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TMI Blog2019 (3) TMI 1932X X X X Extracts X X X X X X X X Extracts X X X X ..... eal-2) has erred in law as well as in facts in sustaining addition made for payment of credit card. 3. That the assessee has right to add, amend or alter any ground of appeal." 2. The assessee is an individual and did not file return of income U/s 139(1) of the Act for the year under consideration. The AO issued notice U/s 148 of the Act on 25.03.2015 after recording the reasons that the credit card expenditure to the tune of Rs. 15,29,050/- and interest received in the saving bank account of Rs. 39,000/- has escaped assessment. The AO completed assessment U/s 148 r.w.w. 144 of the I.T. Act and made the addition on total amount of Rs. 15,68,050/-. The assessee challenged the action of the AO before the ld. CIT(A) and contended that the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is permissible. Therefore, no amendment, alteration or change can be made to the reasons recorded for reopening of the assessment U/s 148 of the Act. Even it is not open to the AO to improve upon the reasons recorded at the time of issuing the notice either by adding or substituting the reasons. There is no tangible material having nexus with the reasons recorded by the AO to form the belief that income assessable to tax on account of payment of credit card bills has escaped assessee. The ld. AR has submitted that the reasons must provide a live link to the formation of the belief that income has escaped assessment. In support of his contention, he has relied upon the decision of Hon'ble Bombay High Court in case of Infotech Ltd. V/s ACIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve, it is requested that necessary approval as laid down under sub section (1) of section 151 of the I.T. Act, 1961 may kindly be accorded for issuance of notice u/s 148 of the Act." It is clear that the AO has proposed to assess the income on account of payment of credit card bills of Rs. 15,29,050/- as well as interest of Rs. 39,000/- while recording the reasons for reopening. Since, nobody has appeared on behalf of the assessee in the assessment proceedings therefore, the AO has passed the ex-parte order. The Assessing Officer while passing the assessment order has made the addition as under:- " With these remarks income of assessee assessed u/s 144 of the I.T. Act, 1961 as under:- i) Unexplained payment of credit card bill u/s 69C o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 19 to 23 as under:- "19. In the case in hand, it is not in dispute that the assessment year involved is 1996-97. The last date of the said assessment year was 31st March, 1997 and from that date if four years are counted, the period of four years expired on 1st March, 2001. The notice issued is dt. 5th Nov., 2002 and received by the assessee on 7th Nov., 2002. Under these circumstances, the notice is clearly beyond the period of four years. 20. The reasons recorded by the AO nowhere state that there was failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment of that assessment year. It is needless to mention that the reasons are required to be read as they were recorded by the AO. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or making oral submission, otherwise, the reasons which were lacking in material particulars would get supplemented, by the time the matter reaches to the Court, on the strength of affidavit or oral submissions advanced. 21. Having recorded our finding that the impugned notice itself is beyond the period of four years from the end of the asst. yr. 1996-97 and does not comply with the requirements of proviso to s. 147 of the Act, the AO had no jurisdiction to reopen the assessment proceedings which were concluded on the basis of assessment under s. 143(3) of the Act. On this short count alone the impugned notice is liable to be quashed and set aside. 22. Since we are setting aside the impugned notice only on the first ground of challeng ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the bank account. Though, the ld. CIT(A) has stated that in the notice issued U/s 142(1) of the I.T. Act the AO has mentioned the cash deposit in the bank account however, the AO finally made the addition on account of payment of credit card bills then the notices issued U/s 142(1) itself was not considered by the AO while making the addition. Even otherwise the notice issued U/s 142(1) would not substitute the reasons recorded by the AO. Accordingly, in view of the undisputed facts that the amount which was proposed to assess the income by the AO in the reasons recorded is not actually represents the payment of credit card bills then, reopening based on the incorrect facts and non application of mind is not sustainable in law. Hence, we ..... X X X X Extracts X X X X X X X X Extracts X X X X
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