TMI Blog2021 (3) TMI 840X X X X Extracts X X X X X X X X Extracts X X X X ..... planation of the assessee before the Assessing Officer indicates that the assessee had not explain the transactions of cash withdrawal and deposits in a precise manner. In other words, he should have disclose and point out the entry wise explanation before the revenue authority, enable them to draw necessary inference with regard to genuineness of the transactions. We are of the view that the information received by the system was specific and clear and after verification of the material evidence produced by the assessee the Assessing Officer disclosed his mind that the assessee failed to explain the source of cash deposit and has reason to believe that the income has escaped assessment. Therefore, it cannot be said that the Assessing officer has not applied his mind and there was no satisfaction by his own with regard to escapement of income. As specifically stated that although it is the case of the assessee that the cash deposit was from the opening cash balance, yet upon verification of the submission filed by the assessee, the Assessing Officer noticed that there was no supporting evidence as regards the source of income. In the reasons, it has been specifically stated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovide the details of cash deposits/cash transactions in Development Credit Bank Ltd. account of ₹ 18.00,000/- during the year along with documentary evidences and source from which this transaction made and tax treatment thereof within three days from receipt of this letter. In response to the above letter dated 12.02.2019, the assessee has filed reply dated 28.02.2019 (received on 01.03.2019) and stated that cash deposit from opening cash balance. However, on verification of submission filed on 01.03.2019, it is ascertained that the assessee company has not submitted any supporting evidences and source of income. The correct income should have been disclosed as income while filling of return of income. However, the assessee has failed to disclose fully and truly the material facts of its correct income in its return of income for the A.Y. 2012-13. 4. In view of the above facts, it is noticed that during the F.Y. 2011-12 relevant to A.Y.2012-13, the assessee entered into transaction regarding cash deposits/cash transactions in Development Credit Bank Ltd. account of ₹ 18,00,000/-. The assessee was required to file correct return of income and disclosed the income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ash was withdrawn from the account of DCB Bank and the same amount was redeposited during the year under consideration. 6. We have heard Mr. S.N. Divatia, the learned counsel appearing for the writ applicant and Mr. Manish Bhatt, learned Senior Counsel assisted by Mrs, Mauna Bhatt, the learned Standing Counsel appearing for the revenue. 7. Mr. S.N. Divatia, the learned counsel appearing for the writ applicant raised the following contentions: 7.1 It was submitted that the impugned notice as well as the order disposing of the objections are bad in law and without jurisdiction because the conditions precedent for valid reopening of the notice under Section 147 of the Act is not satisfied. 7.2 It was submitted that after receiving the notice under Section 133(6) of the Act, the assessee had explained the source of cash deposition of ₹ 18,00,000/- by submitting reply dated 28.02.2019 along with supporting evidences, like copy of cash book for the year 2010-11, 2011-12, copy of bank statement of Vijay Cooperative Bank and DCB Bank. In this regard, it was submitted that the cash transactions of withdrawal and deposit from the bank accounts were duly recorded in bank acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom her account and the Assessing Officer in the reasons recorded did not consider the explanation for the availability of the cash on hand. In this circumstances, the Division of this High Court held that the reasons lacked validity and department proceeded on erroneous premise. 9. In the aforesaid contention raised by the learned counsel for the writ applicant, he prays that there being a merit in the writ application, it may be allowed. 10. Mr. M.R. Bhatt, the learned Senior Counsel assisted by Mrs. Mauna Bhatt, the learned Standing Counsel appearing for the revenue has vehemently opposed the writ application. The learned Senior counsel submitted that the respondent is justified in reopening the assessment. In this regard, it was pointed out that in the present case, no scrutiny assessment took place and only the intimation under Section 143(1) of the Act was issued initially. In this background, he submitted that the information received from NMS was analyzed and further inquiry was conducted by issuance of notice under Section 133(6) of the Act and after considering the assessee's submission, an opinion was formed that there was no explanation by the writ applicant w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in the reasons recorded by the Assessing Officer. 17. After careful reading of the reasons recorded, as referred to above, we are of the view that after receiving the information from the NMS the Assessing Officer has verified the documents and explanation offered by the assessee and was not agree with the explanation and based on the outcome of the verification, drew the inference that the transactions of cash deposit was not shown in the return of income for the year under consideration and noted that the true facts of transactions having not been disclosed by the assessee and income has escaped assessment. We have examined the copy of bank statements at page Nos. 58 and 59 of this writ application. The assessee has not produced the copy of cash books for the years 2010-11 and 2011-12. We found some discrepancies in the bank statements with regard to opening balance and withdrawals of the cash amount. The explanation of the assessee before the Assessing Officer indicates that the assessee had not explain the transactions of cash withdrawal and deposits in a precise manner. In other words, he should have disclose and point out the entry wise explanation before the revenue aut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as cause or justification to know or suppose that income had escaped assessment, it can be said to have reason to believe that an income had escaped assessment. The expression cannot be read to mean that the Assessing Officer should have finally ascertained the fact by legal evidence or conclusion. The function of the Assessing Officer is to administer the statute with solicitude for the public exchequer with an inbuilt idea of fairness to taxpayers. As observed by the Delhi High Court in Central Provinces Manganese Ore Co. Ltd. v. ITO [1991 (191) ITR 662], for initiation of action under section 147(a) (as the provision stood at the relevant time) fulfillment of the two requisite conditions in that regard is essential. At that stage, the final outcome of the proceeding is not relevant. In other words, at the initiation stage, what is required is reason to believe, but not the established fact of escapement of income. At the stage of issue of notice, the only question is whether there was relevant material on which a reasonable person could have formed a requisite belief. Whether the materials would conclusively prove the escapement is not the concern at that stage. This is so be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessing Officer with necessary comments on the specific queries raised in the notice issued under Section133(6) of the Act. According to Mr. Divatia, if the Assessing Officer has any reason to discard such disclosures and still form a belief that the cash deposit of ₹ 18,00,000/remains unexplained, then the Assessing Officer should have stated so specifically in the reasons assigned for the reopening. In other words, the reasons recorded has completely ignored the response made by the assessee to such queries. 24. We are afraid, we are not in a position to accept such submission canvassed on behalf of the writ-applicant. In the reasons, it has been specifically stated that although it is the case of the assessee that the cash deposit was from the opening cash balance, yet upon verification of the submission filed by the assessee, the Assessing Officer noticed that there was no supporting evidence as regards the source of income. In the reasons, it has been specifically stated that the correct income should have been disclosed while filing of the return of the income. Thus, in our opinion, this is not a case, in which, the Assessing Officer could be said to have not be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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