirable, from the point of view of revenue authorities, to examine the matter in detail, but then reassessment proceedings cannot be resorted to only to examine the facts of a case, no matter how desirable that be, unless there is a reason to believe, rather than suspect, that an income has escapement assessment. 48.The Tribunal concluded thus: but then in the case before us the only reason for reassessment proceedings was the fact of deposit of bank account which by itself does not lead to income being taxed in the hands of the assessee. Learned Departmental Representative has referred to several other judicial precedents in support of the proposition that at th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
