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Income Tax Appellate Tribunal, DELHI BENCHES “SMC” : DELHI
Before: SHRI BHAVNESH SAINI
Date of Hearing : 21.05.2018 Date of Pronouncement : 01.06.2018 ORDER
This appeal by assessee has been directed against the order of the Ld. CIT(A)-16, New Delhi, dated 06th March, 2017, for the A.Y. 2007-2008.
Briefly, the facts of the case are that in this case notice under section 148 for reopening of the assessment was issued on 21.02.2014 after obtaining the approval of JCIT, New Delhi. The assessee in response to the notice, filed return of 2 ITA.No.3177/Del./2017 Shri Abrar Ahmad Qasimi, New Delhi.
income declaring income of Rs.99,200/-. During the year, assessee had declared salary income only. The reasons for reopening of the assessment have been provided to the assessee. The assessee was asked to explain nature of source of entry of Rs.14,75,000/- in S.B. account of the assessee. The A.O. noted that assessee has not filed satisfactory explanation regarding cash deposit in Axis Bank, therefore, it was treated as unexplained deposit under section 69A of the I.T. Act and made the addition of Rs.14,75,000.
The assessee challenged the above addition before Ld. CIT(A) and it was submitted that assessee is Maulvi for Arabic Religious and Teacher and teaching Arabic in the Masjid.
He has prestige in the society and trustworthy in the community. People coming to him for pious purposes, giving money for safe deposit and take back whenever required. The assessee deposited the amount in bank account which was later on withdrawn and returned to them. Assessee gets salary from Waqf Board, Delhi.
3 ITA.No.3177/Del./2017 Shri Abrar Ahmad Qasimi, New Delhi.
At the appellate stage, assessee was asked to produce lenders for their statements. The assessee produced some of the persons at the appellate stage. Their statements were recorded in which they have confirmed to have given amounts to the assessee. Ld. CIT(A), however, do not accept the contention of assessee because lenders are not having enough money and that they themselves have bank account, therefore, there were no reason to deposit amount in the bank account of the assessee. Appeal of the assessee has been dismissed.
The assessee in the present appeal challenged the reopening of the assessment as well as addition of Rs.14,75,000/-. Learned Counsel for the Assessee submitted that assessee obtained reasons for reopening of the assessment under RTI Act, 2005, copy of which is filed on record, in which, A.O. has recorded reasons for reopening of the assessment. The same reads as under :
“As per information available in ITD System of the Income
Tax Department, Sh Abrar Ahmad Qasimi during the 4 ITA.No.3177/Del./2017 Shri Abrar Ahmad Qasimi, New Delhi. financial year 2006-07 relevant to A.Y. 2007-08 has made cash deposit of Rs.14,75,000/- in saving bank account. The assessee has not filed Tax return for A.Y. 2007-08. After examination of information available in ITD system by independent application of mind, I have reason to believe that income of Rs.14,75,000/-for Financial Year 2006-07 relevant to Assessment Year 2007 -08 has escaped assessment with in meaning of sec 147 of Income Tax Act,
1961. The case for assessment year 2007 -08 is taken up for assessment u/s. 147 of I.Tax Act, 1961.”
5.1. He has submitted that mere deposit of the cash in the bank account is not sufficient to believe that income chargeable to tax has escaped assessment, therefore, reopening of the assessment is bad in law. It was submitted that the issue is covered in favour of assessee by order of ITAT, SMC-Bench in the case of Shri Arvind Yadav vs. ITO, Ward-1(1), New Delhi ITA.No.1508/Del./2017 for the A.Y. 2008-2009, Dated 07.07.2017, in which the Tribunal on identical facts, set aside
5 ITA.No.3177/Del./2017 Shri Abrar Ahmad Qasimi, New Delhi. the orders of the authorities below and quashed the reopening of the assessment vide order dated 07.07.2017. Copy of the order is placed on record.
Ld. D.R. relied upon the orders of the authorities below.
After considering rival submissions, I am of the view that reopening of the assessment is bad in law. The A.O. merely noted in the reasons that since there is an information available on ITD System of the Department that assessee has made cash deposits of Rs.14,75,000/- in his Bank Account, therefore, income chargeable to tax has escaped assessment. The ITAT, Delhi Bench in the case of Shri Arvind Yadav (supra) considering the identical facts held that the deposit in the bank account per se cannot be the income of the assessee. This is a mere suspicion of the A.O. based on incorrect fact that income chargeable to tax has escaped assessment and accordingly, quashed the reopening of the assessment. The findings of the Tribunal in para 8 of the Order are reproduced as under :
6 ITA.No.3177/Del./2017 Shri Abrar Ahmad Qasimi, New Delhi.
“8. In this case the Assessing Officer after obtaining the AIR information wanted to verify the same and issued a letter of enquiry to the assessee. The Assessing Officer thus did not apply his independent mind to the information received from AIR. Since no proceedings were pending before the Assessing
Officer when he issued a letter of enquiry to the assessee, therefore, such enquiry letter was not valid in eyes of law.
Therefore, the assessee was not required to respond to invalid letter of enquiry issued by the Assessing Officer. The Assessing
Officer in the absence of reply of the assessee presumed that cash deposited in the bank account has escaped assessment.
The deposit in the bank account per se cannot be income of the assessee. It is mere suspicion of the Assessing Officer based on incorrect fact that income chargeable to tax has escaped assessment. The issue is therefore covered in favour of assessee