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TMI Blog2018 (12) TMI 1874X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee has produced death certificate of his brother as well as medical record of the assessee showing that the assessee was undergoing treatment during the relevant period from the month of March to April 2018. Considering all these facts and circumstances of the case, we satisfy that the assessee has explained the reasonable cause for not filing the appeal within the period of limitation. Accordingly, we condone the delay of 99 days in filing the present appeal. 4. In this appeal, the assessee has raised following grounds of appeal: "1. Under the facts and circumstances of the case, the reasons recorded for issue of notice U/s 148 and consequent order passed U/s 147 are illegal and bad in law. 2. The ld. CIT(A) has erred on facts and in law in confirming the addition of Rs. 4,74,000/- U/s 68 of the IT Act, 1961 by holding that the assessee has failed to prove the genuineness of the amount credited in his bank account. 3. The assessee craves to amend, alter and modify any of the grounds of appeal. 4. The appropriate cost be awarded to the assessee." 5. Ground No. 1 of the appeal is regarding validity of reopening. The ld AR of the assessee has submitted that the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not filed the return of Income for A.Y.2011-12. As per information available on record the assessee has deposited a sum of Rs. 15,20,500/- in the Saving Bank account held with State Bank of Patiala during the F.Y.2010-11. Since the assessee has not filed the return of Income for A.Y.2031-12. Therefore, I have the reason to believe that income of Rs. 15,20,500/- chargeable to tax has escaped assessment for the A.Y.2011-12 and thus it is a fit case to initiate proceeding within the meaning of section 147 of Income Tax Act,1951. Notice u/s 148 of Income Tax Act,1961 is issued accordingly." Thus, it is manifest from the reasons recorded by the Assessing Officer that the Assessing Officer begins with the statement that the assessee has not filed return of income for the A.Y. 2011-12. Further while forming the belief, again the Assessing Officer has stated that the assessee has not filed return of income and therefore, he has reason to believe that the income of Rs. 15,20,500/- to be deposited in the bank account chargeable to tax, has escaped assessment. This statement of the Assessing Officer in the reasons recorded is the basis for formation of belief is factually incorrect as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g his return of income. 14. Interestingly, during the course of reassessment proceedings, the ITO in his reassessment order stated clearly in Para 5 that "in the return of income filed under the head Business, you have declared income of Rs. 175,510 on gross receipts of Rs. 21,93,870 u/s 44AD." It is relevant to note the said return of income was not filed in pursuance to issuance of notice u/s 148 but the same was the return of income which was originally filed by the assessee u/s 139 of the Act. It is therefore clear that the whole foundation of the Revenue's reasoning is contradictory and self-defeating where at the time of issuance of notice u/s 148, it says that the assessee has failed to file his return of income and subsequently, during the proceedings u/s 147, it admits that the assessee has filed his return of income originally under section 139. On this ground itself, the assumption of jurisdiction u/s 147 cannot be sustained and the subject proceedings are liable to be quashed. 15. Now, coming to the reasons which have been recorded by the ITO Ward 6(1), Jaipur for initiating proceedings u/s 147 of the Act which are reproduced as under: "As per AIR information ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e examined, it is seen that as far as Indo Arab is concerned white the AO set out the information received from the ED, he failed to examine if that information provided the vitaI link to form the 'reason to believe' that income of the Assessee had escaped assessment for the A Y in question. While the AO has referred to the fact that the ED gave information regarding cash deposits being found in the books of the Assessee, the AO did not state that he examined the returns filed by the Assessee for the said AY and detected that the said cash deposits were not reflected in the returns. In fact, the AO contradicted himself in the reasons recorded by him by noticing the information of the ED to the above effect and then stating that on perusal of the records for the AY in question it was noticed that the Assessee "had not disclosed these transactions in its books of account" Further the AO refers to the ED's information that Mr. Chetan Gupta, partner of the Assessee, failed to explain the sources of the cash deposits as shown in the books of account However, that by itself could not have led the AO to even prima facie conclude that income of the Assessee had escaped assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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