TMI Blog2020 (10) TMI 1185X X X X Extracts X X X X X X X X Extracts X X X X ..... section 148 - Only a reply to notice issued by the AO dated 30.09.2016 and not the objections against the notice issued under section 148 dated 30.03.2016. Even otherwise, this letter was filed by the assessee at the fag end of the assessment proceedings as the assessment order was finally passed on 3rd November, 2016. Therefore, this letter cannot be considered as an objection against the notice issued under section 148 of the Act. Hence in the absence of any objection raised by the assessee, there is no question of disposal of the same by the AO. Accordingly, there is no merit or substance in ground no. 2 of the assessee s appeal. Addition on account of On Money paid by the assessee - addition made on the basis of the statement of 3rd party - HELD THAT:- A/R has given an evasive reply that those were not given to the assessee by the society. Thus in the absence of any contrary material, the facts brought on record by the AO which were duly supported and established by the seized material as well as the facts explained by Shri Madan Mohan Gupta in his statement cannot be disputed. Assessee has not produced any documentary evidence to controvert the seized material and st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t bearing no. 167 measuring 200 sq. yards. In response to the notice issued under section 148, the assessee filed her return of income on 19th May, 2016 declaring total income of ₹ 1,53,460/-. The AO while completing the assessment under section 143(3) read with section 147 of the IT Act has made an addition of ₹ 4,00,000/- on account of On Money paid by the assessee against the allotment of the Plot @ ₹ 2000/- per sq. yard. The assessee challenged the action of the AO before the ld. CIT (A) and also challenged the reopening of the assessment. However, the ld. CIT (A) has upheld the validity of reopening and rejected the objection raised by the assessee. 3. Before us, the ld. A/R of the assessee has submitted that the AO has reopened the assessment on the basis of information received from the DCIT (Hqrs.) and, therefore, there was no application of mind to form the belief by the AO but he has acted on the basis of the information. The ld. A/R has further submitted that the notice under section 148 was issued by the ITO Ward-2, Bharatpur and thereafter the case was transferred to the jurisdiction of ITO Ward-3, Bharatpur. Thus the ITO Ward-2 Bharatpur was ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Seva Parishad. Thus he is the key person who has developed the Revenue Residency Scheme, carved out the plots. He has also acted as a person on behalf of the Rajasthan Tehsildar Seva Parishad to issue the plots to the members and also receive the payments. The payment was directly received by him from each member and not from the Rajasthan Tehsildar Seva Parishad. Only after the development of the Revenue Residency Scheme and allotment of the plots to the members, the society was formed by the allottees. Thus the ld. D/R has submitted that when the facts detected during the search and seizure action and were narrated in the information received by the AO are not in dispute to the extent of allotment of the plot to the assessee against the payment, the seized material containing the list of all the allottees and payment against each name which includes the On Money as well as the payment on record, then the said documentary evidence along with the statement of Shri Madan Mohan Gupta constituted a tangle material to form the belief that income assessable to tax has escaped assessment. At the stage of initiation of proceedings under section 148 what is required to form the prima ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upta has clearly explained each and every detail and chain of events in his statement regarding the payment of On Money and issuance of the receipts as well as allotment letters by him. Thus when the assessee has not disclosed even the payment made by her and shown in the receipt, then the said seized material disclosing the On Money payment and giving all the details of rate against which the plots were allotted by bifurcation of the On Money payment as well as payment shown in the record, prima facie lead to the belief that the income assessable to tax has escaped assessment. The ld. CIT (A) has decided this issue in para 4.3 and 4.4 as under :- 4.3 I have considered the order passed by the A.O. and submissions filed by the appellant. The function of the Assessing Officer is to administer the statute with solicitude for the public exchequer with an in-built idea of fairness to taxpayer (Asst. CIT v. Rajesh Jhaveri Stock Brokers (P.) Ltd. 291 ITR 500 (SC) In determining whether commencement of reassessment proceedings is valid, the court has only to see whether there is prima facie some material on the basis of which the Department opened the case. The sufficiency or correc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... son to believe' and not the establishment of escapement of income. Whether the materials would conclusively prove an escapement of income is not the concern at that stage. 2. IN THE HIGH COURT OF DELHI AT NEW DELHI SUBJECT: INCOME TAX ACT, 1961 ITA No. 342 of 2011 Reserved on: December 12, 2011 Date of Decision: February 15, 2012. COMMISSIONER OF INCOME TAX . Appellant Through : Mr. Deepak Chopra, Advocate VERSUS NOVA PROMOTERS FINLEASE (P) LTD .. Respondent Through Mr. C.S. Aggarwal, Sr. Advocate with Mr. Prakash Kumar and Mr. Arta Trana Panda, Advocates. CORAM: HON BLE MR. JUSTICE SANJIV KHANNA HON BLE MR. JUSTICE R.V. EASWAR, J. Relevant portion of the judgment is as under: This establishes the link between the material which was present before the Assessing Officer both at the time when reasons for reopening the assessment were recorded and when the reassessment proceedings were made. 3. HIGH COURT OF JUDICATURE AT ALLAHABAD Case:- WRIT TAX No.- 83 of 2014 Petitioner:- M/s Pankaj Hospital Ltd. Respondent:- Commissioner of Income Tax And Another A notice was issued to the assessee on 11 March 2013 under Section 148 and in response to the requ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reopening of the assessment. . The reopening of the assessment in the present case is under the provisions of Section 147(1). The Assessing Officer must have reason to believe that any income chargeable to tax has escaped assessment for the Assessment Year in question. The expression 'reason', as the Supreme Court in Assistant CIT Vs. Rajesh Jhaveri Stock Broker Pvt. Ltd.2 has held, means a cause or justification. If the Assessing Officer has a cause or justification to know or suppose that income had escaped assessment, he can be said to have reason to believe that income had escaped assessment. The Supreme Court has held that the expression cannot be read to mean that the Assessing Officer should have finally ascertained the fact by legal evidence or conclusion. At that stage what is required is 'reason to believe' and not the establishment of escapement of income. Whether the materials would conclusively prove an escapement of income is not the concern at that stage. Now, it is true that during the course of the assessment proceedings, the Assessing Officer had required the assessee to disclose information pertaining to the share applicants, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Officer was satisfied that the condition stipulated in the first proviso. To Section 147 was duly fulfilled. We, however, clarify that these observations are only for the purposes of determining as to whether the notice reopening the assessment proceedings is valid or otherwise. Undoubtedly, the Assessing Officer in the course of the reopening of the assessment will be at liberty to make an appropriate determination since these are all matters of fact which are to be decided in the course of assessment. In the circumstances, we find no illegality in the order of the Assessing Officer or in the notice issued under Section 148 read with Section 147. Taking an over view of the sequence of events, information and evidences before the A.O, there is no doubt that the information/ evidences in the possession of the A.O was credible enough. As is propounded by the Apex Court in the case of Assistant CIT Vs. Rajesh Jhaveri Stock Broker Pvt. Ltd and Jurisdictional Delhi High Court judgment in the case of COMMISSIONER OF INCOME TAX VERSUS NOVA PROMOTERS FINLEASE (P) LTD as cited above, the legal position is that at the stage of issuing the notice under Section 148 the merit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the assessment order, therefore, the order passed by the AO is not valid for want of deciding the objections of the assessee by a separate speaking order. 7. On the other hand, the ld. D/R has submitted that the letter dated 24th October, 2016 is not the objection filed by the assessee against the notice under section 148 but the assessee has filed the reply to the notice issued by the AO dated 30th September, 2016 seeking the explanation of the assessee on the seized material disclosing the payment of On Money of ₹ 4,00,000/- by the assessee. Therefore, the assessee has not raised any objection against the notice under section 148 of the IT Act. 8. We have considered the rival submissions and carefully perused the relevant record. The letter dated 24th October, 2016 filed by the assessee is in response to the notice issued by the AO dated 30.09.2016. The contents of the letter dated 24th October, 2016 are as under :- Thus it is clear that this is only a reply to notice issued by the AO dated 30.09.2016 and not the objections against the notice issued under section 148 dated 30.03.2016. Even otherwise, this letter was filed by the assessee at the fag end o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pt the On Money entry in the diary against each name, all other facts recorded are not in dispute. Therefore, the seized material cannot be accepted in part but the whole transactions recorded in the seized material are factually correct. He has relied upon the orders of the authorities below. 11. We have considered the rival submissions as well as the relevant material on record. The AO has reproduced the statements of Shri Madan Mohan Gupta which were recorded on 24th February, 2016 and 29th February, 2016. Thus it is clear that after the search and seizure and recording of statement under section 132(4), the statement of Shri Madan Mohan Gupta was also recorded by the Department in the month of February, 2016. In his statement Shri Madan Mohan Gupta again reaffirmed the facts recorded in the seized material as well as the statement given at the time of search and seizure action. The AO after considering the statement has recorded his finding as under :- From the above, it is clear that Smt. Rajni Goyal alias Rajni Jain W/o Shri Rajiv Jain in has purchased a plot bearing No. 167 measuring 200 sq yards @ ₹ 3150/- per sq yard from Shri Madan Mohan Gupta in the Revenu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of Rajasthan Tehsildar Seva Parishad. When the area of the plot, allottees of the plot, the payments made in record are not in dispute as recorded in the diary, then the On Money payment which is also recorded against each and every plot cannot be disputed as these entries cannot be said to be partly correct and partly wrong. We find substance and merit in the contention of the ld. D/R that if the seized document revealing the facts which are accepted by the assessee, then the entire document is an admissible evidence and a document cannot be held to be partly admissible evidence and partly inadmissible. Further, to controvert the facts as found recorded in the seized material and in the statement of Shri Madan Mohan Gupta, the assessee has not produced even a single document to show that those facts recorded in the seized material and stated in the statement of Shri Madan Mohan Gupta are factually incorrect. The assessee has not even filed the original receipt against the payment made for allotment of the plot as well as the allotment letter issued on behalf of the Rajasthan Tehsildar Seva Parishad to show that the facts recorded in the diary and stated in the statement of Shri ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
