TMI Blog2020 (2) TMI 82X X X X Extracts X X X X X X X X Extracts X X X X ..... ceipt. A.O. has recorded incorrect and wrong reasons for reopening of the assessment and did not apply his mind to the facts of the case before recording reasons for reopening of the assessment. The A.O. has also failed to verify the information received from the Investigation Wing before recording the reasons for reopening of the assessment. Even the sanctioning authority has not applied its mind to the conclusion drawn by the A.O. based on specific material on record which clearly revealed that reasons recorded by the A.O. are wrong, incorrect and based on no evidence. It is, therefore, clear case of non-application of mind by the A.O. before recording reasons for reopening of the assessment. We are of the view that reopening of the assessment is illegal and bad in Law and is liable to be quashed. We, accordingly, set aside the Orders of the authorities below and quash the reopening of the assessment. Resultantly, all additions stand deleted. - Decided in favour of assessee. - ITA.Nos.4251 & 4252/Del./2018 - - - Dated:- 30-1-2020 - Shri Bhavnesh Saini, Judicial Member And Shri O.P. Kant, Accountant Member For the Assessee : Shri R.S. Singhvi, C.A. And Shri Satya ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Dated 08.06.2005 with Shri Gurdev Singh for property No.493, E-Block, Greater Kailash-II, New Delhi, for a sum of ₹ 48 lakhs and Agreement Dated 13.09.2005 with Shri Nilamber Rudrapal for property No.1481, C.R. Park, New Delhi, for an amount of ₹ 46 lakhs, totaling to ₹ 94 lakhs. The A.O. completed the re-assessment vide order dated 19.03.2014. 5. The assessee challenged the said additions before the Ld. CIT(A), on which, remand report was also called for. The Ld. CIT(A) allowed the appeal of assessee partly. Both these additions were confirmed, but, A.O. was directed to grant relief with regard to cheques that have returned after making due verification. The assessee in the present appeal has challenged the initiation of the re-assessment proceedings and both the above additions. 6. The appeal of assessee is time barred by 08 days. Learned Counsel for the Assessee submitted that this case was handled by Shri Avinash Kumar Alok, C.A. who represented the case before the authorities below. Since, he did not handled the case property, therefore, the assessee had to change the Counsel, which took some time in between. Therefore, the nominal delay m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orded incorrect and wrong reasons for reopening of the assessment. The Learned Counsel for the Assessee, in support of his contention, relied upon the Order of ITAT, FBench, New Delhi in the case of Shri Pankaj Sapra, New Delhi vs., ITO, Ward-23(2), New Delhi in ITA.No.5747/Del./ 2018 vide Order Dated 22.11.2019, in which, on identical facts, the reopening of the assessment have been quashed. He has also relied upon Judgment of Hon ble Delhi High Court in the case of Pr. CIT vs., RMG Polyvinyl (I) Ltd., [2017] 396 ITR 5 (Del.) in which it was held as under : Where information was received from investigation wing that assessee was beneficiary of accommodation entries but no further inquiry was undertaken by Assessing Officer, said information could not be said to be tangible material per se and, thus, reassessment on said basis was not justified. 7.2. He has also relied upon Order of ITAT, Delhi SMC-Bench, Delhi in the case of Shri Tajendra Kumar Ghai, New Delhi vs., ITO-1(5), Rudrapur in ITA.Nos.970, 917/ Del./2017, Dated 07.06.2017 in which it was held that the deposit in the bank account per se cannot be income of the assessee. It was a mere suspicion of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovisions of the Income tax Act 1961. In view of the above mentioned facts, I have reason to belief that income to the tune of ₹ 37670090/- has escaped assessment within the meaning of Section 147 of the Income Tax Act, 1961. Accordingly, necessary permission / approval under section 151(2) of the Income Tax Act, 1961 may kindly be accorded for issuance of notice u/s 148 of the Income Tax Act for A.Y. 2006-07. Sd/-Umesh Kumar Income Tax Officer, Ward-23(2), New Delhi. 9.1. The Hon ble Punjab Haryana High Court in the case of CIT vs., Atlas Cycle Industries [1989] 180 ITR 319 (P H) held as under : Held, (i) that the Tribunal was right in cancelling the reassessment as both the grounds on which the reassessment notice was issued were not found to exist, and, therefore, the Income-tax Officer did not get jurisdiction to make the Re-assessment. 9.2. The Hon ble Delhi High Court in the case of Pr. CIT vs., SNG Developers Ltd., [2018] 404 ITR 312 (Del.) in which it was held as under : Held, dismissing the appeal, that the reasons recorded by the Assessing Officer for reopening the assessment under section 147, issuing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee had filed regular returns, had sufficient opening balance in his account and the withdrawals therefrom substantiated the donation made. Therefore, the reopening of the assessment was unsustainable in law and the notice issued under section 147 of the Act was to be quashed. 9.4. The Hon ble Bombay High Court in the case of Siemens Information Systems Ltd., vs., ACIT Others [2007] 293 ITR 548 (Bom.) held as under : The petitioner had several EOU/STP units engaged in the business of export of software. In response to the notice for reopening the assessment for the assessment year 1999-2000, the petitioner, objecting to the issuance of the notice, stated that the reasons furnished by the authority had quoted the provisions of section 10A as amended by the Finance Act, 2000, with effect from the assessment year 2001-02 and as such could not have been made applicable to the assessment year 1999-2000 and the notice had been issued under the mistaken belief about the correct position of law. However, opportunity to show cause was given to the petitioner as to why the loss claimed should not be disallowed to be carried forward. On a writ petition : Held, allow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther the deposits in the bank accounts are fully explained and therefore no addition is called for. 9. I find force in the above arguments advanced by the learned counsel for the assessee. A perusal of the notice issued under section 148 shows that the notice has been issued in a very casual manner, Clause 3 of the notice reads as under :- Notice under section 148 of the Income Tax Act, 1961. 3. This notice is being issued after obtaining the necessary satisfaction of the commissioner of Income Tax /the Central Board of Direct Taxes. 10. Similarly, a perusal of the bank account maintained with Vijaya Bank account no. 004427, copy of which has been placed at page no. 25 and 26 of the paper book, shows that an amount of ₹ 2,50,000/- was by way of clearing of Cheque No.719443 and not cash deposit. If the same is excluded from the total deposits made during the year from the two bank accounts then there is no such cash deposit of ₹ 4,97,452/ - in the two bank accounts maintained by the assessee. Therefore, I find force in the argument of learned counsel for the assessee that the reasons recorded are either vague reasons or not based on IT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sited in the bank accounts of the assessee. In these circumstances, it was the duty of the A.O. to verify the facts before coming to the conclusion that there is escapement of income on account of cash deposited in the bank account of the assessee. The A.O. even did not verify the information received from Investigation Wing and did not even obey the directions of the Investigation Wing. It is well settled Law that mere cash deposited in the bank account of the assessee per se would not disclose escapement of the income as is held by the ITAT in the case of Shri Tejendra Kumar Ghai, New Delhi vs., ITO 1(5), Rudrapur (supra) and Shri Abrar Ahmad Qasimi, New Dekhi vs., ITO, Ward- 46(5), New Delhi in ITA.No.3177/Del./2017, Dated 01.06.2018. The assessee further explained that there is no unaccounted investment in the properties because the deal of ₹ 48 lakhs pertain to sale of the property by assessee which is supported by the Sale Deed and such property was purchased by the assessee way back in 1996. Thus, the sale could not be an unexplained investment in the case of the assessee. In respect of other property, assessee has made Collaboration Agreement with Shri Nilambar Rudr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... material on record, we are of the view that reopening of the assessment is illegal and bad in Law and is liable to be quashed. We, accordingly, set aside the Orders of the authorities below and quash the reopening of the assessment. Resultantly, all additions stand deleted. 10. In the result, appeal of the Assessee for the A.Y. 2006-2007 is allowed. Assessment Year 2007-2008 : 11. In this appeal, the assessee has similarly challenged the reopening of the assessment and addition of ₹ 86,86,537/- on account of unexplained cash deposit in the bank account of the assessee. 12. The assessee has filed copy of the reasons at page No.4 of the PB which is similarly worded as is noted in the A.Y. 2006-2007. PB-6 is Annexure-C supplied by the Investigation Wing in which similar advice have been given to the A.O. to verify the facts. PB-8 is summary of the cash deposited by assessee in the bank accounts to show that actual deposit was of ₹ 20,16,000/- only. 13. Learned Representatives of both the parties submitted that the issue is same as have been considered in A.Y. 2006-2007. 14. This appeal is also time barred by 08 days. Following the rea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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