BHARATBHAI PARSOTTAMBHAI PATEL,MEHSANA vs. ITO, WARD-5, KADI

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ITA 464/AHD/2019Status: DisposedITAT Ahmedabad04 January 2022AY 2011-126 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the approval for reopening the assessment under Section 151 was mechanical and not in accordance with the prescribed procedure. The foundation of the reopening was therefore bad in law, rendering the assessment null and void.

What were the facts?

The Assessing Officer (AO) reopened the assessment of the assessee for AY 2011-12 based on time deposits of Rs. 19,00,000/- in a bank account, as the assessee had not filed a return. The AO added Rs. 17,00,000/- as unexplained investment under Section 69, which was upheld by the CIT(A).

What were the issues?

Whether the reopening of assessment was validly sanctioned as per Section 151 of the Income Tax Act, and if the addition under Section 69 was justified.

Which sections of the Income-tax Act were involved?

Section 69,Section 151,Section 148

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AHMEDABAD “SMC” BENCH, AHMEDABAD

Before: SHRI WASEEM AHMED & Ms. SUCHITRA KAMBLE

For Appellant: Shri Hem Chhajed, CA
For Respondent: Shri R.R. Makwana, Sr. D.R
Hearing: 08.12.2021Pronounced: 04.01.2022

PER SUCHITRA KAMBLE, JUDICIAL MEMBER :

1.

This appeal is filed by the assessee against the order dated 31.01.2019 passed by the CIT(A)-13, Ahmedabad for the Assessment Year 2011-12.

2.

The grounds of appeal raised by the assessee are as under :

“1) The order passed by the Ld. CIT(A) is against the law, equity and justice.

2) The Ld. A.O. has erred in law and on facts in considering transactions shown in books of accounts as unexplained investment by invoking Sec. 69 of the Act.

3) The Ld. A.O. has erred in law and on facts in making addition of Rs.17,00,000/- as unaccounted investment in Bank Account.

4) The reopening of assessment is bad and illegal as no proper sanction as required u/s 151 of the Act is obtained from PCIT.

Page 2 of 6 5) The order passed by the Ld. AO is bad and illegal as the reasons recorded for reopening of assessment and addition made by the Ld. AO are different ground.

6) The Ld. AO has erred in law and on facts in reopening of assessment merely on the basis of deposits in bank account.

7) The appellant craves for liberty to add, amend, alter or modify all or any grounds of appeal before final appeal.”

3.

The assessee has also raised additional grounds of appeal which read as under: Additional Grounds of Appeal “(1) The assessment order passed by Ld. A.O. is bad and illegal as the Ld. A.O. has recorded incorrect reasons for reopening of assessment.

(2) The assessment order passed by Ld. A.O. is bad and illegal as the notice u/s 148 of the Act was issued prior to approval u/s. 151 of the Act.”

4.

The assessee is an individual and deriving income from agricultural income. No return has been filed by the assessee for Assessment Year 2011-12. The Assessing Officer issued reasons dated 24.03.2017 thereby stating as under :

“Reasons recorded for re-opening of assessment in the case of Shri BHARATBHAI PARSOTTAMDAS PATEL, PAN : ARNPP1863A for A.Y. 2011.

In this case, the assessee had not filed any Return of Income for A.Y. 2011.

As per the data available in this office, assessee had made time deposits of Rs.19,00,000/- with BANK OF INDIA. The cash deposits were made during the F.Y. 2010. The assessee did not make any compliance in response to letters issued for clarification of such financial transactions vide dated 25/07/2016 and 23/08/2016. However, despite having such huge amount of time deposits, the assessee had not filed any return of income for the year under consideration. Therefore, income to the extent of Rs.19,00,000/- is not offered to tax. The escapement has occurred on the part of assessee and the income is required to be brought to tax.

In view of the above facts, I have reason to believe that income chargeable to tax has escaped assessment to the extent of Rs.19,00,000/-.

Page 3 of 6 Date:- 24/03/2017

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