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TMI Blog2020 (9) TMI 958X X X X Extracts X X X X X X X X Extracts X X X X ..... peal: "4. That the sanction for issue of notice u/s 148 of the I.T. Act given by the Joint Commissioner of Income-Tax, Range-4, Jaipur was without application of mind, and given in a mechanical manner. Hence, the reassessment proceedings initiated without proper and valid sanction are invalid and bad in the eyes of law. 5. That the reopening of the assessment by issue of notice u/s 147/148 was bad in law as there was no reason to believe that income chargeable to tax had escaped assessment." 3. It was submitted that these two additional grounds of appeal goes to the root of the matter, and question the very assumption of jurisdiction u/s 148 of the Act and accordingly the same may kindly be accepted and adjudicated on merits. The ld DR is heard who has objected to admission of these additional grounds of appeal and submitted that the assessee has not taken these grounds of appeal before the ld CIT(A) and therefore, at this stage of the appellate proceedings, the assessee should not be permitted to raise these grounds of appeal. 4. Heard both the parties. We find that these two grounds of appeal though not taken before the ld CIT(A) are legal grounds of appeal and the same can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... record. In this case, we find that the notice u/s 148 was issued to the assessee on 22.03.2017 and in response to the said notice, the assessee filed her return of income on 17.04.2017. Thereafter, notices under section 143(2) and section 142(1) were issued and the ld A/R on behalf of the assessee attended to the proceedings and filed written submissions. There is nothing on record and which has been brought to our notice that in the entire assessment proceedings, the assessee objected to the issuance of notice u/s 148 and has sought copy of the reasons so recorded for the reopening the assessment proceedings. Therefore, we find that there is no prejudice which is caused to the assessee in terms of denial of any opportunity to the assessee to object to the reassessment proceedings by non-supply of the reasons so recorded by the AO where the same were never asked for by the assessee at first place. There is thus no violation of the directives of Hon'ble Supreme Court as laid down in the case of GKN Driveshaft reported in 259 ITR 19 wherein it was held that recorded reasons must be furnished to the assessee when the assessee sought for the said reasons. The decision of the Hon'ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion in case of CIT vs. S. Goyanka Lime & Chemicals Ltd. [2015] 231 Taxman 73 (MP). 11. Per contra, the ld. DR submitted that the Assessing Officer has submitted a proposal for initiating action u/s 147 to the JCIT, Range-04, Jaipur on 14.03.2017 and after examining the proposal along with report of the ITO (I & CI)-II, Jaipur along with details/documents furnished by the assessee before the ITO (I & CI)-II, Jaipur, she had recorded her satisfaction and accorded her approval on 15.03.2017 which is evident from the assessment records. It was accordingly submitted that the ground so taken by the assessee that the sanction has been granted by the JCIT without application of mind and in a mechanical manner is not factually correct and therefore, the same should be dismissed. 12. In Ground No. 5, the assessee has challenged the action of the Assessing Officer that the reopening of the assessment by issuance of notice u/s 147/148 was bad in law as there was no reason to believe that income chargeable to tax had escaped assessment. It was submitted that the reasons so recorded by the Assessing Officer are based totally on the information passed on to the Assessing Officer by the ITO ( I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elieve that income has escaped assessment. It was further submitted that the assessee knew that the Assessing Officer had sufficient reasons for initiating proceedings u/s 147 which is why she had changed her stand during the assessment proceedings from the stand taken before the ITO (I & CI)-II, Jaipur. Before the ITO (I & CI)-II, Jaipur, she had stated that investments were made from her savings and pin money of more than thirty years and later on, during the assessment proceedings, she stated that the investments were made out of savings, pin money and borrowings. Therefore, the assessee's ground of appeal that there is no reason to believe that income has escaped assessment is without merits and same may kindly be dismissed. She accordingly supported the findings of the lower authorities. 14. We have heard the rival contentions and perused the material available on record. In the present case, the reasons recorded by the Assessing officer before issuance of notice u/s 148 read as under:- "The assessee filed her return of Income declaring income of Rs. 1,92,870/- on 22.02.2014. The case was processed/assessed u/s 143(1). In this case, the ITO (I & CI)-II, Jaipur has carrie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... property to the tune of Rs. 15,40,892/-, a fact which is not denied by the assessee and where the response of the assessee is generic in the sense that she is an income tax assessee for more than ten years (without specifying the quantum of income so disclosed) and has reported a meager income to the tune of Rs. 1,92,870/- in her return of income for the impugned assessment year, and investment was made out of her past savings and pin money instead of specifically identifying the source of such investment and more so, the availability of funds at the relevant point in time of making the investment, we find that the source of such investment is clearly not satisfactorily explained to the satisfaction of the AO and he is well within his right to prima facie hold that source of such investment to the tune of Rs. 15,40,892/- remain unexplained and consequently, the income to that extent has escaped investment. We therefore donot see any infirmity in the action of the AO in acquiring jurisdiction u/s 147 by issuance of notice u/s 148 of the Act as the initial satisfaction about the escapement of income, has been rightly recorded by the AO. Further, under section 151, it requires the sat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... awals of Rs. 1,84,000/- and cash accrual from business of Rs. 92,170/-, less drawings of Rs. 95,000/-, and the assessee had cash at hand of Rs. 10,19,481/-, enough to explain the cash paid towards the purchase of land. The generation of cash in hand has been explained in detail at page 6, 7 & 8 of the impugned appellate Order. The ld CIT(A) has indeed accepted in her order that the assessee had cash in hand with her, but has restricted it to Rs. 2,00,000/- or Rs. 20,000/- per annum, for a period of 10 years. There is nothing in the order to back the estimate made by the CIT(A) and the period chosen by her. She has also not rebutted the claim of the assessee that she is keeping with her, cash given to her by her husband Shri Ram Swaroop Khandelwal, a retd. Govt. Servant, and her two sons, Avinash who is a CA, and Ravi who is a businessman. The order of the ld CIT(A) is based on surmises and estimates and therefore, needs to be rejected. At the point of repetition, it may be stated that the assessee has given detailed account of the generation of cash in hand with her, and, unless the department is able to disprove it with evidence, it has to be accepted. In any case, the CIT(A) cann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e clearly verifiable from the bank statements. However, where the assessee is working out the availability of cash at the start and close of the financial year, such availability is of physical cash in hand and not the cash accrual from business which is not yet realized. Therefore, as far as entries pertaining to cash accruals in respective financial years are concerned, the same needs to be excluded as the effect of the same would be automatically taken in subsequent bank/cash deposits. Subject to such exclusion, we find that the cash summary for the last four years provides a reasonable basis for arriving at the opening cash in hand at the start of the financial year and the explanation of the assessee to that extent therefore found is satisfactory. The matter is accordingly set-aside to the file of the AO for the limited purpose of determination of opening cash in hand after exclusion of entries in respect of cash accruals in the respective financial years and the AO is hereby directed to grant relief to the assessee to the extent of opening cash in hand so worked out by him at the start of the impugned financial year. In the result, the ground is disposed off in light of afor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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