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TMI Blog2024 (8) TMI 537X X X X Extracts X X X X X X X X Extracts X X X X ..... AO ignoring the fact that the assessment framed u/s 144/147 is bad in law in view of the fact that the service of notice u/s 148 has been affected by affixture without following proper procedure as per rule in Order V of the Code of Civil Procedure, 1908 (5 of 1908). 3. That the CIT(A) has erred in confirming the addition of Rs. 2900000/- made by the AO ignoring the fact that the assessment framed u/s 144/147 is bad in law in view of the fact that there was no material on record to prove that the notice was served to the assessee or agent and as such, resorting to service by affixture was a premature decision. 4. That the order passed by the Ld. CIT(A) confirming the addition made by the AO is bad in law particularly in view of the fact that the reasons recorded are based upon incorrect facts. 5. That the Ld. CIT(A) has erred in relying upon the remand report dated 22.07.2019 without providing the copy of remand report and hence not allowing the opportunity of being heard. That the remand report dated 22.07.2019 stating that the authenticity of additional evidence could not be verified, cannot be relied upon particularly in view of the fact that the assessee had duly furni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted that the impugned order passed by the Ld. CIT(A) is bad in law since the same has been passed without appreciating the fact that the notice u/s 148 was not served on the appellant. He contended that the CIT(A) had not even made any efforts to analyze the bank statement submitted by the assessee as in the instant case, the appellant had duly submitted the copies of Bank statement. In support of arguments to challenge the addition of Rs. 2900000/- sustained by the CIT(A), the Ld AR has filed a brief synopsis which reads as under 2. That the case of the appellant was re-opened vide notice u/s 148 issued on 23.03.2018 [Refer page no 1 of the PB]. The case was re-opened on the basis of AIR information that the appellant had deposited cash amounting to Rs. 1700000/- in saving bank account no 008200000128 maintained with Capital Local Area Bank. The copy of reasons recorded is enclosed at page no 3-4 of the PB. The approval accorded from PCIT under section 151 is enclosed at page no 5-6 of PB. 3. That the notice u/s 148 was issued on 23.03.2018 could not be served in the ordinary way. In these circumstances, the AO directed inspector and tax assistant to serve the notice by affix ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment of Rs. 36,25,000/-. However, even before registering the land in his name, the appellant sold the land to Mr. Kuldip Singh S/O Sh. Chain Singh through an agreement dated 09.11.2010 for Rs 66,00,000. Consequently, the original owners, Smt. Pritam Kaur and Kewal Singh, registered the land in the name of the ultimate buyer, Sh. Kuldip Singh. The details of the consideration paid by the ultimate buyer, Sh. Kuldip Singh, are as follows: (Copy of the letter submitted to A.O. vide reply dated 11.07.2019 is enclosed at page 23-24 of PB). Amount paid by Sh. Kuldeep Singh Date Pritam Kaur Appellant Amount paid by cheque No 656625 09.11.2010 1500000 Amount paid by cheque No 656626 09.11.2010 1500000 Amount paid in cash 3600000 8. From the aforesaid table, it is evident that the appellant had received cash to the tune pf Rs. 3600000/- from Sh. Kuldip Singh, out of which the appellant deposited cash in two bank accounts. However, the AO has erred in alleging that the appellant has deposited amount of Rs. 2900000/- in bank accounts. That the non-application of the mind by the Ld. AO is further evident from the fact that the AO failed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A.O. The AIR information which was factually incorrect cannot be taken as basis for reopening of assessment u/s 148. That the AO while reopening u/s 148 or while completing the assessment u/s 147 has not even bothered to go through the bank statements and had blindly relied upon the information appearing in the AIR. 10.4 In view of the aforesaid, it is evident that the reasons recorded for the purpose of reopening case u/s 148 are bad in law since the same are based upon incorrect facts. As such, the subsequent notice issued u/s 148 is bad in law and invalid. Therefore, the entire reassessment proceedings initiated by the AO become invalid. In this regard reliance is being placed upon the following case laws: - CASE LAWS THAT REASONS RECORDED ARE ON WRONG ASSUMPTION OF FACTS a) [2002]124 Taxman 641 (Gujarat) HIGH COURT OF GUJARAT Saar Enterprises v. Assistant Commissioner of Income-tax Section 147 of the Income-tax Act, 1961 - Income Escaping Assessment - Position After 1-4-1989 - Assessment year 1991-92 - Assessing Officer issued a notice under section 148 in which he recorded reasons that assessee failed to file its return for assessment year 1991-92 - It was also rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... formation which was factually incorrect cannot be taken as basis for reopening of assessment u/s 148. Thus, the AO while reopening proceedings u/s 148 and/or while completing the assessment u/s 147 has not even gone through the bank statements and had just relied upon the AIR information. It is a settled law that the reopening made merely on the basis of AIR information is bad in law. Since there was non-application of the mind by the Ld. AO as evident from the fact that the AO failed to verify the amount of cash deposited in bank from the copies of bank statements duly furnished by the appellant during the course of assessment proceedings. 10. From the record, it is evident that the reasons recorded by the AO for reopening the completed assessment of the assessee are based on factual errors, rendering the notice issued u/s. 147 to be void ab initio, in view of the decision of the Hon'ble Supreme Court in "Kelvinator of India Ltd." (supra), as considered in 'Dr. Aiit Guota' (supra). 11. In our view, the reasons recorded are bad in law as the reopening has been made based on incorrect facts. It is a settled law that the reopening cannot be made based on wrong assumptio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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