SH. BHUSHAN LAL SAWHNEY,NEW DELHI vs. DCIT, NEW DELHI

4 ITA.Nos.427 to 432/Del./2017 & ITA.Nos.434 to 439/Del./2017 Late Shri Bhushan Lal Sawhney through his L.R./ Wife Smt. Sneh Lata Sawhney, New Delhi. with IDxx52687. This account was having a client profile name Bhushan Lal Sawhney and/or Smt. Sneh Lata Sawhney in Client Profile Code xx91436. This information was received from the competent authority under exchange of information framework of DTAC/DTAA between India and France. The A.O. has noted the account details in para 5.1 of the assessment order and noted that assessee had made telephonic conversation with the Officials of HSBC Bank, Geneva. The A.O. further noted that assessee has not declared the above bank account in the return of income and the funds of this account was also not disclosed by the assessee. The explanation of assessee was called for with regard to deposits in this bank account and source of the same was also asked to be explained. The A.O. noted that initially no details have been furnished by the assessee. During the search proceedings, statement under section 132(4) of the I.T. Act of the assessee was recorded, relevant extract of the statement are reproduced in para-5.3 of the assessment order in which A.O. has referred to statement of Son of the Assessee Mr. Praveen Sawhney recorded

5 ITA.Nos.427 to 432/Del./2017 & ITA.Nos.434 to 439/Del./2017 Late Shri Bhushan Lal Sawhney through his L.R./ Wife Smt. Sneh Lata Sawhney, New Delhi. intimating that assessee has maintained bank accounts with HSBC, Geneva, Switzerland, to which, assessee explained that he was wrong in giving this information because assessee has never maintained any bank accounts outside India. The A.O. then referred to statement of Mr. Praveen Sawhney, Son of the Assessee recorded on 28.07.2011 with reference to the bank account maintained with HSBC, Geneva, Switzerland. Later on, statement of assessee was also recorded on 09.11.2015, details of which are noted in the assessment order, to which, assessee denied to have maintained any such bank account. The A.O, however, on the basis of the information received in this matter, made addition of Rs.9,18,54,176/- on account of maximum outstanding balance lying in the bank account maintained with HSBC, Geneva, Switzerland. The A.O, thus, completed the assessment for the A.Y. 2006-2007 under section 153A read with Section 143(3) of the I.T. Act, 1961, vide assessment order Dated 02.03.2015.

6 ITA.Nos.427 to 432/Del./2017 & ITA.Nos.434 to 439/Del./2017 Late Shri Bhushan Lal Sawhney through his L.R./ Wife Smt. Sneh Lata Sawhney, New Delhi. 4.1. It may be noted here that in the remaining A.Ys i.e., 2007-2008 to 2011-2012, the A.O. on the similar basis concluced that since assessee has unexplained bank deposits with HSBC, Geneva, Switzerland in A.Y. 2006- 2007, therefore, in subsequent A.Ys i.e., A.Ys. 2007-2008 to 2011-2012 assessee has earned interest on the same deposits, therefore, addition was made on account of unexplained interest earned on the aforesaid deposits in HSBC Bank, Geneva, Switzerland. The A.O. passed the assessment orders under section 153A read with Section 143(3) of the I.T. Act, 1961, Dated 02.03.2015.

4.2. The assessee challenged the above addition on merits as well as on legal grounds before the Ld. CIT(A), however, the appeals of the assessee have been dismissed.

5.1. We have heard both the the Parties who have also filed written submissions which are also taken into consideration.

8 ITA.Nos.427 to 432/Del./2017 & ITA.Nos.434 to 439/Del./2017 Late Shri Bhushan Lal Sawhney through his L.R./ Wife Smt. Sneh Lata Sawhney, New Delhi. assessment orders passed on 02.03.2015 are barred by limitation because of search took place on 28.07.2011 as mentioned in the assessment orders and thus the limitation to pass assessment orders expire on 31.03.2014 as per Section 153B(1)(a) of the I.T. Act, 1961. But, the impugned orders have been passed on 02.03.2015. The Ld. CIT(A) did not appreciate the above issue. He has submitted that reason of passing the assessment orders Dated 02.03.2015 advanced by the Ld. CIT-DR was that since a reference under section 90 of the I.T. Act, 1961 was made to Swiss Authority and no information was received till the time of passing of the assessment orders, hence, the time limit was extended by one year under Explanation-IX of Section 153B of the I.T. Act, 1961. He has submitted that the Ld. CIT-DR has furnished a letter Dated 26.06.2015 together with information asked for in relation to the assessee received from Swiss Authority. It may be seen that as per A.O’s admitted case, reference was made under section 90 of the I.T. Act, 1961 under the provisions of “Exchange of Information”, Article of Indo-Switzerland Double Taxation

9 ITA.Nos.427 to 432/Del./2017 & ITA.Nos.434 to 439/Del./2017 Late Shri Bhushan Lal Sawhney through his L.R./ Wife Smt. Sneh Lata Sawhney, New Delhi. Avoidance Agreement [DTAA] and such information was required for the period from 01.04.1995 to 31.03.2012 seeking information under the provisions of “Exchange of Information” Article 26 of Indo-Switzerland Double Taxation Avoidance Agreement [DTAA]. He has submitted that the above stated such reference made under section 90 is bad in Law and Revenue could not have made any such reference for seeking information for the period prior to 01.04.2011 and hence such illegal reference could not have been made in Law, could not have lead to extension of time limit for passing the assessment orders. Thus, the time limit in passing the impugned assessment orders in the case of the assessee expired on 31.03.2014 itself. He has further submitted that in fact the Revenue could not have made reference for the period prior to 01.04.2011 which is evident from the following :-

6.1.1. Administrative assistance by Swiss Competent Authority in their letter dated 26th June, 2015

10 ITA.Nos.427 to 432/Del./2017 & ITA.Nos.434 to 439/Del./2017 Late Shri Bhushan Lal Sawhney through his L.R./ Wife Smt. Sneh Lata Sawhney, New Delhi. addressed to Government of India, MOF, FT & TR and filed by Ld. CIT(DR) on 11.1.2021 through email reads as under:

“In accordance with Article 26 DTA CH-IN, administrative assistance for questions concerning the application of domestic law can only be provided for information starting from the financial years 2011/2012 as the prior years are not covered by temporal scope of Article 26 of the amended Double Tax Agreement between India & Swtizerland.

Therefore we can only provide you with information from 1 April 2011 (see decision A-4232/2013 of 12 December 2013 of the Swiss Federal Administrative Court).

6.1.1.2. The Learned Counsel for the Assessee submitted that the Agreement between The Republic of India and The Swiss Confederation for avoidance of double taxation with respect to taxes on income as modified by Notification No.S.O.2903(E) Dated

11 ITA.Nos.427 to 432/Del./2017 & ITA.Nos.434 to 439/Del./2017 Late Shri Bhushan Lal Sawhney through his L.R./ Wife Smt. Sneh Lata Sawhney, New Delhi. 27.12.2011. Copy of Notification No.S.O.2903(E) Dated 27.12.2011together with amended protocol filed to show it apply to later period. Therefore, reliance is placed on the following judicial decisions which hold that if the Reference based upon which the limitation is sought to be extended is held bad, limitation so extended would also be bad in law. :-

6.1.2. The ITAT, Pune Bench, Pune in the case of ITO vs. Vilsons Particle Board Industries Ltd., ITA.No.447/PN/2013, dated 21.12.2016 (Pune) in which it was held as under :

“41. Applying the principles laid down by the Apex Court in Sahara India (Firm) Vs. CIT and Another (supra), we hold that where no show cause notice was given to the assessee before making the order proposing conduct of special audit under section 142(2A) of the Act, in the present case and the CIT having approved the said proposal though

12 ITA.Nos.427 to 432/Del./2017 & ITA.Nos.434 to 439/Del./2017 Late Shri Bhushan Lal Sawhney through his L.R./ Wife Smt. Sneh Lata Sawhney, New Delhi. after giving opportunity of hearing to the assessee is vitiated because of non-compliance with the principles of natural justice. Accordingly, the assessment order passed in the facts of present case is beyond the period of limitation and hence, the same is invalid and bad in law ”

6.1.3. The ITAT, Delhi Benches, Delhi in the case of PHI Seeds Ltd. vs. DCIT, (2015) 45 CCH 318 held as under:

“7.4. In the present proceedings what we are examining, is whether the extended period of limitation as provided under Explanation l(iii) of Section 153 is available to the Assessing Officer for completion of assessmen t u/s 143(3), or not. The assessee contends that the order u/s 142(2C), extending the period granted for completion and submission of audit report is made without an application being made for extension by the assessee

13 ITA.Nos.427 to 432/Del./2017 & ITA.Nos.434 to 439/Del./2017 Late Shri Bhushan Lal Sawhney through his L.R./ Wife Smt. Sneh Lata Sawhney, New Delhi. and for any good and sufficient reason, and hence the extension is bad in law and hence the A.O would not get the benefit of the extended period of time to specified in Explanation l(iii) of Section 153 of the Act. In our view, the Tribunal has jurisdiction to adjudicate the issue as to whether an order of assessment 143(3), is passed within the period of limitation prescribed under the Act or not. For coming to such a conclusion, in our view the Tribunal can examine whether the order passed u/s 142(2A) or u/s 142(2C) is in accordance with law or not. The order passed u/s 142(2A) or u/s 142(2C) cannot be appealed separately. But when an assessment order is challenged, then the different aspects which are integral to the process and ultimate completion of amount can be challenged in Appeal. For example a notice u/s 148 or reasons recorded by the A. O prior to re-opening of assessment cannot be challenged separately. But an assessment order can be challenged in an Appeal before the Ld. CIT(A) or the 14 ITA.Nos.427 to 432/Del./2017 & ITA.Nos.434 to 439/Del./2017 Late Shri Bhushan Lal Sawhney through his L.R./ Wife Smt. Sneh Lata Sawhney, New Delhi. ITAT on the ground that the re-opening itself is bad in law, as the notice is illegal or not served or that there is no material based on which reasons were recorded etc. Every facet of an assessment can be challenged in appeal to deny once liability to be charged to tax or to challeng the quantum of tax demanded. In the case of hand, the legality of the orders passed u/s 142 (2A) or u/s 142(2C) can be challenged to demonstrate that the order of assessment has been passed beyond the period of limitation. Thus, we reject this contention of the Ld. CIT. DR.

8. In view of the above, discussion, we have no hesitation in holding to hold that the extension of time framed by the A.O for submission of audit report u/s 142 (2C) of the Act vide order dated 28th June, 2004 is bad in law. Consequently the Assessing Officer would not get extension of time for completion of assessment in terms of Explanation 1 (iii) to Section 153 for the purpose of computation of limits. Hence,

15 ITA.Nos.427 to 432/Del./2017 & ITA.Nos.434 to 439/Del./2017 Late Shri Bhushan Lal Sawhney through his L.R./ Wife Smt. Sneh Lata Sawhney, New Delhi. the assessments are barred by limitation as per the table given at Para 7 of the order. The Assessment for the A. Y1996-97 was to be complete on or before 31/3/2004 and the assessment order for the Assessment Year 1997-98 to 2000-01 had to be completed on or before 22/9/2004 and the assessment for the A. Y 2001-02 had to be completes on or before 23/8/2004, but all these assessments were completed on 27/9/2004, which is beyond the period of limitation specific in the Act. Hence they are bad in law.”

6.1.4. The ITAT, Delhi Bench, Delhi in the case of Consulting Engineering Services India Pvt. Ltd. & Anr. vs. Asstt. CIT & Anr., reported in (2019) 198 TTJ 0121 (Del) held as under :

“15. We have given a thoughtful consideration to the orders of the authorities below and have carefully perused the records qua the issue. It is true that noticed dated 21.11.2011 was for both the A.Ys

16 ITA.Nos.427 to 432/Del./2017 & ITA.Nos.434 to 439/Del./2017 Late Shri Bhushan Lal Sawhney through his L.R./ Wife Smt. Sneh Lata Sawhney, New Delhi. i.e. 2008-09 and 2009- 10. However, each A.Y is considered to be a separate unit and, therefore, for each A. Y, the Assessing Officer must bring out his case. A perusal of the said notice, which is exhibited at pages 67 to 70 of the paper book, clearly reveals that though the notice pertained to accounts of A.Y. 2008-09, but entire financial details referred to therein pertain to A.Y 2009-10. Even the order u/s 142(2A) of the Act dated 27.12.2011 which is exhibited at pages 91 to 98 of the paper, the ACIT has specifically mentioned that "the special audit u/s 142(2A) of the Act in the case of captioned assessee for A.Y 2009-10 is ordered accordingly". This clearly proves that while making a reference u/s 142(2A) of the Act and thereafter passing the order u/s 142(2A) of the Act, the Assessing Officer did not 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 2009-10 without realising that he is dealing with A.Y 2008-09.

17 ITA.Nos.427 to 432/Del./2017 & ITA.Nos.434 to 439/Del./2017 Late Shri Bhushan Lal Sawhney through his L.R./ Wife Smt. Sneh Lata Sawhney, New Delhi.

6.1.5. In the case of Sunder Exports vs. DCIT, reported in (2009) 126 TTJ 0853) (Del), the ITAT, Delhi Bench held as under :

“Assessment—Limitation—Extension of limitation under Explanation l(iii) to s. 153—As per the proviso to s. 142(2C) as applicable during the relevant asst. yr. 2003- 04, the AO can extend the time for furnishing of report under s. 142(2A) only on an application made by the asses see— Assessee having made no such application, AO erred in extending the time for filing such report on the application of the auditor and, therefore, the assessment order passed by the AO after receiving the audit report was barred by limitation.”

19 ITA.Nos.427 to 432/Del./2017 & ITA.Nos.434 to 439/Del./2017 Late Shri Bhushan Lal Sawhney through his L.R./ Wife Smt. Sneh Lata Sawhney, New Delhi. 6.1.6. In the case of DCIT vs. Ramachandra Dashrath Hande & Co., reported in (2010) 36DTR 0431 (Mum), the ITAT, Mumbai Bench, Mumbai held as under :

“Assessment—Limitation—Extension of limitation under Expln.-1 (iii) to s. 153 - Prior to amendment in s.142(2C), the AO had no power to suo motu extend the period for furnishing the report by special auditor and therefore excluding such period, assessment was barred by limitation- further, the IT Act being a specific Act, the General Clauses Act may not generally apply to the limitation period. ”

6.1.7. The Hon’ble High Court of Rajasthan in the case of CIT vs., Bajrang Textiles reported in [2007] 294 ITR 561 (Raj.) (HC), it was held as under:

“Direction of the AO for special audit of assessee’s accounts under s. 142(2A) one day before the expiry of limitation for completing the block assessment being merely to get extension of time and AO having asked the special auditor to prepare the books of account in 20 ITA.Nos.427 to 432/Del./2017 & ITA.Nos.434 to 439/Del./2017 Late Shri Bhushan Lal Sawhney through his L.R./ Wife Smt. Sneh Lata Sawhney, New Delhi. the form of cash book and ledger on the basis of seized documents/papers and also trading and P&L a/c which is apparently beyond the scope of the provisions of s. 142(2A), the direction for special audit was illegal and consequently, the assessment was barred by time ”

6.1.8. In the case of Sadana Electric Stores vs. CIT, reported in (2013) 219 Taxman 0294 (All) it was held as under :

“Assessment—Time limit for completion— Order passed beyond limitation period—Sustainability-Assessee was subjected to special audit by approval of CIT— Assessee was asked to obtain special audit report u/s 152(2A)—Accounts audited in report was submitted— However limitation for completion of assessment u/s 153(l)(b) expired—Assessee contended that subsequent assessment order passed by AO was time barred— Held, in case of Sadana Electric Company vs. Commissioner of Income Tax and another ITA.No. 167 2008, 152(2A), identical facts were dealt wherein Court

21 ITA.Nos.427 to 432/Del./2017 & ITA.Nos.434 to 439/Del./2017 Late Shri Bhushan Lal Sawhney through his L.R./ Wife Smt. Sneh Lata Sawhney, New Delhi. held that section 153(1)(a) reads that no order of assessment shall 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 assessable—Order of assessment had been passed in violation of period prescribed in aforesaid provision, therefore, order passed by AO, CIT and ITAT was set aside—Therefore order passed by lower authorities including Tribunal could not be sustained as facts and circumstances were identical”

6.1.9. In the case of IPF India Property Cyprus (No. I) Ltd. vs. DCIT, (also reported in (2020) 183 ITD 0046) (Mum), the ITAT Mumbai Bench, Mumbai held as under :

“7. Coming to the second point, we find that there is no dispute that if no draft assessment order was to be issued in this case, the assessment would have been time barred on 31st December 2017 but the 22 ITA.Nos.427 to 432/Del./2017 & ITA.Nos.434 to 439/Del./2017 Late Shri Bhushan Lal Sawhney through his L.R./ Wife Smt. Sneh Lata Sawhney, New Delhi. present assessment order is passed on 17th August 2018. Once we hold that no draft assessment order could have been issued in this case, as the provisions of Section 144C(1) could not have been invoked in this case, the time limit of completion of assessment was available only upto 31st December 2017. The mere issuance of draft assessment order, when it was legally not required to be issued, cannot end up enhancing the time limit for completing the assessment under section 143(3). We, therefore, uphold the plea of the assessee on this point as well. The impugned assessment order is indeed, in our considered view, time barred. We, accordingly, hold so.”

6.1.10. The Learned Counsel for the Assessee further submitted that in under-mentioned cases the Hon’ble Courts have held that restraint order under section 132(3) was bad and such bad restraint order cannot give authority to extend the limit under section 158BE of the I.T. Act, 1961.

23 ITA.Nos.427 to 432/Del./2017 & ITA.Nos.434 to 439/Del./2017 Late Shri Bhushan Lal Sawhney through his L.R./ Wife Smt. Sneh Lata Sawhney, New Delhi. Late D.T.S. Rao through L/H D.S. Manjunath 1. vs.Asstt. CIT, (2007) 106 ITD 570 (Bang) 2. Rakesh Sarin vs. DCIT, (201 1) 333 ITR 451 (Mad) 3. S.K. Katyal through L/H Mrs. Ranjana Katyal vs. DCIT, (2007) 111 TTJ 0008 (Del) 4. CIT vs. S.K. Katyal, (2009) 308 ITR 168 (Del) 5. Golderest Finance (India) Ltd. vs. DCIT, (2006) 105 TTJ 926 (Mum) 6. CIT vs. Pawan Kumar Garg, (2011) 334 ITR 240 6.1.11. Learned Counsel for the Assessee, therefore, submitted that since no information could have been provided for assessment years under appeals i.e., 2006- 2007 to 2011-2012 and the protocol also started from 01.04.2011, therefore, no reference could be made by the Revenue Authorities for assessment years under appeals i.e., 2006-2007 to 2011-2012. The Reference is, therefore, invalid and no limitation could have been extended to pass the assessment orders after 31.03.2014. He has, therefore, submitted that limitation extended on the basis of such Reference which could not have been made in Law in the instant case for the period prior to 01.04.2011 i.e., for A.Ys. 2006-2007 to 2011-2012 is bad and impugned assessment orders are barred by limitation.

24 ITA.Nos.427 to 432/Del./2017 & ITA.Nos.434 to 439/Del./2017 Late Shri Bhushan Lal Sawhney through his L.R./ Wife Smt. Sneh Lata Sawhney, New Delhi. 6.1.12. Learned Counsel for the Assessee has also submitted that the assumption of jurisdiction under section 153A of the I.T Act, 1961 for assessment years under appeals is also bad in Law when there was no incriminating material found as a result of search relevant to assessment years under appeals. In support of his contention he has relied upon Judgments of Hon’ble Delhi High Court in the case of CIT vs., Kabul Chawla reported in 380 ITR 573 (Del.) and Pr. CIT vs., Meeta Gut Gutia reported in 395 ITR 526 (Del.) in which the Departmental SLP have been dismissed by the Hon’ble Supreme Court reported in 96 taxmann.com 468 (SC). He has also referred to panchanama executed in the case of assessee which did not find mention any incriminating material relevant to any assessment years under appeals which could be the basis for making any addition. He has, therefore, submitted that since no incriminating material was found in assessment year under appeals, therefore, no addition could be made against the assessee. Learned Counsel for the Assessee again by referring to the above evidences submitted that since no 25 ITA.Nos.427 to 432/Del./2017 & ITA.Nos.434 to 439/Del./2017 Late Shri Bhushan Lal Sawhney through his L.R./ Wife Smt. Sneh Lata Sawhney, New Delhi. information could have been provided by the Swiss Authorities to the Revenue Authorities in India for assessment years under appeals, therefore, no incriminating evidence was found to show that additions are based on any incriminating material. Learned Counsel for the Assessee also submitted that assessee since the very beginning has denied to have maintained any bank accounts with HSBC, Geneva, Switzerland. Therefore, onus is upon the A.O. to prove by specific and reliable evidence that assessee maintained any such bank account. Therefore, in the absence of any evidence or material on record against the assessee, even the addition on merit are without any basis. The additions on account of notional interest are based on mere suspicion and as such no addition could be made.

27 ITA.Nos.427 to 432/Del./2017 & ITA.Nos.434 to 439/Del./2017 Late Shri Bhushan Lal Sawhney through his L.R./ Wife Smt. Sneh Lata Sawhney, New Delhi. Annexure-A1 of Party-SR-1 was found and seized during the course of search proceedings at the residence of the assessee which reflects details of Swiss Bank Account which document was confronted to the assessee, but, assessee did not reveal any information. The Ld. D.R, therefore, submitted that addition have been rightly made in the case of the assessee and decisions of the Hon’ble Delhi High Court in the cases of Kabul Chawla (supra) and Meeta Gut Gutia (supra) are not applicable in this case.

28 ITA.Nos.427 to 432/Del./2017 & ITA.Nos.434 to 439/Del./2017 Late Shri Bhushan Lal Sawhney through his L.R./ Wife Smt. Sneh Lata Sawhney, New Delhi. letter of the A.O. Dated 22.08.2019 in which it is clearly mentioned by the A.O. that last panchanama was drawn on Dated 26.09.2011. Learned Counsel for the Assessee also placed on record letter Dated 26.06.2015 issued by Swiss Competent Authority addressed to the Government of India in which it is specifically mentioned that information as required could be provided from F.Y. 2011-2012 as the prior years are not covered by temporal scope of Article 26 of the Amended Double Taxation Avoidance Agreement between India and Switzerland. Therefore, such information could be provided from 01.04.2011. Learned Counsel for the Assessee also placed on record Notification Dated 27.12.2011 between India and Switzerland Confederation for avoidance of double taxation. These would clearly show that these are applicable after assessment years under appeals and as per information provided vide letter Dated 26.06.2015 no such information could be provided prior to 01.04.2011. Therefore, Swiss Authorities have not provided any information to Revenue Authorities in India about assessee’s bank account with HSBC, Geneva, Switzerland

29 ITA.Nos.427 to 432/Del./2017 & ITA.Nos.434 to 439/Del./2017 Late Shri Bhushan Lal Sawhney through his L.R./ Wife Smt. Sneh Lata Sawhney, New Delhi. for assessment years under appeals i.e., A.Ys. 2006-2007 to 2011-2012. Thus, there is no incriminating material available on record to make any addition in any assessment years. It may also be noted here that assessee since the very beginning denied to have maintained any such bank accounts with HSBC, Geneva, Switzerland. There is no material available on record that assessee made deposits in HSBC Bank A/c in A.Y. 2006-2007 or thereafter earned any interest in remaining assessment years under appeals.

8.1. Considering the totality of the facts and circumstances of the case above, it is also clear that during the course of search no incriminating material was found against the assessee for maintaining any such bank accounts with HSBC, Geneva, Switzerland. Whatever information was supplied by the Swiss Authorities subsequently to the Revenue Authorities in India, no such information was provided for the period prior to 01.04.2011. Therefore, it is clear that no information have been provided by the Swiss Authorities

30 ITA.Nos.427 to 432/Del./2017 & ITA.Nos.434 to 439/Del./2017 Late Shri Bhushan Lal Sawhney through his L.R./ Wife Smt. Sneh Lata Sawhney, New Delhi. that assessee maintained any bank account with HSBC, Geneva, Switzerland in assessment years under appeals i.e., 2006-2007 to 2011-2012. Therefore, it is clear that no incriminating material was found against the assessee so as to make any addition against the assessee. The Hon’ble Delhi High Court in the case of CIT vs., Kabul Chawla (supra) held as under :

“vii. Completed assessments can be interfered with by the A.O. while making the assessment under section 153A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment” 8.2. The Hon'ble Delhi High Court in its recent decision in the case of Pr. CIT vs. Meeta Gutgutia (supra) in paras 69 to 72 has held as under :

31 ITA.Nos.427 to 432/Del./2017 & ITA.Nos.434 to 439/Del./2017 Late Shri Bhushan Lal Sawhney through his L.R./ Wife Smt. Sneh Lata Sawhney, New Delhi. “69. What weighed with the Court in the above decision was the “habitual concealing of income and indulging in clandestine operations” and that a person indulging in such activities “can hardly be accepted to maintain meticulous books or records for long.” These factors are absent in the present case. There was no justification at all for the AO to proceed on surmises and estimates without there being any incriminating material qua the AY for which he sought to make additions of franchisee commission.

Conclusion

(i) Question (i) is answered in the negative i.e., in favour of the Assessee and against the Revenue. It is held that in the facts and circumstances, the Revenue was not justified in invoking Section 153 A of the Act against the Assessee in relation to AYs 2000-01 to AYs 2003-04.”

8.2.1. The above Judgment is confirmed by the Hon’ble Supreme Court by dismissing the SLP of the Department. Therefore, on this reason alone no addition could be made of any unexplained bank deposits or interest earned thereon in any of the assessment years. In view of the above, we set aside the Orders of the authorities below and delete the entire additions. In view of the above, there is no need to decide the remaining grounds of appeals which 33 ITA.Nos.427 to 432/Del./2017 & ITA.Nos.434 to 439/Del./2017 Late Shri Bhushan Lal Sawhney through his L.R./ Wife Smt. Sneh Lata Sawhney, New Delhi. are left with academic discussion only. Accordingly, all the appeals of the Assessee are allowed. 9. In the result, all the appeals of the Assessee are allowed.

ITA.Nos.434 to 439/Del./2017 – A.Ys 2006-07 to 2011-12:

“21. The Respondent had challenged the upholding of the penalty imposed under Section 271(1) (c) of the Act, which was accepted by the ITAT. It followed the decision of the Karnataka High Court in CIT v. Manjunatha Cotton & Ginning Factory 359 ITR 565 (Kar) and observed that the notice issued by the AO would be bad in law if it did not specify which limb of Section 271(1) (c) the penalty proceedings had been initiated under i.e. whether for concealment of particulars of income or for furnishing of inaccurate particulars of income. The Karnataka High Court had followed the above judgment in the subsequent order in Commissioner of Income Tax v. SSA’s Emerald