TMI Blog2019 (3) TMI 324X X X X Extracts X X X X X X X X Extracts X X X X ..... ening of assessment - case was reopened on a ground but additions were made on different ground - HELD THAT:- Assessee was opened for assessment after issuance of notice u/s 148 after 4 years from the end of the assessment year for the alleged escapement of income being the deposits in the bank and assessment framed thereafter on 27.12.2016. A.O did not made any addition or part thereof but has made addition for other income i.e. unaccounted investment. We therefore respectfully following the judgment JET AIRWAYS (I) LTD. [2010 (4) TMI 431 - HIGH COURT OF BOMBAY] and the given facts and circumstances of the case are of the considered view that as the Ld.A.O has not assessed the income for which the reasons were recorded in the notice issued u/s 148 of the Act, and therefore it was not open to him to make the addition for unaccounted investment - Decided in favour of assessee. - ITA No 544 & 545/Ind/2017 And ITA No 546 to 548/Ind/2017 - - - Dated:- 21-12-2018 - MR KUL BHARAT, JUDICIAL MEMBER AND MR MANISH BORAD, ACCOUNTANT MEMBER For The Revenue : Shri R.S. Ambedkar, Sr. DR For The Assessee : Shri O.P. Batheja, Adv. ORDER PER BENCH. The above cap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2015. Therefore, the assessment made by the AO in the name of the deceased person is bad in law and my kindly be quashed. Without prejudice to the above 3. The ld. CIT(A) has erred in confirming addition of ₹ 4,50,000/- being on account of unexplained cash credits in the name of Sh. Mohan Das Goyal and Shri. Naman Goyal. 4. The ld. CIT (A) has erred in confirming addition of ₹ 18,OOO/- on account of low House hold withdrawals and not allowing its set off against trading addition of ₹ 53,571/- confirmed by him. ITA No.546/Ind/2017 in the case of Smt. Laxmi Kanta Goyal Assessment Year 1996-97 1. The ld. CIT (A) has grossly erred in dismissing the ground of appeal of the appellant that the id. AO had not followed the decision of Hon'ble ITAT for the A.Y. 1998-1999, dated 19-09-2008, which is equally relevant to the A.Y. 1996-97 and 1997-98. 2. The ld. CIT (A) has grossly erred on facts and in law in dismissing the issue challenging validity of notice u/s 148 within the meaning of see. 147 explanation 2(a) r.w.s. 150(1) of the Act, holding that this issue has already been decided by the Hon'ble ITAT while deciding IT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue challenging validity of notice u/s 148 has been decided by the Hon'ble ITA.T in ITA 63/lnd/2014, dated 29-02-2016. 4. The ld. CIT (A) has erred on facts and in law in confirming addition of ₹ 3,81,460/- on account of investment in building. 4. From perusal of the above grounds we find that in ITA No.544, 545, 546 and 547/Ind/2017, common legal issue has been raised challenging the validity of the notice issued u/s 148 of the Act for the alleged escapement of income within the meaning of Section 147, explanation 2(a) read with section 150(1) of the Act. As confirmed by the Ld. Counsel for assessee that the facts relating to both the asseessee s namely Late Dinesh Kumar Goyal and Smt. Laxmikanta Goyal are almost similar, we will adjudicate these common issue on the basis of facts of Smt. Laxmikanta Goyal. 5. The facts in brief are that the appellant is an individual assessee. The assessee has desired to start business activity in form of hotel business and for that purposes she has applied for the bank loan. To avail bank loan the bank has required certain papers including the project report, Balance sheet and profit loss account. The consultant of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f both the assessee s were initiated on the basis of the findings given by Ld.CIT(A) in its appellate order for Assessment Year 1998-99 vide order dated 27.12.2014 wherein Ld. CIT(A) exceeded his powers, directing the Assessing Officer to issue notice u/s 148 of the Act for Assessment Year 1996-97 and 1997-98 in the case of both the assessee s. 8. Ld. Counsel for the assessee placed reliance on the following judgments; ( i) Computer Science Corporation India) (P) Ltd V/s Additional CIT (2014) 268 CTR 110 (Madhya Pradesh) ( ii) CIT V/s Hirdey Narain Yogendra Prakash (1971) 82 ITR 136 (All) ( iii) Consolidated Coffee Ltd V/s ITO (1985) 155 ITR 729 (Karnataka) ( iv) M.B. Traders V/s ACIT (2010) 132 TTJ 490 (Nagpur ITAT) ( v) Marubeni India (P) Ltd V/s CIT (2010) 328 ITR 306 (Del) ( vi) CIT V/s Green World Corporation (2009) 314 ITR 81 (SC) 9. Per contra Departmental Representative vehemently argued and supported the orders of lower authorities. 10. We have heard rival contentions and perused the records placed before us. The assessee is before the Tribunal in its third round and since the first round common issue has been raised by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ges that the appellant and her husband Sri Dinesh Kumar Goyal bas apparently defrauded the bank, as they have filed identical balance sheets both In the case of her and her husband by merely changing the name and the FY/AY as will be clear from the balance-sheets so filed enclosed herewith as Annexure-A-I A-2 B-1 B-2. Reference in this respect may be made to the observation of Hon'ble Madras High Court to the effect that no notice of sub-standard morality on the part of assessee should be taken so as to enable them to go back on their sworn statements given to the banks as observed in the case of Coimbatore Spinning Weaving Co. Ltd. Vs, CIT 9 5 I TR 3 75(Mad.). I n a series 0 f later judgment, it bas been held that t be sworn statements given to the bank cannot be Ignored. Some of the decisions are noted hereunder:- ( i) Jai Chand Kanji Co. Vs. CIT 157ITR 451(Raj.). ( ii) Swadeshi Cotton Mills Co. Ltd. Vs. CIT 180 ITR 651,655 (AlI.) ( iii) Puranlal Rajkumar vs. CIT 107 CTR (Cal.) 27, 30. ( iv) Kaila Sweet Supplier Vs. CIT 100 Taxman 58, 61(All.). 7. Proceeding further, the addition made by the AO for unexplained cash credit is similarl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... original order; by no stretch of imagination a higher authority can interfere with the independence which is the basic feature of any statutory scheme involving adjudicatory process . Relevant portion of the judgment of the Hon'ble Apex Court is reproduced below; 30. Indisputably, CIT (Shimla) had no jurisdiction to issue directions. Notices issued pursuant thereto would be bad in law. We may, however, place on record that the revenue in the 'List of Dates' while questioning the observations made by the High Court that the notices under section 148 of the Act for the assessment years 1996-97 and 1997-98 are not saved from the rigours of the law of limitation, under the exclusionary provisions of sections 150(1) and 153(3)(i/) of the Act, stated :- In this regard, it is important to note that these notices were issued to give effect to the directions contained in the revision order under section 263 passed by the CIT on 12-7-2004 unlike section 149 of the Act, there is no time limit under section 150(1) that starts with non obstante clause and to that extent the observations of the Hon'ble High Court are in error. Further section 150(2) provide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ), it was held The proceedings would be in time, if the second proviso to section 34(3) of the Act could be invoked. The question, therefore, is what is the true meaning of the terms of the second proviso to section 34(3) of the Act. It reads: 'Provided further that nothing in this section limiting the time within which any action may be taken, or any order, assessment or reassessment may be made, shall apply to a reassessment made under section 27 or to an assessment or reassessment made on the assessee or any person in consequence of or to give effect to any finding or direction contained in an order under section 31, section 33, section 33A, section 338, section 66 or section 66A'. Prima facie this proviso lifts the ban of limitation imposed by the other provisions of the section in the matter of taking an action in respect of or making an order of assessment or reassessment falling within the scope of the said proviso. The scope of the proviso is confined to an assessment or re-assessment made on the assessee or any person in consequence of an order to give effect to any finding or direction contained in any order made under section 31 i.e., in an a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the assessment of the year under appeal. The finding in that context is that that income does not belong to the relevant year. He may incidentally find that the income belongs to another year, but that js not a finding necessary for the disposal of an appeal in respect of the year of assessment in question. The expression direction cannot be construed in vacuum, but must be collated to the directions which the Appellate Assistant Commissioner can give under section 31. Under that section he can give directions, inter alia, under section 31 (3)(b), ( c) or (e) or section 31 (4). The expression directions in the proviso could only refer to the directions which the Appellate Assistant Commissioner or other Tribunals can issue under the powers conferred on him or them under the respective sections. Therefore, the expression finding as well as the expression direction can be given full meaning, namely, that the finding is a finding necessary for giving relief in respect of the assessment of the year in question and the direction is a direction which the appellate or revisional authority, as the case may be, is empowered to give under the sections mentioned therein. ---- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Goyal for Assessment Year 1999-2000. In this appeal the assessee apart from challenging the addition of ₹ 3,81,460/- confirmed by Ld. CIT(A) has also raised following ground; The ld. CIT (A) has grossly erred on facts and in law in ignoring the facts that the reassessment proceedings irritated u/s 148 r.w.s. 147 explanation 2{a) on 28-03-2006 were void ab initio as these were based on fallacious assumption that the aggregate bank deposits of ₹ 1,85,553/- constituted undisclosed income of the assessee overlooking fact that source of deposit need not necessarily be income of the assessee, as such, the notice was issued without application of mind by the AO for verification of source of bank deposits and did not fulfill the requirement of law for issuance of notice u/s 147 explanation 2(a)/148 . 18. At the outset Ld. Counsel for the assessee submitted that the additions made by the Ld. A.O will not stand for, as he could not make the additions on some other grounds which did not form the part of the reasons recorded by him. He also submitted that the Assessing Officer may have made other additions but before making any such addition for other reasons, additi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A No.539/Del./2016 (I.T.A.T.-Delhi) order dated 27.04.2017. ( v) Gurpal Singh V/s ITO (2016) 71 Taxmann.Com 108 (Amritsar Trib) ( vi) Mariyam IsmailRajwani V/s ITO ITA No.676/Ahd/2016 (Ahmedabad-I.T.A.T.) order dated 09.08.2016 ( vii) Indra Pal Singh V/s ITO ITA No.721/LKW/2016 (Lucknow-I.T.A.T.) order dated 18.09.2018 ( viii) M/s. Dharam Chand Sohan Lal Company V/s ITO ITA No.307 208/JP/16 (Jaipur-I.T.A.T.) order dated 01.09.2017 ( ix) Amrut Metal Coats V/s ITO CO No. 4/Ahd/2013 of ITA No.1626/Ahd/2012 and Co No.5/Ahd/2013 of ITA No.1627/Ahd/2012, A.Y.2007-08 and 2008-09 (I.T.A.T.- Ahmedabad) order dated 27.1.2016 ( x) Subrata Saha V/s ITO, ITA No.2395/Kol/2017 (I.T.A.T. Kolkata) order dated 25.07.2018 ( xi)Venu Gopal Karavadi V/s ITO ITA No.2002/Hyd/2017 (Hyderabad-I.T.A.T.) order dated 27.04.2018 ( xii) Martech Peripherals (P) Ltd V/s DCIT (2017) 394 ITR 733 (Madras HC) 20. Per contra Departmental Representative vehemently argued and supported the orders of lower authorities. 21. We have heard rival contentions and perused the records placed before us. We will first take up the legal issue raised in Ground No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ospective effect from 1.4.1989 provides that the Assessing Officer may assess or reassess income in respect of any issue . notwithstanding reasons for which such issue have not been included in the reasons recorded. Hon'ble Court further held that the word and also indicate that reassessment must be in respect to the income for which the Assessing Officer has formed an opinion and also in respect of any other income which comes to his notice subsequently. However, if the Assessing Officer accepts the objection of the assessee and does not assess the income which was a basis of the notice it is not open to him to assess the income under some other issue independently . 23. Applying the above judgment and the facts of the assessee in the instant appeal, we find that the case of the assessee was opened for assessment after issuance of notice u/s 148 of the Act after 4 years from the end of the assessment year for the alleged escapement of income of ₹ 1,85,553/- being the deposits in the bank and assessment framed thereafter on 27.12.2016. Ld.A.O did not made any addition for ₹ 1,85,553/- or part thereof but has made addition for other income i.e. unaccounted inves ..... X X X X Extracts X X X X X X X X Extracts X X X X
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