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TMI Blog2020 (5) TMI 574X X X X Extracts X X X X X X X X Extracts X X X X ..... or re-assessment. The re-assessment proceedings in this case were only based on presumption/ suspicion and were thus not validly initiated. 2. Action u/s 148 on the basis of cash deposit in Saving Bank Account :- That on the facts and in the circumstances of the case Ld. CIT(A) II has grossly erred in law and facts by confirming recording reasons and issuing notice u/s 148 on the basis of cash deposit Rs. 2,97,000/- in bank account for which source is found unverifiable. 3. Re-assessment is based on borrowed satisfaction :- That on the facts and in the circumstances of the case Ld. CIT(A) II has grossly erred in law and facts by confirming issuing notice u/s 148 on the basis of AIR information in respect of cash deposit in bank accounts and without verifying the correctness of the information and therefore re- assessment proceeding is absolutely bad in law and without jurisdiction and further AO not recorded his satisfaction and reassessment is based on borrowed satisfaction which was not sufficient to confer power on the AO to initiate reassessment proceedings against the assessee. 4. Objection Not Disposed by Order :- That on the facts and in the circumstances of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quariums and allied products and has originally filed his return of income on 30.07.2011 wherein the assessee has disclosed his gross income from business amounting to Rs. 1,74,510/-. It was submitted that for the assumption of jurisdiction U/s 147 of the Act, the AO should have reasons to believe and not made suspicion that the income has escaped assessment. In this regard, our reference was drawn to the reasons recorded by the Assessing Officer which reads as under:- "The assessee has filed his return of income for year under consideration on 30.07.2011 declaring total income of Rs. 1,06,440/-. The ITO Investigation, Jaipur conducted enquiry in this case. It is gathered that the assessee has deposited cash in his bank account amounting to Rs. 2,97,000/- source of which was found unverifiable. In view of the above and on the basis of material available on record, I have reason to believe that income of Rs. 2,97,000/- has escaped assessment within the meaning of section 147 of the IT Act 1961." 6. It was submitted by the ld AR that the reassessment has been initiated for verification of cash deposit in the bank account of the assessee. It was submitted that there is no material ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nvestigation Wing constitute a tangible material and after considering the same where the AO formed a belief that the income has escaped assessment, the reopening cannot be quashed. Regarding the contention so advance by the ld. AR regarding borrowed satisfaction, it was submitted that the AO has duly recorded his satisfaction in the instant case and therefore, the contention so advance by the assessee cannot be accepted. Regarding non disposal of objections raised by the assessee against the reasons recorded by the AO, it was submitted that it is a mere technicality which cannot be fatal in terms of making the whole proceeding as bad in law. In support, reliance was placed on the decision of Hon'ble Madras High Court in case of Home Finders Housing limited vs ITO and the SLP against the said decision has been dismissed by the Hon'ble Supreme Court as reported in 94 Taxamann.com 84. 8. We have heard the rival contentions and perused the material available on record. In this case, notice U/s 148 of the Act was issued by the Assessing officer on 03.03.2017 which was duly served on the assessee on 04.03.2017. In response, the assessee submitted that return of income filed by the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for its assessment and that the reopening of assessment has been occasioned by change in opinion, which is impermissible. The assessee has deposited cash in bank account amounting to Rs. 2,97,000/. Source of which was sale proceeds of 22 Kt plain gold jewellery amounting of Rs. 3,49,000/-. The source of bank deposited is verifiable and fully explained. In view above facts your honour is requested to drop reassessment proceeding and decide objection by speaking order." 9. We therefore find that the undisputed facts which are emerging from the records are that in response to notice u/s 148, the assessee filed his return of income, the reasons were requested to be supplied to him which were duly supplied by the Assessing officer and thereafter, the assessee filed his objections on 24.08.2017 to the said reasons giving detail justification of source of cash deposits in his bank account. On the same date, the notice U/s 143(2) was issued and the matter was fixed for hearing on 12.09.2017, thereafter after consideration of the submissions of the assessee, the assessment was completed U/s 143(3) r.w.s. 147 of the Act vide order dated 22.12.2017. Further, from perusal of the recor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... months and he will get extended time of limitation which is not the object of the Income Tax Act. When the Court has already fixed the period, it is to be construed in a very strict sense and has to be applied. 4.1 In support of his contention, he has relied upon the following decisions: 1. KSS Petron Private ltd. vs. ACIT, ITA No. 227/2014, 03.10.2016 holding as under:- "7. On further Appeal, the Tribunal passed the impugned order. By the impugned order it held that the Assessing Officer was not justified in finalizing the Assessment, without having first disposed of the objections of the appellant. This impugned order holds the Assessing Officer is obliged to do in terms of the Apex Court's decision in GKN Driveshafts (India) Ltd., v/s ITO 259 ITR 19. In the aforesaid circumstances, the order of the CIT(A) and the Assessing Officer were quashed and set aside. However, after having set aside the orders, it restored the Assessment to the Assessing Officer to pass fresh order after disposing of the objections to reopening notice dated 28th March, 2008, in accordance with law. 8. We note that once the impugned order finds the Assessment Order is without jurisdiction as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in the matter, the Tribunal ought not to have remitted back for reassessment since period of limitation has already expired as the authority will get extended time of limitation beyond 9 months which is not the object of Income Tax Act. 9. In that view of the matter, on issue No. 1 and 2, the order of reassessment passed by the Tribunal is declared null and void. The questions are answered in favour of assessee and against the Department. 10. The appeal of the assessee is allowed." 10. We find that in the aforesaid decision, the Hon'ble High Court has considered the decision of Hon'ble Madras High Court in case of Home Finders Housing limited vs ITO(supra) as relied upon by the ld DR and has followed the decision of the Hon'ble Supreme Court in case of KSS Petron Private ltd. vs. ACIT (supra). In light of above and respectfully following the decision of the Hon'ble Jurisdictional High Court which is binding on this Tribunal, the reassessment proceedings completed without disposing off the objection raised by the assessee cannot be sustained and consequent reassessment order u/s 147 r/w 143(3) is hereby quashed and set aside. 11. Therefore, the other contentions advanced ..... X X X X Extracts X X X X X X X X Extracts X X X X
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