SHRI ALOK GUPTA,NEW DELHI vs. ITO, NEW DELHI

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ITA 2865/DEL/2015Status: DisposedITAT Delhi09 May 2017AY 2005-064 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 Assessing Officer's reasons for reopening the assessment did not establish a 'reason to believe' that income chargeable to tax had escaped assessment, as required by Section 147. The reasons only stated a need for scrutiny due to expired limitation.

What were the facts?

The assessee filed a return of income, but AIR information revealed a cash deposit of Rs. 14,14,000/- in their bank account which was not reflected in the return. A notice under Section 148 was issued to reopen the assessment.

What were the issues?

Whether the reopening of assessment under Section 147/148 was valid when the Assessing Officer failed to record a 'reason to believe' that income had escaped assessment, and instead cited expired scrutiny limitations.

Which sections of the Income-tax Act were involved?

Section 147,Section 148

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH - ‘SMC’ NEW DELHI

Before: SHRI BHAVNESH SAINI

Hearing: 04/05/2017

Per BHAVNESH SAINI, Judicial Member

1.

ORDER This appeal by assessee has been directed against the order of Ld. CIT(A) – 18, New Delhi dated 19th March, 2015 for assessment. Year 2005-06 challenging reopening of assessment u/s 147/148 of I.T. Act and additions of Rs. 14,14,000/- and Rs. 32,59,000/- with interest u/s 234B of Act.

2.

Brief facts of the case are that assessee filed return of income on 31st July, 2005 declaring income of Rs. 3,07,850/-. Information was received through AIR regarding deposit of Rs. 14,14,000/- in bank account of assessee with Central Bank of India. Since the transaction was not reflected in the return of income notice u/s 148 was issued on 22nd May, 2008 and served upon assessee.

3.

The Assessing Officer framed reassessment order and made the additions on account of unexplained deposit with Central Bank of India and unexplained receipt while computing the income at Rs. 49,80,850/- .Ld. CIT(A) dismissed the appeal of assessee.

4.

The assessee challenged the reopening of the assessment as well as additions on merit in the present appeal.

5.

I have heard Ld. Representative of both the parties and perused the material on record. The validity of reassessment proceedings is to be determined on the basis of reasons recorded for reopening of assessment. Assessee has filed copy of reasons recorded for reopening of assessment at page 34 of paper book. The same reads as under :-

“Shri Alok Gupta Assessment. Year 2005-06 “An AIR information was received from the DAO Ward 31(4)/DAO 45 with the information that the assessee Shri Alok Gupta (AANPG.4929-K) has deposited a cash of Rs. 14,14,000/- during the year i.e. assessment. Year 2005-06 (Central Bank of India).

The information was received in this office only on 6.5.2008.

Since the limitation of this case for making/scrutiny/verification has already been expired on 31/12/2007 therefore in order to verify the genuineness of the transaction, the case is required to be re-opened by issuing a notice u/s 148 of the I.T. Act, 1961.

I am fully satisfied that action is required to take the case for scrutiny for the assessment year 2005-06 therefore notice u/s 148 is issued.”

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