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TMI Blog2019 (3) TMI 1242X X X X Extracts X X X X X X X X Extracts X X X X ..... es. He, therefore, after obtaining the satisfaction of the Principal CIT, Meerut, issued notice u/s 148 of the IT Act after recording the following reasons:- "Reasons for issuing notice u/s 148 of the IT Act, 1961. As per the online AIR information received from the CIB, Kanpur, the assessee had deposited cash of Rs. 3010415/- in her saving bank account with SYNDICATE BANK during the financial year 2009-10. Query letter dated 04.01.2017 was issued to the assessee for verification of financial transaction entered into by her but no reply was received. Since, the source of cash deposit has not been explained and the PAN and 1TR of the assessee is also not available, it is presumed that the cash was deposited by the assessee out of her income from undisclosed sources. 2. In view of these facts, 1 have reason to believe that income of Rs. 3010415/- chargeable to tax has escaped assessment for the A.Y. 2010-11 within the meaning of section 147 of the Income-tax Act, 1961. Therefore, to assess the escaped income, proceedings u/s 147 of the Income Tax Act, 1961 are being initiated in this case and notice u/s 148 is being issued." 3. The assessee did not file the return in response ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g proceedings and accordingly notice issued u/s 148 and all subsequent proceedings including orders of Ld AO and Ld CIT-A are void ab initio; 2. That orders passed by Ld AO and Ld CIT-A are bad in law as mere AIR information is the basis to reopen the present case u/s 148 of the Act which information cannot be treated as giving rise to valid and adequate reasons to belief that income has escaped assessment within the meaning of section 148 of the Act, accordingly notice issued u/s 148 and all subsequent proceedings including orders of Ld AO and Ld CIT-A are void ab initio; 3. That orders passed by Ld AO and Ld CIT-A are bad in law since notice u/s 148 was admittedly not served on assessee in accordance with law and as stated by CIT-A service was made on assessee's daughter which itself is seriously disputed, and said purported service cannot give valid jurisdiction to the Ld AO to pass order u/s 144/147, accordingly notice issued u/s 148 and all subsequent proceedings including orders of Ld AO and Ld CIT-A are void ab initio; Merits of the case 4. That Ld CIT-A seriously erred in confirming the arbitrary and unlawful addition of Rs. 20,30,415 without appreciating that sourc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the merit of the case is concerned, the ld. counsel of the assessee submitted that the deposits made in the bank account of the assessee are out of sale of agricultural land on different dates and, therefore, sale of agricultural land being exempt from tax, no addition could be made. 5.2 The ld. DR, on the other hand, relied on the following decisions and submitted that the reassessment proceedings initiated by the Assessing Officer and upheld by the CIT(A) are perfectly valid as per law. The assessee is a non-filer of income-tax return and when information was received by the Assessing Officer from the CIB that there were huge cash deposits and the assessee did not reply to the query raised by the Assessing Officer regarding the source of such deposit, there was no other option but to initiate proceedings u/s 148 of the IT Act:- 1. "PCIT Vs Paramount Communication (P.) Ltd. (2017-TIQL-253-SC-IT) where Hon'ble Supreme Court dismissed SLP of assessee. Information regarding bogus purchase by assessee received by DRI from CCE which was passed on to revenue authorities was 'tangible material outside record' to initiate valid reassessment proceedings. PCIT Vs Paramount Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat reopening initiated in case of an assessee who had not filed his return, could not be claimed by the assessee to be based on 'change of opinion'. The Assessee had also challenged the action of High Court in holding that when the AO had tangible material at his command to form a bonafide belief that income chargeable to tax had escaped assessment, the writ court would not interfere with the formation of such belief unless it is shown to be wholly perverse. 8. Indu Lata Ranqwala Vs DCIT [2017] 80 taxmann.com 102(Delhi) [2016] 384 ITR 337 (Delhi) [2016] 286 CTR 474 (Delhi)where Hon'ble Delhi High Court held that where initial return of income is processed under section 143(1), it is not necessary in such a case for Assessing Officer to come across some fresh tangible material to form 'reasons to believe' that income has escaped assessment 9. Krishna Developers And Co Vs DCIT (2018-TIQL-51-SC-IT) where Hon'ble Supreme Court held that reopening on the basis of very same reasons on which the AO initially desired to make additions but had failed, was justified, if the original assessment was declared as invalid as having been completed without service of notice o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e-opening notice was justified 13. Yogendrakumar Gupta Vs ITO (51 taxmann.com 383) (SC)/[2014] 227 Taxman 374 (SC) where Hon'ble Supreme Court held that where subsequent to completion of original assessment, Assessing Officer, on basis of search carried out in case of another person, came to know that loan transactions of assessee with a finance company were bogus as said company was engaged in providing accommodation entries, it being a fresh information, he was justified in initiating reassessment proceeding in case of assessee. 14. Raymond Woollen Mills Ltd. v. ITO And Others [236 ITR 34] where Hon'ble Supreme Court held that in determining whether commencement of reassessment proceedings was valid it has only to be seen whether there was prima facie some material on the basis of which the department could reopen the case. The sufficiency or correctness of the material is not a thing to be considered at this stage 15. R.K. Malhotra ITO Vs Kasturbhai Lalbhai [1977] 109 ITR 537 (SC) where Hon'ble Supreme Court held that the intimation which the Income-tax Officer received from the audit department would constitute "information" within the meaning of section 147(b). 16. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f sale of teakwood and, thus, disclosed unaccounted income, in view of fact that income for earlier year under consideration was from similar source, reopening of assessment was justified. 23. Dr Chhanqur Rai Vs CIT (2017-TIOL-660-HC-ALL-IT) where Hon'ble Allahabad High Court held that non-disclosure of corresponding income by the assessee so as to prove the source of investment in residential property, is sufficient for belief of escaped assessment. 24. Amsa India Pvt Ltd Vs CIT (2017-TIOL-603-HC-DEL-IT) where Hon'ble Delhi High Court held that the department can reassess the returns furnished by the assessee if the AO has a reason to believe that the facts have a proximate link with the assessee's concealed income." 6. So far as the merit of the case is concerned, the ld. DR submitted that the assessee did not appear before the Assessing Officer and never filed any details to explain the source of such heavy cash deposits. Before the CIT(A), the assessee never made any application under Rule 46A for admission of such additional evidences. Therefore, at this juncture, the assessee cannot take the plea that the deposits are out of sale of agricultural land. He accordingly ..... X X X X Extracts X X X X X X X X Extracts X X X X
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