TMI Blog2015 (6) TMI 1217X X X X Extracts X X X X X X X X Extracts X X X X ..... uncontroverted findings, quash the reassessment itself. What held good for deleting the additions on the basis of the reasons recorded the assessment, on the fact of this case and in our humble understanding, was good enough to hold the reasons for reopening the assessment to be incorrect as well. We are unable to see any legally sustainable reasons to come to different conclusions. In our considered view, therefore, the CIT(A) ought to have quashed the reassessment as well. Bearing in mind entirety of the case, we hold that the CIT(A) ought to have, on the peculiar facts and circumstances of the case, quashed the reassessment proceedings as well. We, therefore, quash the reassessment proceedings. As reassessment itself is quashed as above, nothing else survives for adjudication. - I.T.A. No.222/Asr/2014 - - - Dated:- 11-6-2015 - Pramod Kumar AM and A.D. Jain, JJ. For the appellant: J.S. Bhasin For the respondent: Tarsem Lal ORDER Pramod Kumar, J. 1. This appeal is directed against the order dated 23rd January 2014, in the matter of assessment under section 143(3) r.w.s. 147 of the Income Tax Act, 1961, for the assessment year 2005-06. 2. We consider it appr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... PNB Civil Lines 225074 20.03.2005 23,57,000 PNB Civil Lines 225075 31.03.2005 23,57,000 PNB Civil Lines Further, the continuing partners also settled the loan account with the Citizen Urban Co-operative Bank Limited, Jalandhar wherein repayment of loan of ₹ 40,90,630/- and interest of ₹ 40,92,568/- was made during the financial year 2004-05. It was seen that the payment made as above was much more than the income declared by the assessee. Therefore, my predecessor after recording the reasons and after obtaining necessary permission from the then Addl. CIT, Range III, Jalandhar reopened the assessment in this case by issue of Notice u/s. 148 of I.T. Act on 29.3.2012, which was served on the assessee on 29.03.2012. In response to this notice, the assessee himself attended before my predecessor on 24.4.2012 and filed a letter along with a copy of the return of his income. It was further stated by the assessee before the then AO that his return already filed on 11.1.2006 may be treated to have been filed in response to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er material brought on record in the case of partnership firm M/s City Plaza as well as in the case of other partners. During the course of appellate proceedings, it has been submitted by the assessee that the payments made by the partnership firm M/s. City Plaza or by its continuing partners were made out of the sale proceeds of the commercial building known as City Plaza. Not only this, it has further been stated that the payments to the outgoing partners as well as the payment to M/s. Citizen Urban Co-operative Bank towards term loan and interest thereon has been made directly by the purchaser of property known as City Plaza Building i.e. by Sh. Prem Kumar Bhagat. The necessary evidence with regard to the payment of bank loan and interest thereon has also been brought on record. The payments to the outgoing partners were also found to be made by the purchaser of the property. The details of the payments to outgoing partners are given in the sale deed itself which in fact have been made during F.Y. 2005-06. The post dated cheques were also not en-cashed by the outgoing partners and they received the payment in respect of their share directly from the purchaser of the property i.e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reasons for reopening the assessment were incorrect. The CIT(A) has held so and the Assessing Officer is not in challenge against these findings. Yet, when it came to adjudicate upon the challenge to the validity of reassessment proceedings, the CIT(A) holds that the Assessing Officer was having plenty of reasons to issue notice under section 148 of the Act . He does so on the basis that (a) the assessee had not disclosed the facts which are now being disclosed at the time of appellate proceedings , and that (b) the cheques issued by Shri Surinder Mohan Singh (i.e. a person other than the assessee) to the outgoing partners were found to be drawn on an account which was not in his name or in the name of the partnership firm . These things were, in our considered view, wholly irrelevant inasmuch as these things have nothing to do with the reasons of reopening the assessment as noted in the reassessment order itself. 10. In any event, it was not the revenue s case that the assessee failed to disclose what he ought to have disclosed under the law. Such a non disclosure, therefore, cannot be a reason enough to uphold the validity of reassessment proceedings. Similarly, the cheques ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to his notice during the course of proceedings for re-assessment under Section 148 of the Act and that The provision nowhere postulates or contemplates that it is only when there is some addition on the ground on which re-assessment had been initiated, that the assessing officer can make additions on any other ground on the basis of which income may have escaped assessment. The SLP filed by the assessee, against the view so expressed by Their Lordships, has been dismissed by Hon ble Supreme Court on 19.08.2011. 13. The view so taken by Their Lordships is the law in the jurisdiction of Hon ble Punjab Haryana High Court even though other Hon ble High Courts have taken a contrary view. The judicial precedents from other Hon ble High Courts, as available in the public domain and even after taking note of the views so expressed by Their Lordships, have taken a contrary view of the matter, such as in the cases of CIT vs Mohmed Juned Dadani [(2013) 258 CTR 268 (Gujrat)], CIT VS Jet Airways [(2011) 331 ITR 236 (Bombay)], Ranbaxy Laboratories Limited Vs CIT [(2011)336 ITR 136 (Delhi)], ACIT Vs Major Deepak Mehta [(2012) 344 ITR 641 (Chattisgarh)]. All these decisions were dealing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the nature of material that the assessee may seek to rely upon, even at the first stage, to demonstrate that the reasons for reopening are unsustainable in law and even this adjudication by the Assessing Officer is subject matter of legal scrutiny by the appellate authorities in the course of the same appellate proceedings as against the reassessment order. The scheme of law, as laid down by the Hon ble Supreme Court in GKN Driveshaft s case, thus provides for dual adjudication by the Assessing Officer on the correctness of the reasons recorded for reopening the assessment- one at the stage of dealing with the objections of the assessee prior to proceeding with the reassessment proceedings, and the other at the point of time when, during the reassessment proceedings, the Assessing Officer has to take a call on additions to be made in respect of these reasons. That is where there is a paradigm shift in the scheme of things post GKN Drivershaft decision. In a situation in which, during the reassessment proceedings, the Assessing Officer finds these reasons to be so incorrect that he concludes that no income has escaped the assessment and the additions on that count are unwarranted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further appeal. These findings of the CIT(A) have thus reached finality. and are not even in dispute before us. If such be the facts, there can be no justification for taking these findings to its logical conclusions and, based on these uncontroverted findings, quash the reassessment itself. What held good for deleting the additions on the basis of the reasons recorded the assessment, on the fact of this case and in our humble understanding, was good enough to hold the reasons for reopening the assessment to be incorrect as well. We are unable to see any legally sustainable reasons to come to different conclusions. In our considered view, therefore, the CIT(A) ought to have quashed the reassessment as well. 20. In view of these discussions, and bearing in mind entirety of the case, we hold that the CIT(A) ought to have, on the peculiar facts and circumstances of the case, quashed the reassessment proceedings as well. We, therefore, quash the reassessment proceedings. As reassessment itself is quashed as above, nothing else survives for adjudication. 21. In the result, the appeal is allowed in the terms indicated above. Pronounced in the open court today on the 11th day of Ju ..... X X X X Extracts X X X X X X X X Extracts X X X X
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