9911796707
TMI Blog2025 (5) TMI 879X X X X Extracts X X X X X X X X Extracts X X X X ..... . The facts in brief are that the assessee filed the return of income on 30.09.2009, declaring the total income of Rs.35,316/-, which was processed u/s 143(1) of the Act. Thereafter the ld. AO reopened the case of the assessee u/s 147 of the Act by issuing notice u/s 148 of the Act on 29.07.2016, after receiving a letter dated 16.03.2016, from ITO (Inv.), unit-1, Kolkata, in which it was stated that assessee received money after huge cash was deposited in the individuals current account and proprietary concerns from which the assessee has received Rs.3.64 crores. The assessee submitted the acknowledgement of ITR of the assessee on 04.08.2016. Thereafter the statutory notices along with notice u/s 142(1) of the Act and questionnaire were issued and duly served upon the assessee. The assessee submitted before the ld. AO from time-to-time various documents/evidences as called for by the ld. AO. The AO noted that as per the ITO(inv.) Unit-1, Kolkata, the assessee has received Rs.3.64 crores from individual current accounts and or current accounts of proprietary concerns in which huge cash was deposited before transferring the money to the assessee company routed through from M/s Mapple ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any reasonable person to come to the same conclusion as that of the AO. The outcome of the assessment also fortifies the same. Therefore, the allegation that AO was guided/dictated by the other officials and without independent application of mind and there was a change of opinion are dismissed as devoid of merit. These grounds are therefore dismissed. 06. The ld. AR vehemently submitted before us that the order passed by the ld. CIT (A) is perverse and against the facts available on record. The ld. AO received information from ITO (Inv.), Unit-1, Kolkata that the assessee has received Rs.3.64 crores after deposit of cash at source either in individual current account or proprietorship account maintained with ICICI Bank Ltd. The transactions pattern indicated that the assessee company was sold out or transferred to the beneficiaries and in process directors/ management of the company had also been changed and the investments made in equity of private limited company or unquoted companies have been sold against funds received by the assessee by depositing cash at source in individual or proprietorship account. Thereafter, the ld. AO considering the above facts formed and recorde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... digarh - Trib.)/[2014] 147 ITD 269 (Chandigarh - Trib.)/[2013] 152 TTJ 629 (Chandigarh - Trib.)[22-06-2012].The ld AR finally prayed that the re-opening of assessment by the AO is invalid and may kindly be quashed. The ld AR further submitted that reopening on the basis of such defective and wrong reasons can not be made and is liable to be quashed. In defense of argument the ld. A.R relied on the series of decisions of Hon'ble Delhi High Court in the case of Dr Ajit Gupta vs. ACIT in 383 ITR 361 (Del-HC). The Ld. A.R further stated that the reasons recorded have to be read as there are recorded and no substitution and addition or deletion are allowed at the latest stage. The Ld. A.R therefore stated that since the AO has recorded and mentioned the wrong facts that the assessee has deposited cash into ICICI Bank which is patently wrong as the assessee has not deposited any cash into ICICI bank. The Ld. A.R therefore submitted that even on this count the reopening of assessment has to be quashed. In defense of argument the Ld. A.R relied on the decision of Bombay High Court in the case of Hindustan Lever Ltd. vs. R. B. Wadkar, ACIT in [2004] 268 ITR 332 (Bom). 08. The ld. AR also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fter in second para the AO stated that it was further reported indicated pattern that aforesaid company was sold out or transferred to the beneficiaries and in the process the management/directors of the company had also been changed and investments in quoted and unquoted shares were sold against funds received by the assessee by depositing cash and thereafter in 3rd para stated that considering the above the income of the assessee escaped assessment. For the sake of ready reference the reasons recorded are extracted below: "It isas been reported that during the course of verification of STR No.1000015473. The above named assessee had received funds of Rs 3.64 Crore approx after deposit of cash at source either in individual current account or proprietorship account maintained with ICICI Bank Ltd. It has further been reported that the transaction pattern indicates that the aforesaid company was sold out or transferred to the beneficiaries and in process directors management of the company had also been changed and the investment made in equity of private limited company or unquoted companies have been sold against finds received by the aforesaid company by depositing cash at so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elief and the AO has done only reproduction of the information received and concluded on that basis. We note from the above that the AO has not applied his independent mind to the information received from ITO (Inv.), Kolkata. We observe that the information received was extracted in the reasons recorded as they were received even without verifying the same whether those were correct or not and the assessment was reopened u/s 147 of the Act. We also observe that there was total non-application of mind by the AO to the information received and he has only acted on the basis of borrowed satisfaction to reopen the assessment which is not permissible under the Act. In our opinion, the AO has to exercise powers as conferred upon him by section 147 r.w.s. 148 of the Act with great care and caution as by exercising the reassessment jurisdiction u/s. 147, the AO unsettles the already completed assessment putting the assessee to a huge inconvenience and harassment. In the present case, the AO has incorrectly reopened the assessment by not even verifying the facts that there was no such bank account of the assessee with ICICI Bank. Therefore, considering these facts and circumstances, the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to those reasons. No inference can be allowed to be drawn based on reasons not recorded. It is for the Assessing Officer to disclose and open his mind through reasons recorded by him. He has to speak through his reasons. It is for the Assessing Officer to reach to the conclusion as to whether there was failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for the concerned assessment year. It is for the Assessing Officer to form his opinion. It is for him to put his opinion on record in black and white. The reasons recorded should be clear and unambiguous and should not suffer from any vagueness. The reasons recorded must disclose his mind. Reasons are the manifestation of mind of the Assessing Officer. The reasons recorded should be self-explanatory and should not keep the assessee guessing for the reasons. Reasons provide link between conclusion and evidence. The reasons recorded must be based on evidence. The Assessing Officer, in the event of challenge to the reasons, must be able to justify the same based on material available on record. He must disclose in the reasons as to which fact or material was not disclosed by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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