Loading judgment…
Facts
The assessee filed a return of income declaring Nil income. Subsequently, information was received from the 'French' Government about a foreign bank account maintained by the assessee. A survey was conducted, during which the assessee reportedly accepted the amount as undisclosed income. The Assessing Officer issued a notice u/s 148 for reassessment.
Held
The Tribunal held that the reassessment proceedings were barred by limitation because the notice u/s 143(2) was issued beyond the prescribed time limit. Furthermore, the information sought from Swiss authorities was not applicable for the period prior to April 1, 2011, making the reference invalid.
Key Issues
Whether the reassessment proceedings initiated against the assessee were barred by limitation due to the delayed issuance of notice u/s 143(2) and the invalidity of the information obtained from foreign authorities.
Sections Cited
143(2), 147, 148, 131, 69A, 153, 142(2A), 92CA
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “E” MUMBAI
Before: SHRI OM PRAKASH KANT & SHRI RAJ KUMAR CHAUHAN
This appeal has been preferred by the assessee against the order dated 07.01.2025 passed by the Ld. Commissioner of Income- tax (Appeals) – 51, Mumbai [in short ‘the Ld. CIT(A)’] for assessment year 2007-08, raising following grounds:
1. The CIT (A) failed to appreciate that the notice u/s 1. The CIT (A) failed to appreciate that the notice u/s 1. The CIT (A) failed to appreciate that the notice u/s 143(2) of the Act was time barred and bad in law, and 143(2) of the Act was time barred and bad in law, and 143(2) of the Act was time barred and bad in law, and hence, the assessment based on such a notice was ab assessment based on such a notice was ab assessment based on such a notice was ab initio void. Hence, the assessment order is liable to be initio void. Hence, the assessment order is liable to be initio void. Hence, the assessment order is liable to be quashed.
2. The CIT (A) failed to appreciate that the assessment 2. The CIT (A) failed to appreciate that the assessment 2. The CIT (A) failed to appreciate that the assessment order dated 18th March, 2014 passed by the AO was time order dated 18th March, 2014 passed by the AO was time order dated 18th March, 2014 passed by the AO was time barred, and hence, bad in law. Hence, barred, and hence, bad in law. Hence, the assessment the assessment order is liable to be quashed. order is liable to be quashed.
The CIT (A) failed to appreciate that the reopening of 3. The CIT (A) failed to appreciate that the reopening of 3. The CIT (A) failed to appreciate that the reopening of assessment u/s 147 of the Act merely on the basis of assessment u/s 147 of the Act merely on the basis of assessment u/s 147 of the Act merely on the basis of loose, uncertified and unverified sheets purportedly loose, uncertified and unverified sheets purportedly loose, uncertified and unverified sheets purportedly received from foreign government is not justif received from foreign government is not justified. Hence, ied. Hence, the reopening of assessment is bad in law and may be the reopening of assessment is bad in law and may be the reopening of assessment is bad in law and may be quashed.
The CIT (A) failed to appreciate that the recorded 4. The CIT (A) failed to appreciate that the recorded 4. The CIT (A) failed to appreciate that the recorded reasons contain factual mistakes that the alleged reasons contain factual mistakes that the alleged reasons contain factual mistakes that the alleged undisclosed bank account was found "consequent to undisclosed bank account was found "consequent to undisclosed bank account was found "consequent to survey". As it is not possib survey". As it is not possible to improve upon the reasons le to improve upon the reasons once recorded, the factual mistake in the recorded reasons once recorded, the factual mistake in the recorded reasons once recorded, the factual mistake in the recorded reasons make the reopening of assessment bad in law. make the reopening of assessment bad in law.
The CIT (A) failed to appreciate that the AO was not 5. The CIT (A) failed to appreciate that the AO was not 5. The CIT (A) failed to appreciate that the AO was not justified in disposing off the Assessee's objections to justified in disposing off the Assessee's objections to justified in disposing off the Assessee's objections to reopening of assessment in a non of assessment in a non-speaking manner speaking manner without dealing with any of the Assessee's contentions. without dealing with any of the Assessee's contentions. without dealing with any of the Assessee's contentions. Therefore, the reopening of Assessee's assessment was Therefore, the reopening of Assessee's assessment was Therefore, the reopening of Assessee's assessment was bad in law 6. The CIT (A) failed to appreciate that the bad in law 6. The CIT (A) failed to appreciate that the bad in law 6. The CIT (A) failed to appreciate that the Assessee did not have any bank account outside Ind Assessee did not have any bank account outside Ind Assessee did not have any bank account outside India, much less the bank account in respect of which addition much less the bank account in respect of which addition much less the bank account in respect of which addition has been made. The CIT (A) failed to appreciate that on the has been made. The CIT (A) failed to appreciate that on the has been made. The CIT (A) failed to appreciate that on the basis of the alleged 'base note' (which also did not contain basis of the alleged 'base note' (which also did not contain basis of the alleged 'base note' (which also did not contain the accurate particulars of the Assessee), it could not be the accurate particulars of the Assessee), it could not be the accurate particulars of the Assessee), it could not be established that established that the Assessee held the bank account the Assessee held the bank account outside India. outside India.
7. The CIT (A) failed to appreciate that no addition could 7. The CIT (A) failed to appreciate that no addition could 7. The CIT (A) failed to appreciate that no addition could have have have been been been made made made on on on the the the basis basis basis of of of uncertified/ uncertified/ uncertified/ unauthenticated loose sheets, and hence, the CIT (A) erred unauthenticated loose sheets, and hence, the CIT (A) erred unauthenticated loose sheets, and hence, the CIT (A) erred in confirming the addition of Rs. 19,48,46, in confirming the addition of Rs. 19,48,46,625/-.
The CIT (A) failed to appreciate that the refusal of the 8. The CIT (A) failed to appreciate that the refusal of the 8. The CIT (A) failed to appreciate that the refusal of the Assessee to sign the consent waiver form was justified as Assessee to sign the consent waiver form was justified as Assessee to sign the consent waiver form was justified as signing the same would have amounted to making a false signing the same would have amounted to making a false signing the same would have amounted to making a false statement that the Assessee was the owner of the alleged statement that the Assessee was the owner of the alleged statement that the Assessee was the owner of the alleged account and would h account and would have been used against him ave been used against him subsequently. Hence, the CIT (A) erred in drawing an subsequently. Hence, the CIT (A) erred in drawing an subsequently. Hence, the CIT (A) erred in drawing an adverse inference from the fact of refusal of the Assessee adverse inference from the fact of refusal of the Assessee adverse inference from the fact of refusal of the Assessee to sign the said consent waiver form. to sign the said consent waiver form.
9. The CIT(A) failed to appreciate that the AO had not 9. The CIT(A) failed to appreciate that the AO had not 9. The CIT(A) failed to appreciate that the AO had not brought any material on r brought any material on record to suggest that the alleged ecord to suggest that the alleged information information information was was was actually actually actually received received received from from from French French French Government as alleged. The CIT(A) further failed to provide Government as alleged. The CIT(A) further failed to provide Government as alleged. The CIT(A) further failed to provide authenticated/ certified copies of the same in spite of authenticated/ certified copies of the same in spite of authenticated/ certified copies of the same in spite of repeated requests which shows the absence of credibility repeated requests which shows the absence of credibility repeated requests which shows the absence of credibility of the source of the alleged information. Hence, the alleged the source of the alleged information. Hence, the alleged the source of the alleged information. Hence, the alleged 'base note' could not have been relied upon. 'base note' could not have been relied upon.
10. The CIT(A) failed to consider the submissions made by 10. The CIT(A) failed to consider the submissions made by 10. The CIT(A) failed to consider the submissions made by the Assessee, the documents relied upon and further erred the Assessee, the documents relied upon and further erred the Assessee, the documents relied upon and further erred in confirming the addition on the bas in confirming the addition on the basis of factually is of factually incorrect allegations and surmises & conjectures. Thus, incorrect allegations and surmises & conjectures. Thus, incorrect allegations and surmises & conjectures. Thus, the CIT (A) erred in confirming the addition made by the the CIT (A) erred in confirming the addition made by the the CIT (A) erred in confirming the addition made by the AO in violation of the principle of natural justice. AO in violation of the principle of natural justice. 11. 11. The CIT (A) failed to appreciate the ambiguity in . The CIT (A) failed to appreciate the ambiguity in . The CIT (A) failed to appreciate the ambiguity in the alleged 'b the alleged 'base note', and hence, erred in confirming the ase note', and hence, erred in confirming the addition without there being any evidence to show the addition without there being any evidence to show the addition without there being any evidence to show the currency in which the figures were mentioned in the currency in which the figures were mentioned in the currency in which the figures were mentioned in the alleged 'base note'. Furthermore, the conversion factor alleged 'base note'. Furthermore, the conversion factor alleged 'base note'. Furthermore, the conversion factor applied to convert such currency into INR was in applied to convert such currency into INR was incorrect. correct. Hence, the quantification of the amount of addition is bad Hence, the quantification of the amount of addition is bad Hence, the quantification of the amount of addition is bad in law. The Appellant states that the above Grounds of Appeal
are The Appellant states that the above Grounds of Appeal are The Appellant states that the above Grounds of Appeal are in addition to, in the alternative and without prejudice to in addition to, in the alternative and without prejudice to in addition to, in the alternative and without prejudice to each other and the Appellant further craves leave to add, each other and the Appellant further craves leave to add, each other and the Appellant further craves leave to add, amend, d, d, alter alter alter or or or delete delete delete any any any of of of the the the above above above Grounds of Appeal. Appeal.
2. Briefly stated, facts of the case are that assessee had originally Briefly stated, facts of the case are that assessee had originally Briefly stated, facts of the case are that assessee had originally filed his return of income for the year under consideration on filed his return of income for the year under consideration on filed his return of income for the year under consideration on 07.12.2007 declaring total income 07.12.2007 declaring total income at Rs. Nil. The return of income Rs. Nil. The return of income was processed u/s 143(1) as processed u/s 143(1) of the Income-tax Act, 1961 (in short ‘the tax Act, 1961 (in short ‘the Act’). Subsequently, information was received in the case of the Act’). Subsequently, information was received in the case of the Act’). Subsequently, information was received in the case of the assessee from the ‘French French’ Government indicating that the assessee Government indicating that the assessee was maintaining a foreign bank account a foreign bank account in HSBC Geneva, in HSBC Geneva, Switzerland. The said information is . The said information is commonly known as the base commonly known as the base note in relation to bank account in relation to bank account. The said base note containing . The said base note containing personal details of the assessee including his name, date of birth, personal details of the assessee including his name, date of birth, personal details of the assessee including his name, date of birth, place of birth, sex, nationality along with date of opening bank place of birth, sex, nationality along with date of opening ba place of birth, sex, nationality along with date of opening ba account account account and and and amount amount amount of of of the the the balance balance balance in in in particular particular particular year. year. year. Subsequently, a survey u/s 133A of the Act was carried out on survey u/s 133A of the Act was carried out on survey u/s 133A of the Act was carried out on 30.09.2011 30.09.2011 30.09.2011 by by by the the the Investigation Investigation Investigation Wing Wing Wing of of of the the the Income-tax Income Income Department, Mumbai. During the survey proceedings, the assessee Department, Mumbai. During the survey proceedings, the assessee Department, Mumbai. During the survey proceedings, the assessee was confronted with the information related to the foreign bank h the information related to the foreign bank h the information related to the foreign bank account, then, he accepted the amount lying in the foreign bank he accepted the amount lying in the foreign bank he accepted the amount lying in the foreign bank account as undisclosed income in his hands. In view of the account as undisclosed income in his hands. In view of the account as undisclosed income in his hands. In view of the information received coupled with the finding during the course of information received coupled with the finding during the co information received coupled with the finding during the co the survey proceedin the survey proceedings, the Assessing Officer recorded reasons to he Assessing Officer recorded reasons to believe that income escaped assessment and issued notice u/s 148 believe that income escaped assessment and issued notice u/s 148 believe that income escaped assessment and issued notice u/s 148 of the Act on 30.03.2012. During the course of the reassessment of the Act on 30.03.2012. During the course of the reassessment of the Act on 30.03.2012. During the course of the reassessment proceedings, a summon u/s 131 of the Act was also issued to the summon u/s 131 of the Act was also issued to the summon u/s 131 of the Act was also issued to the assessee. Further a show cause notice was also issued on a show cause notice was also issued on a show cause notice was also issued on 23.10.2013 23.10.2013 23.10.2013 calling upon calling calling upon as upon as as why why the balance amount why the the balance amount balance amount of of of Rs.19,48,46,625/- equivalent to USD 43,29,943 (@ 45 INR per equivalent to USD 43,29,943 (@ 45 INR per equivalent to USD 43,29,943 (@ 45 INR per USD) should not be added to the total income of the assessee. But, USD) should not be added to the total income of the assessee. USD) should not be added to the total income of the assessee. the assessee however responded that the assessee however responded that said account was neither said account was neither opened nor operated or controlled by him. The Ld. Assessing Officer opened nor operated or controlled by him. The Ld. Assessing Officer opened nor operated or controlled by him. The Ld. Assessing Officer keeping in view the facts and circumstances of the case treated the keeping in view the facts and circumstances of the case treated the keeping in view the facts and circumstances of the case treated the balance lying in foreign bank account of Rs.19,48,46,625/- as balance lying in foreign bank account of Rs.19,48,46, balance lying in foreign bank account of Rs.19,48,46, unexplained income as part of unexplained income as part of total income of the assessee u/s 69A al income of the assessee u/s 69A of the Act.
3. On further appeal, the Ld. CIT(A) rejected the various legal On further appeal, the Ld. CIT(A) rejected the various legal On further appeal, the Ld. CIT(A) rejected the various legal grounds raised by the assessee and also dismissed the appeal of the grounds raised by the assessee and also dismissed the appeal of the grounds raised by the assessee and also dismissed the appeal of the assessee on merit of the addition. assessee on merit of the addition.
4. Aggrieved the assessee is in appeal be Aggrieved the assessee is in appeal before the Tribunal by way fore the Tribunal by way of raising grounds as reproduced as reproduced above.
5. With reference to ground No. 1 of the appeal, the Ld. counsel With reference to ground No. 1 of the appeal, the Ld. counsel With reference to ground No. 1 of the appeal, the Ld. counsel for the assessee referred to the Paper Book containing pages 1 to for the assessee referred to the Paper Book containing pages 1 to for the assessee referred to the Paper Book containing pages 1 to 85. The Ld. counsel referred to notice u/s 148 of the Act issued on 85. The Ld. counsel referred to notice u/s 148 of the Act i 85. The Ld. counsel referred to notice u/s 148 of the Act i 30.03.2012, a copy of which is available on Paper Book page 11. 30.03.2012, a copy of which is available on Paper Book page 11. 30.03.2012, a copy of which is available on Paper Book page 11. The Ld. counsel submitted that after issuing notice u/s 148 of the The Ld. counsel submitted that after issuing notice u/s 148 of the The Ld. counsel submitted that after issuing notice u/s 148 of the Act, no notice u/s 143(2) of the Act was issued in the case of the no notice u/s 143(2) of the Act was issued in the case of the no notice u/s 143(2) of the Act was issued in the case of the assessee, which is a jurisdictional requirement f which is a jurisdictional requirement for taking a case for or taking a case for scrutiny thereafter as jurisdictional requirement. T r as jurisdictional requirement. T r as jurisdictional requirement. The Assessing Officer was required to issue notice u/s 143(2) of the Act within the Officer was required to issue notice u/s 143(2) of the Act within the Officer was required to issue notice u/s 143(2) of the Act within the limitation of six month from the end of the financial year in which limitation of six month from the end of the financial year in which limitation of six month from the end of the financial year in which the return of income of income was filed. The Ld. counsel submitted that first The Ld. counsel submitted that first notice u/s 143(2) of the Act was issued only on 23.10.2013 whereas notice u/s 143(2) of the Act was issued only on 23.10.2013 whereas notice u/s 143(2) of the Act was issued only on 23.10.2013 whereas the limitation for issuing the notice under 143(2) expired on the limitation for issuing the notice under 143(2) expired on the limitation for issuing the notice under 143(2) expired on 30.09.2013 , since the return of income in , since the return of income in response response to notice u/s 148 was filed on 25/04/2 25/04/2012 , therefore, the notice u/s 1 therefore, the notice u/s 143(2) of the Act issued is beyond the limitation period. Hence, t is beyond the limitation period. Hence, the scrutiny is beyond the limitation period. Hence, t proceedings are not sustainable in law. The Ld. counsel for the proceedings are not sustainable in law. The Ld. counsel for the proceedings are not sustainable in law. The Ld. counsel for the assessee in support of contention relied on the decision of the assessee in support of contention relied on the decision of the assessee in support of contention relied on the decision of the Hon’ble Supreme Co Hon’ble Supreme Court in the case of ACIT v. Hotel Bluemoon ACIT v. Hotel Bluemoon (2010) 188 taxmann.com 113 (SC) (2010) 188 taxmann.com 113 (SC) , decision of Hon’ble Delhi decision of Hon’ble Delhi High Court in the case of High Court in the case of PCIT v. Paramount Biotech Industries PCIT v. Paramount Biotech Industries Ltd.
888/2017 and decision of the Co- -ordinate Bench of the Tribunal in the case of the Tribunal in the case of Dhaval Exim Pvt. Ltd. v. ACIT in Dhaval Exim Pvt. Ltd. v. ACIT in ITA No. 2532/Mum/2023.
In support of ground No. 2 of the appeal, the Ld. counsel In support of ground No. 2 of the appeal, the Ld. counsel In support of ground No. 2 of the appeal, the Ld. counsel submitted that the reassessment order passed by the AO was submitted that the reassessment order passed by the AO was submitted that the reassessment order passed by the AO was barred by the limitation and therefore, liable to be quashed. The Ld. barred by the limitation and therefore, liable to be quashed. The Ld. barred by the limitation and therefore, liable to be quashed. The Ld. counsel referred to the provisions of section 153 of the Act and counsel referred to the provisions of section 153 of the Act and counsel referred to the provisions of section 153 of the Act and submitted that reassessment proceedings have to be completed itted that reassessment proceedings have to be completed itted that reassessment proceedings have to be completed within one year from the end of the relevant financial year in which one year from the end of the relevant financial year in which one year from the end of the relevant financial year in which notice u/s 148 of the Act was notice u/s 148 of the Act was served. Since the notice u/s 148 of served. Since the notice u/s 148 of the Act has been served on 30/03/2012, therefore, accordingly the Act has been served on 30/03/2012, therefore, the Act has been served on 30/03/2012, therefore, reassessment proceedings was to be completed on or before eassessment proceedings was to be completed on or before eassessment proceedings was to be completed on or before 31.03.2013 whereas the present assessment proceedings has been 31.03.2013 whereas the present assessment proceedings has been 31.03.2013 whereas the present assessment proceedings has been completed on 18.03.2014. completed on 18.03.2014.
The Ld. Departmental Representative (DR) on the other hand, The Ld. Departmental Representative (DR) on the other hand, The Ld. Departmental Representative (DR) on the other hand, relied on the finding of the Ld. CIT(A) wherein relied on the finding of the Ld. CIT(A) wherein he held that in view he held that in view of the information sought under ex of the information sought under exchange of information by the FT change of information by the FT & TR Division of the CBDT, the Assessing Officer got additional one TR Division of the CBDT, the Assessing Officer got additional one TR Division of the CBDT, the Assessing Officer got additional one year for completion of the assessment and therefore, assessment year for completion of the assessment and therefore, assessment year for completion of the assessment and therefore, assessment was within the limitation. The relev was within the limitation. The relevant finding of the Ld. CIT(A) is ant finding of the Ld. CIT(A) is reproduced as under: reproduced as under:
“5.1 In the 1st st ground of appeal the appellant has challenged ground of appeal the appellant has challenged the validity of the order U/s 143(3) r.w.s. 147 on the ground the validity of the order U/s 143(3) r.w.s. 147 on the ground the validity of the order U/s 143(3) r.w.s. 147 on the ground that the assessment is time barred. In support of the same, that the assessment is time barred. In support of the same, that the assessment is time barred. In support of the same, the appellant stat the appellant states that the notice U/s 148 was served on es that the notice U/s 148 was served on 30.03.2012 and hence the order was required to be passed 30.03.2012 and hence the order was required to be passed 30.03.2012 and hence the order was required to be passed by 31.03.2013 as against the order passed on 31.03.2014. It by 31.03.2013 as against the order passed on 31.03.2014. It by 31.03.2013 as against the order passed on 31.03.2014. It has therefore been argued by the appellant that the order has therefore been argued by the appellant that the order has therefore been argued by the appellant that the order has been passed beyond the statutory tim has been passed beyond the statutory time limit as e limit as prescribed in the Act and hence is time barred. This prescribed in the Act and hence is time barred. This prescribed in the Act and hence is time barred. This contention of the appellant was forwarded to the AO for his contention of the appellant was forwarded to the AO for his contention of the appellant was forwarded to the AO for his comments and report vide letter dated 13.07.2015. The AO comments and report vide letter dated 13.07.2015. The AO comments and report vide letter dated 13.07.2015. The AO vide his letter dated 01.06.2015 has informed that in the vide his letter dated 01.06.2015 has informed that in the vide his letter dated 01.06.2015 has informed that in the instant case a re instant case a reference was made to the FT & TR Division of ference was made to the FT & TR Division of CBDT on 12.03.2012 to obtain certain information from the CBDT on 12.03.2012 to obtain certain information from the CBDT on 12.03.2012 to obtain certain information from the Swiss Authorities under the Articles of Exchange in the India Swiss Authorities under the Articles of Exchange in the India Swiss Authorities under the Articles of Exchange in the India - Switzerland DTAA and this request was duly forwarded to Switzerland DTAA and this request was duly forwarded to Switzerland DTAA and this request was duly forwarded to the Competent Authority of Switzer the Competent Authority of Switzerland by the FT & TR land by the FT & TR Division on 12.03.2013. The AO has also furnished a copy of Division on 12.03.2013. The AO has also furnished a copy of Division on 12.03.2013. The AO has also furnished a copy of this letter. It is thus noticed that the instant case ius covered this letter. It is thus noticed that the instant case ius covered this letter. It is thus noticed that the instant case ius covered by explanation to Section 153 of the Act which lays down by explanation to Section 153 of the Act which lays down by explanation to Section 153 of the Act which lays down that the time barring period shall not include the pe that the time barring period shall not include the pe that the time barring period shall not include the period between forwarding of request to another jurisdiction and the between forwarding of request to another jurisdiction and the between forwarding of request to another jurisdiction and the date of receipt of the information or one year whichever is date of receipt of the information or one year whichever is date of receipt of the information or one year whichever is less. In the instant case the request was forwarded on less. In the instant case the request was forwarded on less. In the instant case the request was forwarded on 12.03.2013 and hence the period of limitation is extended by 12.03.2013 and hence the period of limitation is extended by 12.03.2013 and hence the period of limitation is extended by one year and one year and thus there is no merit in the argument of the thus there is no merit in the argument of the appellant that the case is time barred with the order having appellant that the case is time barred with the order having appellant that the case is time barred with the order having been passed on 18.03.2014 as against the time barring date been passed on 18.03.2014 as against the time barring date been passed on 18.03.2014 as against the time barring date of of 31.03.2013. 31.03.2013. This This ground ground of of appeal appeal of of the the appellant is dismissed.”
8. The Ld. counsel fo The Ld. counsel for the assessee however submitted that r the assessee however submitted that during the relevant period there was no treaty between India and during the relevant period there was no treaty between India and during the relevant period there was no treaty between India and Switzerland regarding exchange of information. In the treaty which Switzerland regarding exchange of information. In the treaty which Switzerland regarding exchange of information. In the treaty which has been signed is operative from the subsequent period from the has been signed is operative from the subsequent period from the has been signed is operative from the subsequent period from the relevant assessment y relevant assessment year. Therefore, the reference which was sent erence which was sent by the FT&TR Division for the assessment year under consideration R Division for the assessment year under consideration R Division for the assessment year under consideration was ‘invalid reference invalid reference’ and the invalid reference cannot validate the and the invalid reference cannot validate the extension of limitation. The Ld. counsel for the assessee relied on extension of limitation. The Ld. counsel for the assessee relied on extension of limitation. The Ld. counsel for the assessee relied on the decision of the Co ision of the Co-ordinate Bench in the case of ordinate Bench in the case of Shri Pravin Sawhney v. ACIT in Sawhney v. ACIT in ITA No. 1539-1544/Mum/2017. 1544/Mum/2017.
We have heard rival submissions of the parties and perused We have heard rival submissions of the parties and perused We have heard rival submissions of the parties and perused the relevant materials on record the relevant materials on record. The issue in dispute raised in the The issue in dispute raised in the ground is the period within which the Assessing Officer was period within which the Assessing Officer was period within which the Assessing Officer was required to complete the reassessment proceedings under section required to complete the reassessment proceedings under section required to complete the reassessment proceedings under section 147 of the Act. The relevant limitation period for passing order 147 of the Act. The relevant limitation period for passing order 147 of the Act. The relevant limitation period for passing order under section 147 of the Act has been provided under section under section 147 of the Act has been provided under section under section 147 of the Act has been provided under section 153(2) of the Act . The relevant provision during relevant period is The relevant provision during relevant period is The relevant provision during relevant period is reproduced as under: reproduced as under:
“(2) No order of assessment, reassessment or recomputation (2) No order of assessment, reassessment or recomputation (2) No order of assessment, reassessment or recomputation shall be made under section 147 after the expiry of one year shall be made under section 147 after the expiry of one year shall be made under section 147 after the expiry of one year from the end of the financial year in which the notice under from the end of the financial year in which the notice under from the end of the financial year in which the notice under section 148 was served : section 148 was served : Provided that where the notice under section 148 was served that where the notice under section 148 was served that where the notice under section 148 was served on or after the 1st day of April, 1999 but before the ist day of on or after the 1st day of April, 1999 but before the ist day of on or after the 1st day of April, 1999 but before the ist day of April, 2000, such assessment, reassessment or recomputation April, 2000, such assessment, reassessment or recomputation April, 2000, such assessment, reassessment or recomputation may be made at any time up to the 31st day of may be made at any time up to the 31st day of March, 2002 : March, 2002 : Provided further Provided further that where the notice under section 148 that where the notice under section 148 was served on or after the 1st day of April, 2005 but before was served on or after the 1st day of April, 2005 but before was served on or after the 1st day of April, 2005 but before the 1st day of April, 2011, the provisions of this sub the 1st day of April, 2011, the provisions of this sub the 1st day of April, 2011, the provisions of this sub-section shall have effect as if for the words "one year", the words shall have effect as if for the words "one year", the words shall have effect as if for the words "one year", the words "nine months" had been substituted :109 nine months" had been substituted :109
Provided also Provided also that where the notice under section 148 was that where the notice under section 148 was served on or after the 1st day of April, 2006 but before the 1st served on or after the 1st day of April, 2006 but before the 1st served on or after the 1st day of April, 2006 but before the 1st day of April, 2010 and during the course of the proceedings for day of April, 2010 and during the course of the proceedings for day of April, 2010 and during the course of the proceedings for the assessment or reassessment the assessment or reassessment or recomputation of total or recomputation of total income, a reference under sub income, a reference under sub-section (1) of section 92CA section (1) of section 92CA— (i) was made before the 1st day of June, 2007 but an order (i) was made before the 1st day of June, 2007 but an order (i) was made before the 1st day of June, 2007 but an order under sub-section (3) of that section has not be section (3) of that section has not been made before en made before such date; or (ii) is made on or after the 1st d ) is made on or after the 1st day of June, 2007, the ay of June, 2007, the provisions of this sub provisions of this sub-section shall, notwithstanding anything section shall, notwithstanding anything contained in the second proviso, have effect as if for the words contained in the second proviso, have effect as if for the words contained in the second proviso, have effect as if for the words "one year", the words "twenty "one year", the words "twenty-one months" had been one months" had been substituted: Provided also Provided also that where the notice under section 148 was section 148 was served on or after the 1st day of April, 2010 and during the served on or after the 1st day of April, 2010 and during the served on or after the 1st day of April, 2010 and during the course of the proceeding for the assessment or reassessment course of the proceeding for the assessment or reassessment course of the proceeding for the assessment or reassessment or recomputation of total income, a reference under sub or recomputation of total income, a reference under sub or recomputation of total income, a reference under sub-section (1) of section 92CA is made, the provisions of this sub (1) of section 92CA is made, the provisions of this sub (1) of section 92CA is made, the provisions of this sub-section shall, notwithstanding anything contained in the second shall, notwithstanding anything contained in the second shall, notwithstanding anything contained in the second proviso, have effect as if for the words "one year", the words proviso, have effect as if for the words "one year", the words proviso, have effect as if for the words "one year", the words "two years" had been "two years" had been substituted.” 9.1 since in the case a reference under sub section (1) of section 9.1 since in the case a reference under sub section (1) of section 9.1 since in the case a reference under sub section (1) of section 92CA was made and this fac 92CA was made and this fact has not been disputed by the t has not been disputed by the assessee, the limitation for passing the reassessment order extends assessee, the limitation for passing the reassessment order extends assessee, the limitation for passing the reassessment order extends to two years from the end of the financial year in which notice to two years from the end of the financial year in which notice to two years from the end of the financial year in which notice under section 148 was served. Since in the case notice under under section 148 was served. Since in the case notice under under section 148 was served. Since in the case notice under section 148 of the Act was serv section 148 of the Act was served on 30/03/2012, the period of the ed on 30/03/2012, the period of the two years from the two years from the end of the relevant year financial year i.e. financial year i.e. 31/03/2012, expires on 31/03/2014. 31/03/2012, expires on 31/03/2014. Since the reassessment order Since the reassessment order has been passed on 18/03/2014, therefore, the Learned DR has been passed on 18/03/2014, therefore, the Learned DR has been passed on 18/03/2014, therefore, the Learned DR submitted that reassessment order p submitted that reassessment order passed in the case is within the assed in the case is within the limitation period. But the learned counsel for the assessee has limitation period. But the learned counsel for the assessee has limitation period. But the learned counsel for the assessee has referred to the decision of the coordinate bench of the tribunal in referred to the decision of the coordinate bench of the tribunal in referred to the decision of the coordinate bench of the tribunal in the case of Shri Praveen Sawhney (supra), wherein, identical Shri Praveen Sawhney (supra), wherein, identical Shri Praveen Sawhney (supra), wherein, identical reference sent to the Switerzer reference sent to the Switerzerland authorities under DTAA protocol land authorities under DTAA protocol in relation to exchange of information, as when held to be an invalid in relation to exchange of information, as when held to be an invalid in relation to exchange of information, as when held to be an invalid reference as the said protocol was not in operation during the year reference as the said protocol was not in operation during the year reference as the said protocol was not in operation during the year relevant assessment year. The relevant finding of the coordinate relevant assessment year. The relevant finding of the coordinate relevant assessment year. The relevant finding of the coordinate bench (supra) is reproduced as under: reproduced as under:
“14. The aforementioned Notification No. 2903 (E) is loud 14. The aforementioned Notification No. 2903 (E) is loud 14. The aforementioned Notification No. 2903 (E) is loud and clear and has specifically mentioned that Exchange of and clear and has specifically mentioned that Exchange of and clear and has specifically mentioned that Exchange of Information provided for in the said Protocol will be Information provided for in the said Protocol will be Information provided for in the said Protocol will be applicable for information that relates to any fiscal year applicable for information that relates to any fiscal year applicable for information that relates to any fiscal year beginning on or after the 1st day of April 2011 and if the said beginning on or after the 1st day of April 2011 and if the said beginning on or after the 1st day of April 2011 and if the said notification is read with the reference made by the notification is read with the reference made by the notification is read with the reference made by the department, we find that the specific periods for which the department, we find that the specific periods for which the department, we find that the specific periods for which the reference has been made calling for information is 1 reference has been made calling for information is 1- -4-1995 to 31-3-2012. Theref 2012. Therefore, qua the notification, information ore, qua the notification, information called by the Revenue by issuing the said reference was called by the Revenue by issuing the said reference was called by the Revenue by issuing the said reference was invalid for the period prior to 1 invalid for the period prior to 1-4-2011.
A reference to the decisions for analogous provisions can 15. A reference to the decisions for analogous provisions can 15. A reference to the decisions for analogous provisions can throw some light on this issue. The Hon'ble High Court of throw some light on this issue. The Hon'ble High Court of throw some light on this issue. The Hon'ble High Court of Rajasthan was considering the reference for Special Audit Rajasthan was considering the reference for Special Audit Rajasthan was considering the reference for Special Audit u/s 142(2A) of the Act in the case of CIT v. Bajrang Textiles u/s 142(2A) of the Act in the case of CIT v. Bajrang Textiles u/s 142(2A) of the Act in the case of CIT v. Bajrang Textiles [2007] 294 ITR 561 (Raj.) [2007] 294 ITR 561 (Raj.) and held as under : "Direction of the AO for special audit of assessee's ac "Direction of the AO for special audit of assessee's ac "Direction of the AO for special audit of assessee's accounts under s. 142(2A) one day before the expiry of limitation for under s. 142(2A) one day before the expiry of limitation for under s. 142(2A) one day before the expiry of limitation for completing the block assessment being merely to get completing the block assessment being merely to get completing the block assessment being merely to get extension of time and AO having asked the special auditor to extension of time and AO having asked the special auditor to extension of time and AO having asked the special auditor to prepare the books of account in the form of cash book and prepare the books of account in the form of cash book and prepare the books of account in the form of cash book and ledger on the bas ledger on the basis of seized documents/papers and also is of seized documents/papers and also trading and P&L a/c which is apparently beyond the scope trading and P&L a/c which is apparently beyond the scope trading and P&L a/c which is apparently beyond the scope of the provisions of s. 142(2A), the direction for special audit of the provisions of s. 142(2A), the direction for special audit of the provisions of s. 142(2A), the direction for special audit was illegal and consequently, the assessment was barred by was illegal and consequently, the assessment was barred by was illegal and consequently, the assessment was barred by time"
16. Similarly, the Hon'ble All 16. Similarly, the Hon'ble Allahabad High Court in the case of ahabad High Court in the case of Sadana Electric Stores v. CIT Sadana Electric Stores v. CIT [2013] 36 taxmann.com [2013] 36 taxmann.com 286/219 Taxman 294 286/219 Taxman 294 held as under:
"Assessment— —Time limit for completion—Order Order passed passed beyond beyond limitation limitation period period—Sustainability—Assessee Assessee was was subjected to special audit by approval of CIT subjected to special audit by approval of CIT—Assessee was Assessee was asked to obtain special audit report u/s 152(2A) asked to obtain special audit report u/s 152(2A)—Accounts Accounts audited in report was submitted audited in report was submitted— However limitation for However limitation for completion of assessment u/s 153(1)(b) expired completion of assessment u/s 153(1)(b) expired—Assessee Assessee contended that subsequent contended that subsequent assessment order passed by AO assessment order passed by AO was time barred was time barred—Held, in case of Sadana Electric Company Held, in case of Sadana Electric Company vs. Commissioner of Income vs. Commissioner of Income-tax and another tax and another 2008 , 152(2A), identical facts were dealt wherein Court held 2008 , 152(2A), identical facts were dealt wherein Court held 2008 , 152(2A), identical facts were dealt wherein Court held that section 153(1)(a) reads that no order of assess that section 153(1)(a) reads that no order of assessment shall ment shall be made u/s 143 or Section 144 at any time after expiry of be made u/s 143 or Section 144 at any time after expiry of be made u/s 143 or Section 144 at any time after expiry of two years from end of A.Y. in which income was first two years from end of A.Y. in which income was first two years from end of A.Y. in which income was first assessable—Order of assessment had been passed in Order of assessment had been passed in Order of assessment had been passed in violation of period violation of period prescribed in violation of period prescribed in aforesaid prescribed in aforesaid provision, aforesaid provision, provision, therefore, order passed by A therefore, order passed by AO, CIT and ITAT was set aside O, CIT and ITAT was set aside— Therefore order passed by lower authorities including Therefore order passed by lower authorities including Therefore order passed by lower authorities including Tribunal could not be sustained as facts and circumstances Tribunal could not be sustained as facts and circumstances Tribunal could not be sustained as facts and circumstances were identical." were identical."
17. Similar view was taken by the co 17. Similar view was taken by the co-ordinate bench in the ordinate bench in the case of Consulting Engineering Servic case of Consulting Engineering Services India (P.) Ltd. v. ACIT es India (P.) Ltd. v. ACIT [IT Appeal No. 1443 (Delhi) of 2014, dated 5 [IT Appeal No. 1443 (Delhi) of 2014, dated 5-2 2-2019]. Relevant findings read as under: Relevant findings read as under: "15. We have given a thoughtful consideration to the orders of "15. We have given a thoughtful consideration to the orders of "15. We have given a thoughtful consideration to the orders of the authorities below and have carefully perused the records the authorities below and have carefully perused the records the authorities below and have carefully perused the records qua the issue. It qua the issue. It is true that noticed dated 21-11-2011 was 2011 was for both the A.Ys i.e. 2008 for both the A.Ys i.e. 2008-09 and 2009-10. However, each 10. However, each A.Y is considered to be a separate unit and, therefore, for A.Y is considered to be a separate unit and, therefore, for A.Y is considered to be a separate unit and, therefore, for each A.Y, the Assessing Officer must bring out his case. A each A.Y, the Assessing Officer must bring out his case. A each A.Y, the Assessing Officer must bring out his case. A perusal of the said notice, which is perusal of the said notice, which is exhibited at pages 67 to exhibited at pages 67 to 70 of the paper book, clearly reveals that though the notice 70 of the paper book, clearly reveals that though the notice 70 of the paper book, clearly reveals that though the notice pertained to accounts of A.Y 2008 pertained to accounts of A.Y 2008-09, but entire financial 09, but entire financial details referred to therein pertain to A.Y 2009 details referred to therein pertain to A.Y 2009-10. Even the 10. Even the order u/s 142(2A) of the Act dated 27 order u/s 142(2A) of the Act dated 27-12-2011 whic 2011 which is exhibited at pages 91 to 98 of the paper, the ACIT has exhibited at pages 91 to 98 of the paper, the ACIT has exhibited at pages 91 to 98 of the paper, the ACIT has specifically mentioned that "the special audit u/s 142(2A) of specifically mentioned that "the special audit u/s 142(2A) of specifically mentioned that "the special audit u/s 142(2A) of the Act in the case of captioned assessee for A.Y 2009 the Act in the case of captioned assessee for A.Y 2009 the Act in the case of captioned assessee for A.Y 2009-10 is ordered accordingly". This clearly proves that while making a ordered accordingly". This clearly proves that while making a ordered accordingly". This clearly proves that while making a reference u/s 142(2A) of the Act and thereafter passing the /s 142(2A) of the Act and thereafter passing the /s 142(2A) of the Act and thereafter passing the order u/s 142(2A) of the Act, the Assessing Officer did not order u/s 142(2A) of the Act, the Assessing Officer did not order u/s 142(2A) of the Act, the Assessing Officer did not apply his mind and mechanically adopted the figure of A.Y apply his mind and mechanically adopted the figure of A.Y apply his mind and mechanically adopted the figure of A.Y 2009-10 and passed the order u/s 142(2A) of the Act for A.Y 10 and passed the order u/s 142(2A) of the Act for A.Y 10 and passed the order u/s 142(2A) of the Act for A.Y 2009-10 without realizing tha 10 without realizing that he is dealing with A.Y 2008 t he is dealing with A.Y 2008- 09.
The contention of the ld. DR that the letter to the 16. The contention of the ld. DR that the letter to the 16. The contention of the ld. DR that the letter to the appellant referred to both the A.Ys i.e. 2008 appellant referred to both the A.Ys i.e. 2008-09 and 2009 09 and 2009-10 and, therefore, there is no error in the same. We do not find and, therefore, there is no error in the same. We do not find and, therefore, there is no error in the same. We do not find any force in this contention of the ld. DR. any force in this contention of the ld. DR. As mentioned As mentioned elsewhere, since each A.Y is considered as a separate unit elsewhere, since each A.Y is considered as a separate unit elsewhere, since each A.Y is considered as a separate unit the Assessing Officer should have made out a case for A.Y the Assessing Officer should have made out a case for A.Y the Assessing Officer should have made out a case for A.Y 2008-09 only and since the order framed u/s 142(2) of the 09 only and since the order framed u/s 142(2) of the 09 only and since the order framed u/s 142(2) of the Act also refers to A.Y 2009 Act also refers to A.Y 2009-10, then the same cannot be used 10, then the same cannot be used for A.Y 2008-09. 09.
The quarrel before us is as to whether the assessment 17. The quarrel before us is as to whether the assessment 17. The quarrel before us is as to whether the assessment order framed u/s 143(3) is passed within the period of order framed u/s 143(3) is passed within the period of order framed u/s 143(3) is passed within the period of limitation period prescribed under the Act or not. In our limitation period prescribed under the Act or not. In our limitation period prescribed under the Act or not. In our considered opinion, for coming to such a conclusion, we can considered opinion, for coming to such a conclusion, we can considered opinion, for coming to such a conclusion, we can examine whethe examine whether the order passed u/s 142(2A) of the Act is r the order passed u/s 142(2A) of the Act is in accordance with law or not. It is true that the order passed in accordance with law or not. It is true that the order passed in accordance with law or not. It is true that the order passed u/s 142(2A) of the Act is not appealable but when an u/s 142(2A) of the Act is not appealable but when an u/s 142(2A) of the Act is not appealable but when an assessment order is challenged, then the different aspects, assessment order is challenged, then the different aspects, assessment order is challenged, then the different aspects, which are integral to the process which are integral to the process and ultimate completion of and ultimate completion of the amount can be challenged in appeal and since the the amount can be challenged in appeal and since the the amount can be challenged in appeal and since the ground before us is challenged for assessment being barred ground before us is challenged for assessment being barred ground before us is challenged for assessment being barred by limitation, we are well within our rights to consider all by limitation, we are well within our rights to consider all by limitation, we are well within our rights to consider all material aspects which were considered while framing the material aspects which were considered while framing the material aspects which were considered while framing the assessment order u/s 143(3) of the Act." assessment order u/s 143(3) of the Act."
The co-ordinate bench in one of the group cases of ordinate bench in one of the group cases of ordinate bench in one of the group cases of Bhushan Lal Sawhney v. Dy. CIT Bhushan Lal Sawhney v. Dy. CIT [2021] 127 taxmann.com [2021] 127 taxmann.com 64/190 ITD 225 (Delhi 64/190 ITD 225 (Delhi -Trib) through his L/H wife Smt. Sneh through his L/H wife Smt. Sneh Lata Sawhne Lata Sawhney to 432/DEL/2017 & 434 to y to 432/DEL/2017 & 434 to 439/DEL/2017 had the occasion to consider reference to 439/DEL/2017 had the occasion to consider reference to 439/DEL/2017 had the occasion to consider reference to Swiss authority and reply received by Swiss authority. It Swiss authority and reply received by Swiss authority. It Swiss authority and reply received by Swiss authority. It would be pertinent to refer to the said observation of the Co would be pertinent to refer to the said observation of the Co would be pertinent to refer to the said observation of the Co- ordinate Bench which reads as under: ordinate Bench which reads as under: "Learned Counsel for the Assessee also placed on record rned Counsel for the Assessee also placed on record rned Counsel for the Assessee also placed on record letter Dated 26 letter Dated 26-6-2015 issued by Swiss Competent Authority 2015 issued by Swiss Competent Authority addressed to the Government of India in which it is addressed to the Government of India in which it is addressed to the Government of India in which it is specifically mentioned that information as required could be specifically mentioned that information as required could be specifically mentioned that information as required could be provided from F.Y. 2011 provided from F.Y. 2011-2012 as the prior years are not the prior years are not covered by temporal scope of Article 26 of the Amended covered by temporal scope of Article 26 of the Amended covered by temporal scope of Article 26 of the Amended Double Taxation Avoidance Agreement between India and Double Taxation Avoidance Agreement between India and Double Taxation Avoidance Agreement between India and Switzerland. Therefore, such information could be provided Switzerland. Therefore, such information could be provided Switzerland. Therefore, such information could be provided from 1-4-2011. Learned Counsel for the Assessee also placed 2011. Learned Counsel for the Assessee also placed 2011. Learned Counsel for the Assessee also placed on record Notification Dated 27 ecord Notification Dated 27-12-2011 between India and 2011 between India and Switzerland Confederation for avoidance of double taxation. Switzerland Confederation for avoidance of double taxation. Switzerland Confederation for avoidance of double taxation. These would clearly show that these are applicable after These would clearly show that these are applicable after These would clearly show that these are applicable after assessment years under appeals and as per information assessment years under appeals and as per information assessment years under appeals and as per information provided vide letter Dated 26 provided vide letter Dated 26-6-2015 no such information 2015 no such information could be provided prior to 1 could be provided prior to 1-4-2011. Therefore, Swiss 2011. Therefore, Swiss Authorities have not provided any information to Revenue Authorities have not provided any information to Revenue Authorities have not provided any information to Revenue Authorities in India about assessee's bank account with Authorities in India about assessee's bank account with Authorities in India about assessee's bank account with HSBC, Geneva, Switzerland ITA.Nos.427 to 432/Del./2017 HSBC, Geneva, Switzerland ITA.Nos.427 to 432/Del./2017 HSBC, Geneva, Switzerland ITA.Nos.427 to 432/Del./2017 & ITA.Nos.434 to 439/Del./2017 Late Shri Bhushan Lal s.434 to 439/Del./2017 Late Shri Bhushan Lal s.434 to 439/Del./2017 Late Shri Bhushan Lal Sawhney through his L.R./Wife Smt. Sneh Lata Sawhney, Sawhney through his L.R./Wife Smt. Sneh Lata Sawhney, Sawhney through his L.R./Wife Smt. Sneh Lata Sawhney, New Delhi. for assessment years under appeals i.e., A.Ys. New Delhi. for assessment years under appeals i.e., A.Ys. New Delhi. for assessment years under appeals i.e., A.Ys. 2006-2007 to 2011 2007 to 2011-2012."
In light of the aforementioned discussion, we are of the 19. In light of the aforementioned discussion, we are of the 19. In light of the aforementioned discussion, we are of the considered vi considered view that the information called for by the ew that the information called for by the department from Swiss authorities could not have been department from Swiss authorities could not have been department from Swiss authorities could not have been received by them for the period prior to 1 received by them for the period prior to 1-4-2011. Therefore, it 2011. Therefore, it would be a futile exercise to wait for such information, and would be a futile exercise to wait for such information, and would be a futile exercise to wait for such information, and that too, by an invalid reference. that too, by an invalid reference. Therefore, in our considered Therefore, in our considered opinion, the period of limitation could not be extended as opinion, the period of limitation could not be extended as opinion, the period of limitation could not be extended as claimed by the Revenue. The impugned assessments are claimed by the Revenue. The impugned assessments are claimed by the Revenue. The impugned assessments are clearly bared by limitation and deserve to be quashed. clearly bared by limitation and deserve to be quashed. clearly bared by limitation and deserve to be quashed.
Since we have quashed the assessments as barred by 20. Since we have quashed the assessments as barred by 20. Since we have quashed the assessments as barred by limitation, we do not find it necessary to dwell into the merits tation, we do not find it necessary to dwell into the merits tation, we do not find it necessary to dwell into the merits of the case. The common ground in the captioned appeals is of the case. The common ground in the captioned appeals is of the case. The common ground in the captioned appeals is allowed.” 9.2 Fact in the instant case are identical to the facts in the case of Fact in the instant case are identical to the facts in the case of Fact in the instant case are identical to the facts in the case of Shri Praveen Sawhney (supra) as the protocol in relation to the Shri Praveen Sawhney (supra) as the protocol in relatio Shri Praveen Sawhney (supra) as the protocol in relatio exchange of information came into operation from the first day of exchange of information came into operation from the first day of exchange of information came into operation from the first day of April, 2011 whereas the relevant financial year corresponding to the April, 2011 whereas the relevant financial year corresponding to the April, 2011 whereas the relevant financial year corresponding to the assessment year 2007 assessment year 2007-08 is from 01.04.2006 to 31.03.2007 and 08 is from 01.04.2006 to 31.03.2007 and therefore, said protocol therefore, said protocol was not in operation durin operation during the period relevant to the assessment year therefore, this reference which was relevant to the assessment year therefore, this reference which was relevant to the assessment year therefore, this reference which was sent by the AO in the year under consideration was invalid. In view sent by the AO in the year under consideration was invalid. In view sent by the AO in the year under consideration was invalid. In view of precedent in the case of Shri Praveen Sawhney (supra), the re- of precedent in the case of Shri Praveen Sawhney (supra), the of precedent in the case of Shri Praveen Sawhney (supra), the assessment order should have been passed w order should have been passed within one year from ithin one year from the end of the financial year in under section 148 of the Act was the end of the financial year in under section 148 of the Act was the end of the financial year in under section 148 of the Act was served. Since in the case notice under section 148 of the act was served. Since in the case notice under section 148 of the act was served. Since in the case notice under section 148 of the act was served on 30/03/2012 and therefore the reassessment should have served on 30/03/2012 and therefore the reassessment should have served on 30/03/2012 and therefore the reassessment should have been completed on or before 31/03/2013 w been completed on or before 31/03/2013 whereas the assessment hereas the assessment order has been passed on 18/03/2014, which being beyond the order has been passed on 18/03/2014, which being beyond the order has been passed on 18/03/2014, which being beyond the period of limitation, the period of limitation, the entire reassessment proceedings stand entire reassessment proceedings stand quashed. The ground No.2 of the appeal of the assessee is allowed The ground No.2 of the appeal of the assessee is allowed The ground No.2 of the appeal of the assessee is allowed 9.1 The Ld. counsel for the assessee also r The Ld. counsel for the assessee also referred to ground No. 3 eferred to ground No. 3 of the appeal and submitted that on the merit also Co-ordinate of the appeal and submitted that on the merit also Co of the appeal and submitted that on the merit also Co Bench of the Tribunal in the case of ACIT v. Sh. Parminder Singh ACIT v. Sh. Parminder Singh Bench of the Tribunal in th Kalra in Kalra in that addition cannot be made that addition cannot be made simply on the basis of photocopy simply on the basis of photocopy of document indicating balance in indicating balance in bank account without corroboration of the same. The relevant bank account without corroboration of the same. The relevant bank account without corroboration of the same. The relevant finding of the Tribunal finding of the Tribunal (supra) is reproduced as under: is reproduced as under:
“151. We may further point out that it is settled law that 151. We may further point out that it is settled law that 151. We may further point out that it is settled law that statement statement statement cannot cannot cannot be be be read read read in in in isolation isolation isolation without without without any corroborative material. In the present case, we find that there corroborative material. In the present case, we find that there corroborative material. In the present case, we find that there is no evidence placed on record by the AO to corroborate the is no evidence placed on record by the AO to corroborate the is no evidence placed on record by the AO to corroborate the statement. Moreover, the Revenue itself is not clear whether statement. Moreover, the Revenue itself is not clear whether statement. Moreover, the Revenue itself is not clear whether the information pertains to the alleged bank account the information pertains to the alleged bank account the information pertains to the alleged bank account maintained wi maintained with HSBC, Zurich or HSBC, Geneva as is th HSBC, Zurich or HSBC, Geneva as is evident from the paper book filed by the Revenue. No evident from the paper book filed by the Revenue. No evident from the paper book filed by the Revenue. No response has been received in response to the reference response has been received in response to the reference response has been received in response to the reference made to Swiss Competent Authority. No incriminating made to Swiss Competent Authority. No incriminating made to Swiss Competent Authority. No incriminating material whatsoever has been found during the course of t material whatsoever has been found during the course of t material whatsoever has been found during the course of the search. Under the facts and circumstances in our view, the search. Under the facts and circumstances in our view, the search. Under the facts and circumstances in our view, the provisions of Section 69 are not attracted to the assessee in provisions of Section 69 are not attracted to the assessee in provisions of Section 69 are not attracted to the assessee in the instant year. The AO has made the addition on the basis the instant year. The AO has made the addition on the basis the instant year. The AO has made the addition on the basis of suspicion pertains to the bank account. of suspicion pertains to the bank account.
Keeping in view, the ove 152. Keeping in view, the overall facts, we are of the view rall facts, we are of the view that the addition made by the AO in the assessment years that the addition made by the AO in the assessment years that the addition made by the AO in the assessment years 2006-07 and 2007 07 and 2007-08 cannot be sustained. Accordingly, we 08 cannot be sustained. Accordingly, we direct the AO to delete direct the AO to delete the same.”
9.2 In the instant case also, addition has been made on the basis In the instant case also, addition has been made on the basis In the instant case also, addition has been made on the basis of photocopy of a document commonly known as a base note of py of a document commonly known as a base note of py of a document commonly known as a base note of bank account with HSBC Geneva. The said base note was obtained bank account with HSBC Geneva. The said base note was obtained bank account with HSBC Geneva. The said base note was obtained by a nonofficial route by the French government and then same has by a nonofficial route by the French government and then same has by a nonofficial route by the French government and then same has been forwarded to the Indian government. But the existence of said been forwarded to the Indian government. But the existence of said been forwarded to the Indian government. But the existence of said bank account has not been confirmed by the HSBC, Geneva. nt has not been confirmed by the HSBC, Geneva. nt has not been confirmed by the HSBC, Geneva. Therefore following the finding of the coordinate bench of the Therefore following the finding of the coordinate bench of the Therefore following the finding of the coordinate bench of the Tribunal (supra), no addition can be sustained on merit also. Tribunal (supra), no addition can be sustained on merit also. Tribunal (supra), no addition can be sustained on merit also. Since we have already quashed the reassessment proceedings on Since we have already quashed the reassessment proceedings on Since we have already quashed the reassessment proceedings on the ground of limitation in passing assessment order tion in passing assessment order, the addition tion in passing assessment order on merit is rendered merely academic. on merit is rendered merely academic.
In the result, the appeal of the assessee is allowed. In the result, the appeal of the assessee is allowed. In the result, the appeal of the assessee is allowed.