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TMI Blog2023 (9) TMI 94X X X X Extracts X X X X X X X X Extracts X X X X ..... .Y 2017-18. Since the assessee has declared his income at Rs. 36,21,770/- and has not declared the cash amount of Rs. 60.00 lakhs deposited in the Bank A/c, the Assessing Officer invoked the provisions of section 147 of the I.T. Act by recording the following reasons given in the notice issued u/s 143(2) and accordingly reopened the assessment after obtaining necessary approval from the Add. CIT (International Taxation)-2 Hyderabad: "As per the information available with this office, the assessee has made a huge cash deposit of Rs. 60,00,000/- in his bank account maintained with Axis Bank (Current Account # 916020042516778) Himayath Nagar Branch during AY 2017-18. In the ITR for AY 2017-18, the assessee has declared his total income as Rs. 36,21,770. The cash deposits made by the assessee during AY 2017-18 is Rs. 60,00,000. Therefore, the cash deposit is far in excess of the sources of income declared by the assessee. The return of income was only processed u/s. 143(1) of the I.T Act 1961. As the case has never been taken up for scrutiny, there is an under assessment of income to the extent of Rs. 60,00,000." 4. The Assessing Officer issued notice u/s 148 of the Act dated 4.3.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1961. 2.6.3 On 04-03-2020 the JAO issued notice U/s 148 of the IT Act,1961. The assessee filed Return of income in response U/s 148 of the IT Act,1961 on 14-03- 2020. 2.6.4 The reasons recorded for re-opening the assessment were communicated to the assessee as per notice ü/s 143(2) r.w.s 147 of the IT Act,1961 dated 4-1-2020. The AO is in compliance of the case law GKN Driveshafts (India) Ltd. vs. TO in civil appeal no. 7731 to 7737 of 2002(SC). 2.6.5 We note that the limited scrutiny Assessment proceedings U/s 143(3) initiated by ITO Karimnagar, ACIT, Circle-6(1), Hyderabad and finally by ADIT (International Taxation)-2, Hyderabad is barred by limitation. The JAO invoked the provision of section 147 of the IT Act, 1961 as the assessing officer had Reasons to believe that any income chargeable to tax has escaped assessment for the relevant Assessment Year. The JAC had reasons to believe that income has escaped assessment. The reasons were communicated to the assessee as follows: "AS per the information available with this office, the assessee has made a huge cash deposit of Rs. 60,00,000/ in his bank account maintained with Axis Bank (Current Account # 916020042516 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ply it is only a statement made by the assessee without any proof or evidence 2.6.10. On merits of the submission there is no evidence that the money of Rs. 60 lacs belong to his late father and brother. The assessee has failed to prove that the money belongs to his late father and late brother. The ownership of the money is not proved with any tangible evidence. Therefore, as per Indian evidence act when any money, bullion, Jewellery any valuable article or thing are or is found in the position or control of any person it is presumed that it belongs to such person. The claim of the assessee that Rs. 60 lacs is inherited from his late brother and late father is without any legal evidence. 2.6.11 The cash of Rs. 60 Lacs/- is deposited in the assessee's own Axis bank current account and therefore, the assessee is liable to explain the source of the cash deposit. 2.6.12 Therefore, the claim that the money being inherited and is a hereditary income is hereby rejected on lack of any evidence and on merits. 2.6.13 The Assessee has relied on case laws. CIT VS. Tarajan Tea Company (P) Ltd Appeal (Civil) 1941 of 1993, reported in 236 ITR 447(5.C) date of Judgement 04/02/1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovision of the specific Act, or.. The date is extended to 31st March 2021. 2.4.3 The service of notice U/s 143(2) falls under such other action, by whatever named called by an authority... 2.4.4 Therefore, the notice was served as per the RELAXATION OF CERTAIN PROVISIONS OF SPECIFIED ACT Gazette of India notification dated 29-09- 2020. 2.4.5 We note that the date is extended to 31st March 2021 as per above mentioned Gazette notification. The notice dated 04-11-2020 is served on the assessee within the time limit. We reject this ground of objection. 2.7 Ground of objection No. 7 Objection No. 7.1: The Ld. Assessing Officer erred in applying the provisions of sec. 69A of the IT Act, 1961, though the said provisions are not applicable to the assessee who need not maintain books of accounts as an employee in foreign Country. 2.7.1 Having considered the submissions, the AO has applied provisions of section 69 A of the IT Act 1961 because the assessee is found to be owner of the money i.e., cash of Rs. 60 lacs in his own current account Axis bank and the assessee has not disclosed the cash deposit in his Return of income Filed. Further the explanation Offered by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Appellant filed the return of income on 14/03/2020 after receiving the notice u/s. 148. On 16/03/2020, the assessee filed a letter requesting for reasons recorded before issuing the notice u/s. 148. The assessing officer has not given the reasons recorded as per the procedure laid down by the Hon'ble Supreme Court in the case of GKN Drive Shafts (India) Ltd Vs. ITO in civil appeal no. 7731 to 7737 of 2002 within the reasonable period. The learned assessing officer mentioned that the "issues as per reasons recorded for reopening" in the notice u/s. 143(2) read with sec. 147 of the income tax act 1961 dated 04/11/2020 and saying in the assessment order that the reasons were already given. The Assessee contests that reasons recorded before issuing the notice u/s. 148 and not before reopening the assessment. The contents mentioned in the notice by the assessing officer does not contain the words "reason to believe", "satisfaction of the Assessing officer for the income escaped from the assessment". Hence, assessment order passed u/s. 147 read with sec. 144C(13) is illegal and void. 5. At Para 4.3 of page 16 of the Assessment Order u/s. 147 read with sec.144C(13), it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch bank will not come into picture and hence, meaning of ownership is to be taken that it should be in physical position. Hence the contentions on imagination of the assessing officer are incorrect and erroneous. 8. The view of the Assessing officer in the Assessment order u/s. 147 read with sec. 144C(13) in page 16 that the filing of Return of income against the notice u/s. 148 leads to treat the appellant has took part the proceedings is incorrect. Filing of return of income in response to notice u/s. 148 is responsibility of the assessee. It cannot be treated that the proceedings are accepted and the assessee should not ask any thing regarding the reasons for reopening the assessment. 9. Cash Deposited in the bank account cannot be treated as income of the assessee or investment of the assessee. It is also not included u/s. 2(24) of the income definition of the income tax Act, 1961. When these deposits are subject matter of the limited scrutiny proceedings for verification u/s. 143(2), on the same ground and without having fresh tangible information. Provisions of sec. 147 cannot be invoked. 10. The Assessing Officer is stating that action u/s. 147 is as per explanation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the decision of Hon'ble Supreme Court in the case of CIT Vs. Tarazen Tea Co. Private Limited, Appeal (Civil) 1941 of 1993 reported in 2FORM ITR 447(SC) date of Judgement 04/02/1999 is not applicable to the assessee's case and it is incorrect. 13. The Learned Commissioners of Income tax (Members) of Dispute Resolution Panel have stated in Para 2.6.13 and 2.6.14 at page 5 of their proceedings u/s. 144C(5) have mentioned that the case laws relied by the assessee are distinguishable in facts and in law and are not applicable in the case of assessee is incorrect. In the case of CIT VS. Tarazen Tea Co. Private Limited, Appeal (Civil) 1941 of 1993 reported in 236 ITR 447(SC) date of Judgement 04/02/1999, wherein it was held that: "Information which was with the AO at the time of original assessment cannot be used for reopening the Assessment u/s. 147". In the case of ACIT and Anr Vs. Vs. Hotel Blue Moon(2010), 321 ITR 362 (SC) it is held that "it is mandatory for the AO to issue notice u/s. 143(2). The issuance and service of notice u/s. 143(2) is mandatory and not procedural. If the notice is not served within the prescribed period, the assessment order is invalid. Reas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to give details of cash deposits by the assessee in his Bank A/c. Referring to Pages 33 to 44 of the Paper Book, he submitted that the assessee had filed detailed reply before the Assessing Officer challenging the validity of the jurisdiction of the Assessing Officer as well as explaining the source of such cash deposits in the bank a/c. Referring to page 43 of the Paper Book, the learned Counsel for the assessee drew the attention of the Bench to the screenshot of the I.T. Website according to which the assessment proceeding u/s 143(3) is closed. Referring to page 44 of the Paper book, he submitted that the notice u/s 148 of the I.T. Act was issued to the assessee on 4.3.2020 in response to which the assessee filed his return of income on 14.3.2020 declaring the income originally returned. Subsequently the assessee was provided with the reasons according to which the reopening was for the cash deposit of Rs. 60.00 lakhs in the Bank A/c maintained with Axis Bank. 11. The learned Counsel for the assessee submitted that once a notice u/s 143(2) is issued by the Assessing Officer, he is duty bound to pass an order u/s 143(3) which is mandatory in nature and the Assessing Officer ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, the Assessing Officer subsequently transferred the case to Range-6 Hyderabad as per the address in the return of income. The Income Tax Officer Ward-6 Hyderabad transferred the case record to the ACIT Circle 6(1) on 23.8.2018 who vide notice u/s 142(1) dated 17.9.2019 called for certain information. However, subsequently when it was found that the assessee is an NRI working as a Doctor by profession and residing in Kuwait, the case was transferred to the Dy. CIT (International Taxation)-2 Hyderabad. Since the jurisdiction of the assessee falls under the Assessing Officer of the International Taxation Division, the original proceedings were dropped and notice u/s 148 was issued by reopening the case after due approval by the superior authorities. 17. So far as the argument of the learned Counsel for the assessee that the proceeding u/s 143(3) was closed and no assessment order was passed by the Assessing Officer is concerned, he submitted that as and when the time limit for scrutiny expires, the ITBA Portal shows as "closed". This does not mean that the assessment proceedings u/s 143(3) are complete or the Assessing Officer has accepted the information furnished by the assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9;ble Delhi High Court in the case of KLM Royal Dutch Airlines (Supra) has held that once an inquiry has been initiated by the Assessing Officer, it cannot but result in either the return being accepted as having been correctly computed by the concerned assessee, or in an assessment being conducted and concluded thereon by the Assessing Officer. 23. We find the Hon'ble Calcutta High Court in the case of Mohindra Mohan Sirkar (Supra) has quashed the re-assessment proceedings holding that it is the duty of the A.O to pass an assessment order and held where the Income Tax Officer acted on the returns filed by the assessee, issued notices u/s 143(2) and heard the assessee u/s 143(3), but, without completing the assessment, he took recourse to reopen the assessment under section 147 by issuing notices u/s 148, then, in that case, the Income Tax Officer acted without jurisdiction in issuing the notices. 24. We find the Hon'ble Supreme Court in the case of Tarajan Tea Co (P) Ltd & Trustees of H.E.H. the Nizam Supplemental Family Trust (Supra) has held that the Assessing Officer cannot reopen the assessment on the same reasons which were before him at the time of the original pro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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