TMI Blog2019 (5) TMI 1597X X X X Extracts X X X X X X X X Extracts X X X X ..... d, relevant material to form even prime facie belief that there was alleged payment is also apparent from the fact that the alleged document found and seized during the course of search/survey action u/s 132/133A does not reflect any figure and in the absence of any independent enquiry or examination of facts on record or noticing the content of alleged documents in the reasons recorded and, reasons being silent as to the specific facts, the vague allegation shows that action has been taken mechanically on the basis of alleged report of investigation wing, and, not on independent application of mind and therefore on this ground too, the proceedings are without jurisdiction. It is also noted that there is no live link or direct nexus between alleged material and, inference. It is a case of investigation in the garb of action u/s 148 on the basis that proceedings have been initiated on the basis of no material much less any tangible and, relevant material and as such reasons record do not constitute valid reason to believe for initiating proceedings u/s 147. Therefore, respectfully following the findings of the Co-ordinate Benches SHRI SHIV CHARAN GOEL VERSUS ITO [ 2018 (6) TMI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the assessee has paid donation of ₹ 12 lacs in cash 16.50 lacs through DD and 1.62 lacs in cash. And accordingly treated the amount of ₹ 30.12 lacs as unexplained made out of undisclosed sources and added the same to the income of the assessee. 6. The assessee strongly agitated the matter before the CIT (A) but the CIT(A) was convinced with the findings of the A.O and dismissed the appeal. 7. Before me, the Counsel for the assessee vehemently stated that the A.O without making any enquiry/investigation has simply borrowed the information given by the Investigation Wing without applying his own mind before the issue of notice u/s 148 of the Act. It is the say of the Counsel that the total tuition fees for the first year was only ₹ 4 lacs and the complete fee of four and half years course was ₹ 18 lacs. Therefore, the claim of the A.O that the assessee has paid ₹ 30.12 lacs is in correct and, therefore, not only the reopening should be quashed but the addition made should also be deleted. Per contra, the DR strongly supported the findings of the A.O and read the operative part of the order of the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Demand Draft should be drawn in favour of Maharaji Educational Trust payable at Ghaziabad. This certificate is issued exclusively to enable the student to obtain financial assistance from Bank/Financial Institution. The fee is subject to revision in the forthcoming years. Sd/- For Maharaji Education Trust Accountant 9. A perusal of the aforementioned certificate shows that the tuition fees for the first year is ₹ 4 lacs and the total tuition fees for the entire course of four and half years is 18 lacs. I find that neither the A.O nor the CIT(A) has made any enquiry from the Institution regarding this certificate. 10. There is no dispute that the A.O has simply borrowed the information received from DDIT, Investigation. The reasons recorded for reopening the assessment read as under:- Reasons for the belief that income has escaped assessment. An information has been received from DDI (1.pv.) Unit-5(1), New Delhi that Sh. Ratan Pal Kein, has paid donation of ₹ 12,00,000/- in cash, ₹ 16,50,000/- through DD and ₹ 1,62,000/- in cash against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing Officer should have invoked the provisions of section 153C of the Act and not section 148 of the Act. For this he relied upon the decision of Co-ordinate Bench in Rajat S. Chhaterji Vs. ACIT in ITA. No. 2430 (Del) of 2015 [order dated 20.05.2016]; (iv) On the merits of the case he submitted that assessee has not paid any money other than ₹ 15 lakhs to the institute and, therefore, in absence of any evidence, addition cannot be made; (v) He further submitted that no cross examination of the person whose statement was recorded was given to the assessee and in absence of cross examination when assessee specifically denied such payment no addition can be made in the hands of the assessee. 7.1 In the end, he submitted that re-opening is invalid and further the addition on the merit also cannot be sustained. 8. The learned Departmental Representative contested the arguments of the learned authorized representative and submitted that there is a definite information received by the Assessing Officer in the letter that assessee has paid ₹ 70 lakhs for the admission of his son. The learned Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e above information I am satisfied that the fee paid of ₹ 70,00,000/- in cash is assessee's own unexplained income from undisclosed sources and liable to be assessed in the hands of the assessee. Therefore, I have reason to believe that unexplained cash paid towards fee is chargeable to tax and the same has escaped assessment for the year under consideration and is a fit case for reopening u/s 148 of I.T. Act. The proposal for obtaining kind approval of the competent authority; to initiate proceedings u/s 147/148 is hereby put up for necessary approval. Submitted for further directions and approval please. Sd/- (Deepak Kumar ) Income Tax Officer Ward 56 (4), New Delhi. Whether the Addl. CIT, Range-56, N. Delhi satisfied on the reasons recorded by the AO that it is fit case for the issue of notice u/s. 148. Yes Sd/- 27/3/2015. Addl. Commissioner of Income Tax, Range-56, New Delhi. 9.1 On the same date the reasons were approved by the Addl. Commissioner of Income Tax, Range 56, New Delhi. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity with the records. With respect to the finding of the learned CIT (Appeals) that Addl. Director was in possession of adequate information so merely writing Yes fulfills the requirement of approval. We note that it is not the Addl. Director, who has approved the re-opening mechanically. Further such approval is also not in conformity with the decision of Hon'ble M.P. High Court. In view of the above facts, we reverse the finding of the lower authorities and set aside the assessment order passed by the learned Assessing Officer holding that re-opening under section 147 is not valid. 12. The Co-ordinate Bench in another case in ITA No. 1106/Del/2018 had the occasion to consider the appeal again on similar set of facts and once again decided the issue in favour of the assessee and against the Revenue. The relevant findings of the Co-ordinate Bench read as under:- 6. I have heard both the parties and carefully considered the same. I note that in this case the AO while recording the reasons for the belief that income has escaped assessment has recorded the reasons as under:- In this case, as per record the assessee has not fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not reflect any figure of ₹ 21 lacs and in the absence of any independent enquiry or examination of facts on record or noticing the content of alleged documents in the reasons recorded and, reasons being silent as to the specific facts, the vague allegation shows that action has been taken mechanically on the basis of alleged report of investigation wing, and, not on independent application of mind and therefore on this ground too, the proceedings are without jurisdiction. It is also noted that there is no live link or direct nexus between alleged material and, inference. It is a case of investigation in the garb of action u/s 148 of the Act on the basis that proceedings have been initiated on the basis of no material much less any tangible and, relevant material and as such reasons record do not constitute valid reason to believe for initiating proceedings u/s 147 of the Act. In this regard, I draw support from the decision of the Hon'ble Supreme Court 320 ITR 561 (SC) CIT vs Kelvinator of India Ltd. It is further noted that initiation of proceedings is also based on non application of mind much less independent application of mind but is a case of borrowed satisfaction. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the income of the Assessee escaped assessment is missing in the present case. ii) 395 ITR 677 (Del) Pr. CIT v. Meenakshi Overseas (P) Ltd. v. ITO 36. In the present case, as already noticed, the reasons to believe contain not the reasons but the conclusions of the AO one after the other. There is no independent application of mind by the AO to the tangible material which forms the basis of the reasons to believe that income has escaped assessment. The conclusions of the AO are at best a reproduction of the conclusion in the investigation report. Indeed it is a 'borrowed satisfaction'. The reasons fail to demonstrate the link between the tangible material and the formation of the reason to believe that income has escaped assessment. 37. For the aforementioned reasons, the Court is satisfied that in the facts and circumstances of the case, no error has been committed by the ITAT in the impugned order in concluding that the initiation of the proceedings under Section 147/148 of the Act to reopen the assessments for the AYs in question does not satisfy the requirement of law. 38. The question fram ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sfied that no error was committed by the ITAT in holding that reopening of the assessment under Section 147 of the Act was bad in law. 6.2 Keeping in view of the facts and circumstances of the case as explained above and respectfully following the precedents, as aforesaid, the proceedings initiated by invoking the provisions of section 147 of the Act by the AO and upheld by the Ld. CIT(A) are nonest in law and without jurisdiction, hence, the assessment is quashed. Since I have already quashed the assessment, the other grounds have become academic and are therefore not adjudicated and accordingly, the assessee's appeal is allowed. 13. The facts of the case in hand are identical to the facts considered by the Co-ordinate Benches (supra). Therefore, respectfully following the findings of the Co-ordinate Benches, I am of the considered view that the proceedings initiated by invoking provisions of Section 147 of the Act are non east of law and without jurisdiction. Hence, the assessment is quashed. Since, the assessment order has been quashed by me. I do no find it necessary to well into merits of the case. Appeal filed by the assessee is acco ..... X X X X Extracts X X X X X X X X Extracts X X X X
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