TMI Blog2019 (4) TMI 2080X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee had never filed the return. This, itself would be sufficient to annual the notice of reopening the assessment. In view of the above and in the light of ratio laid down by the Hon`ble High Courts of Gujarat as quoted above and respectfully following the same, we hold that entire reasoning recorded by the AO for initiation of reassessment proceeding and issuance of notice under section 148 of the Act was on the wrong and incorrect facts that the assessee has never filed the return of income, and in fact, it was filed. This view is further supported by decision of Co-ordinate Bench of Surat Tribunal in the case of Vishal Dilip Rai [ 2018 (9) TMI 2022 - ITAT SURAT] in which following the decision of Hon`ble High Court of Gujarat in the case of Sunrise Education Trust[ 2018 (2) TMI 1471 - GUJARAT HIGH COURT] quashed the reopening of assessment as the reasons mentioned that the assessee has not filed return whereas the assessee did file the return of income. We are inclined to hold that the initiation of reassessment proceeding u/s.147 of the Act and notice under section 148 of the Act of the Act and all subsequent proceedings and orders have been issued, conducted, passe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 48 of the Act was issued. However, the same was not provided. The AO has mentioned in show cause notice that total deposits in bank account to the tune of Rs.37,10,700 in the alleged bank account, whereas the addition was made at Rs. 80,77,695 after issue of notice under section 133(6) during the year under consideration which needs to be enquired. This goes to prove that the AO did not have the details of cash deposits in bank account at the time of reopening of assessment, therefore, notice under section 148 of the Act was issued mechanically to make roving enquiries without any reason to believe, hence same is liable to be quashed in the light of decision of Hon`ble Supreme Court in the case of ITO Ors v. Lakshmani Mewal Das [1976] 103 ITR 437 (SC) wherein it was held that the powers of ITO to reopen the assessment, though wide, are not plenary. The words of statute are reason to believe and not reason to suspect . The fact that the AO has mentioned different figures in show-cause notice and suddenly made addition of different figure at the time of assessment order without giving any opportunity of being heard. Hence, notice under section 148 of the Act was issued for makin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nded that the reopening of assessment was made on incorrect facts and without verification of return of income filed by the assessee. Hence, assumption of jurisdiction u/s.147 of the Act is illegal. The learned counsel for the assessee has placed reliance on the judgement of Hon ble Gujarat High Court in the case of Sunrise Education Trust v. Income Tax Officer [2018] 92 Taxman 74 (Gujarat) wherein it was held that when the AO in the reasons recorded proceeded on the erroneous footing that the assessee has not filed return of income at all and when it is not in dispute that the assessee did file the return of income for the assessment year under consideration, which was duly acknowledged by the department, then, it has to be held that the entire reasoning thus proceeded on the wrong premises that the assessee had never filed the return. This, itself would be sufficient to annual the notice of reopening the assessment. 7. The learned Counsel further submitted that the AO was not having the details of bank account in at the time of issue of notice under section 148 of the Act. It is evident from the fact that in the show cause notice, the AO has mentioned that total deposit to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tal gain, he cannot simply dispute the fact that the assessee did not file the return. Importantly, even the second factual assertion of the Assessing Officer in the reasons recorded is totally incorrect. He has referred to said sum of Rs. 1, 18,95,000/-as a sale price of the property. The Assessee had produced before the Assessing Officer, the sale deed in which, the sale consideration disclosed was at Rs. 50 lakhs. 8. The Hon`ble High Court, in view of the foregoing, observed that reasons recorded, in fact, ignored that fact that the sale consideration as per the sale deed was Rs. 50 lakhs and that the assessee had by filing of the return offered his share of such proceeds by way of capital gains. Accordingly, the Hon`ble High Court has quashed the impugned notice for reopening of assessment. Similarly, in the case of the assessee, the assessee filed the return of income and comment figures of cash deposits were not before the AO. Hence, facts of said case are squarely applicable to the case of the assessee . Therefore, it was urged before us to quash the notice for reopening of assessment. The learned counsel for the assessee further placing reliance in the case of Vishal Di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act. I have, therefore, reason to believe that income of Rs.37,10,700/- has escaped assessment within the meaning of section 147 of I. T. Act. It is therefore, necessary to initiate action u/s.147 of I.T. Act, 1961 in the case of the assessee for A.Y. 2007-08. 11. The perusal of above reasons would show that the AO has proceeded to reopen the assessment on the ground that the assessee has not filed his return of income and the assessee did not disclose cash deposits of Rs.37,10,700/- in bank account. However, we find that the assessee did file his return of income on 21.11.2007, i.e. before issue of notice under section 148 of the Act on 21.03.2014. Further, the addition was made on account of cash deposits in bank account was at Rs.80,77,695/- after obtaining copy of bank account from bank authorities under section 133(6) of the Act during the course of assessment proceedings. These facts would reveal that both the grounds of reopening of assessment are factually incorrect as it is undisputed fact that the assessee has did file return of income for the assessment year under consideration. Further, the cash deposits in bank account were at Rs.80,77,695/- and not at R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee had produced before the Assessing Officer, the sale deed in which, the sale consideration disclosed was at Rs. 50 lakhs. The Hon`ble High Court, in view of the foregoing, observed that reasons recorded, in fact, ignored that fact that the sale consideration as per the sale deed was Rs. 50 lakhs and that the assessee had by filing of the return offered his share of such proceeds by way of capital gains. Accordingly, the Hon`ble High Court has quashed the impugned notice for reopening of assessment. Similarly, in the case of the assessee, the assessee filed the return of income and comment figures of cash deposits were not before the AO. Hence, facts of said case are squarely applicable to the case of the assessee 12. We also note that the AO had not examined the cash deposits in bank account on the basis of which reopening of assessment has been made as the said bank account were not in his possession at the time of issue of notice under section 148 of the Act. Hence, the reasons recorded for reopening of assessment are not valid in the light of ratio laid down in the case of ITO Ors v. Lakshmani Mewal Das [1976] 103 ITR 437 (SC) wherein it was held that the powers of I ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
