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TMI Blog2020 (2) TMI 1142X X X X Extracts X X X X X X X X Extracts X X X X ..... red in law and on facts in confirming the action of Ld. AO in framing impugned reassessment order and that too without assuming jurisdiction as per law and without complying the mandatory conditions of section 147 to 151 of the Act. 2. That in any case and in any view of the matter, action of Ld. CIT(A) in confirming the action of Ld. AO in framing impugned reassessment order u/s 147/143(3) is beyond jurisdiction, bad in law and against the facts and circumstances of the case. 3. In any view of the matter and in any case, impugned assessment order could not have been passed under the law, more so when original assessment was annulled. 4. That the cross objector craves the leave to add, amend, modify, delete any of the ground(s) of cross objection before or at the time of hearing. 5. The roots for the quarrel lie in the assessment order dated 23.12.2011 framed u/s 143(3) r.w.s. 153C of the Act which is placed at Pages 13 to 20 of the Paper Book. 6. The cause for framing the assessment order was a search and seizure operation u/s 132 of the Act and the survey taken u/s 133A of the Act undertaken at various residential and business premises of Aseem Kumar Gupta & Group. 7. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l)-II, has not adjudicated the ground on which the additions were made. Though, the assessee challenged the additions but not submissions were filed before the Ld CIT(Central)-II, New Delhi as to why additions be deleted. In view of the fact, whereas no submission is made by the assessee in respect of the merits on which additions were made, it clearly shows that the assessee had nothing to say on these grounds. However, after perusal of the assessment records of the case following issues are found- A) Expenditure of Rs. 1,05,654/- is required to be disallowed (except the statutory and obligatory expenses of ROC filing Fee & Audit Fees) as the assessee hasn't submitted any evidence to support its claim of expenditures and establish its business purpose. Hence, sum to the tune of Rs. 1,05,654/- has escaped assessment. B) From the perusal of the bank statement it was noticed that there are some cash deposits in the bank accounts of the assessee for which no explanation and/or evidence has been filed to explain their source and to establish their source. Hence, sum to the tune of Rs. 11,000/- is required to be treated as unexplained cash deposit, which has escaped assessment. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e shall be issued under section 148 by an Assessing Officer, who is below the rank of Assistant Commissioner or Deputy Commissioner, unless the Joint Commissioner is satisfied on the reasons recorded by such Assessing Officer that it is a fit case for the issue of such notice: Provided that, after the expiry of four years from the end of the relevant assessment year, no such notice shall be issued unless the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner is satisfied, on the reasons recorded by the Assessing Officer aforesaid, that it is a fit case for the issue of such notice." 11. The reasons for belief if read with the provision of section 151(1) of the Act clearly show that there is no application of mind by the AO nor there is any application of mind by the sanctioning authority. The approval accorded to initiate proceedings is as under: 11. Whether the Additional Commissioner of income Tax, Central range-4, New Delhi is satisfied on the reasons recorded by the ACIT, Central Circle-09, New Delhi that it is a fit case for the issue of a notice under section 148 Based on reasons recorded above, I am satisfied that it is a fit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is set aside." 14. The Hon'ble High Court of Rajasthan in the case of M/s. Rameshwar Prasad Sharma in ITA No.642/2011 dated 04.09.2017 at the occasion to consider inter alia the following substantial question of law. "1. Whether the tribunal was legally justified in reversing the finding of CIT(A) and annulling the reassessment u/s 147 which was done on the basis of material found during the course of survey and not on the basis of annulled assessment u/s 143(3)?" 15. Hon'ble High Court held as under : "11. Against this order, the assessee preferred appeal before ld. CIT(A). The proceedings initiated u/s 148 were also challenged. The ld. CIT(A) uphold the reopening of the assessment. However, appeal of the assessee on merit was allowed in part as certain additions were sustained i.e. trading addition by applying n.p. rate at 10.5% confirming the addition of Rs. 3,25,000/- in the name of Sh. S.K. Upadhyay and not treating the interest on fixed deposit income as business income. The remaining additions were deleted by ld. CIT(A). 12. The department is in appeal against deleting the additions by ld. CIT(A) and assessee is challenging confirming the reopening the assessment and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eopening of the assessment. Thee must be some fresh material or new information which authorizes the AO to issue notice u/s 148. There are so many cases when return had been filed by the respective assessee has been accepted u/s 143(1) on the same material. No notice u/s 148 can be issued as held by various courts. There must be reason to believe and there must be some material before AO to hold that any part of income has escaped assessment. 15. In the present case there was no fresh material at all. The material which was available before the AO was only original assessment order which was annulled. Once an assessment has been annulled then department cannot adopt a recourse to corret their mistake committed originally not issuing notice u/s 143(2) in time. 23. Again such facts are not in the case in hand as the reason were recorded on the basis of annulled assessment only. Therefore, the ratio of this decision is also not applicable on the facts of the present case. 24. Few more cases on which reliance has been placed by ld. D/R i.e. in case of Raymond Woollen Mills Ltd. Vs. ITO 236 ITR 34 (SC), Claggat Brachi Co. Ltd. Vs. CIT 177 ITR 409 (SC) and Kalyan Mavji and Co. Vs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed assessment to tax but to circumvent the time-barred assessment. Thus, the reassessment proceeding under Section 147 amounts to extending the limitation which the AO is not empowered to. It is trite law that limitation period under Section 143 cannot be extended by an IT authority and it is also quite recognised principle of law that an act, which cannot be done by an authority directly, cannot be done indirectly by him. Fact that the return was pending for disposal cannot constitute a valid reason for reopening the assessment, even under the amended s. 147. Though s. 147, after the amendment, has widened the powers of the AO to reopen the assessment, still there is intrinsic evidence in the section itself to show that cases where returns validly filed have not been disposed of, have not been brought under the net of the section. This is dear from Expln. 2(b) which says that for the purpose of the section, a case where a return of income has been furnished by the assessee, but no assessment has been made, is to be deemed as a case where income chargeable to tax has escaped assessment, but only if it is noticed by the AO that the assessee has understated the income or claimed exce ..... X X X X Extracts X X X X X X X X Extracts X X X X
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