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TMI Blog2024 (1) TMI 259X X X X Extracts X X X X X X X X Extracts X X X X ..... 2014-15. The assessee has assailed the impugned order on the following grounds of appeal before me: "1. On the facts and circumstances of the case, CIT(A) had erred in confirming the addition of Rs. 1,50,000/- made by the Assessing Officer being the amount given as unsecured loan by the assessee. 2. The appellant craves to add, leave, urge, alter, modify or withdraw any ground before or at the time of hearing." Also, the assessee has raised an additional ground of appeal which reads as under: "In the facts and circumstances of the case and in law, initiation of reassessment and invocation of Sec.147 is illegal, ab initio void inasmuch as there was no "reason to believe" that there was escapement of income. The initiation of reassess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consideration. On the basis of the aforesaid facts, the A.O holding a conviction that the assessee was found to be the owner of unexplained money of Rs. 1.50 lac (supra) which was deposited in his bank account in cash on 08.06.2013, reopened his case u/s. 147 of the Act. Notice u/s. 148 of the Act dated 30.03.2021 was issued to the assessee. In compliance, the assessee had filed his return of income for A.Y.2014-15 on 23.04.2021, declaring an income of Rs. 2,09,790/-. 4. As is discernible from the assessment order, the assessee, on being queried about the nature and source of the cash deposit of Rs. 1.50 lac (supra) in his bank account, had submitted that the same was sourced out of his accumulated savings that were generated out of his sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... holding of any bonafide belief by the A.O that any income of the assessee chargeable to tax had escaped assessment. Carrying his contention further, it was submitted by the Ld. AR that a bare perusal of the "reasons to believe" recorded in the case of the assessee, which formed the very basis for initiation of proceedings u/s. 147 of the Act, revealed, that the same had been done on a protective basis qua the cash deposit of Rs. 1.50 lac in his bank account on 08.06.2013, while for, the assessment proceedings on a substantive basis were initiated in the hands of Shri Inder Lal Ramrakhyani (supra) as a ultimate beneficiary of the funds. The Ld. AR in order to buttress his aforesaid contention had taken us through the copy of "reasons to beli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee, therefore, the said impugned proceedings were liable to be quashed for want of valid assumption of jurisdiction. 10. Per contra, the Ld. Departmental Representative (for short 'DR') relied on the orders of the lower authorities. 11. As the assessee has assailed the validity of the jurisdiction assumed by the A.O for initiating proceedings u/s. 147 of the Act, therefore, I shall first deal with the maintainability of the same. 12. Admittedly, it is a matter of fact borne from the "reasons to believe" that proceedings u/s. 147 of the Act had been initiated in the case of the assessee for making an addition of Rs. 1.50 lac (supra), i.e cash deposit in his bank account, on a protective basis. For the sake of clarity and to dispel all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Bombay in the case of DHFL Venture Capital Fund Vs. Income Tax Officer (supra), I find substance in the aforesaid claim of the Ld. AR. As observed by the Hon'ble High Court, as recourse to Section 148 presupposes formation of a reason to believe by the A.O that income of the assessee chargeable to tax had escaped assessment, therefore, the same would mean there is a reason in prasenti, meaning thereby, a reason which is present to his mind when he forms a belief that the income of the assessee had escaped assessment. It was further observed by the Hon'ble High Court that recourse to Section 148 cannot be founded in law on a hypothesis of what would be the position in future should an appeal before the appellate authority, being the Trib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was issued by the department. Also, I find that the ITAT, Bangalore in the case of DCIT Vs. Bullion Investments & Financial Services (P) Ltd. (supra), had observed, that as in the case before them the notice u/s. 148 of the Act was issued for making a protective assessment, the same being bad in law was liable to be quashed. 14. I have given a thoughtful consideration to the issue in hand, and find substance in the claim of the Ld. AR that recourse to proceedings u/s. 147 of the Act would not be permissible for framing of a protective assessment. I, say so, for the reason that reopening is permissible only when the A.O gives a clear finding that ascertainable income has escaped in the hands of a definite assessee. As taking recourse to fr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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