SEEMA SINGH,ASANSOL vs. ITO, WARD1(1), ASANSOL

This appeal filed by the assessee is against the order of Ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi dated 28.01.2024 for AY 2018-19.

At the time of hearing Ld. Counsel for the assessee pressed on the legal issue challenging the order passed u/s. 147 read with section 144 of the Act dated 09.01.2023 which has been wrongly affirmed by Ld. CIT(A).

Ld. Counsel for the assessee submitted before the Bench that notice u/s. 148A(b) dated 12.03.2022 was issued by ITO, Ward-1(1), Asansol. Ld. AR submitted that in the said notice the AO noted that as per information received from Insight portal of the Department assessee has not filed her return of income for AY 2018-19 despite the assessee receiving following payments:

The Ld. DR, on the other hand, strongly opposed that the assessee did not appear either before the AO or before the Ld. CIT and, therefore, for the first time wrecking this legal issue of borrowed satisfaction and non-application of mind by the AO to the facts on record which should not be allowed and the matter may be restored to the AO or Ld. CIT(A) for necessary verification of facts.

Ld. AR in the rebuttal submitted that assessee is free to raise legal issue at any appellate stage and does not sine qua non restore the same to the lower authorities for the reason that the issue was not before them or was not adjudicated during the course of proceedings before them. The Ld. AR, therefore, submitted that the legal issue can be raised by the assessee at any stage and the appellate authority has to decide the same and the same should not be relegated to the AO or the Ld. CIT(A). The Ld. AR in defense of

After hearing the rival contentions and perusing the material placed before us, we find that the undisputed facts as presented before us and are culled from the records are that the notice u/s. 148A(b) dated 12.03.2022 was issued wherein the AO stated that the assessee received certain payments as stated hereinabove are despite that the assessee has not filed any return of income. Thereafter, the order u/s. 148(d) dated 24.03.2022 was passed by the AO by holding that the income chargeable to tax has escaped to the tune of Rs.39,86,50,000/- and accordingly, notice u/s. 148 was issued on 24.03.2022. There is no dispute as to the facts that the facts mentioned by the AO in all its notices were incorrect and finally the addition was made only to the tune of Rs.38.38 lacs u/s. 69 and Rs.49,50,000/- u/s. 50C of the Act. Apparently, the AO has merely acted on the basis of information available on the Insight portal and there was no application of mind by the AO. Thus, in our opinion, it is a case of gross non-application of mind and borrowed satisfaction which is not permissible under the Act. In our opinion, the tax authorities have to be extra vigilant while reopening the cases by due application of mind as by way of reopening already settled assessment are thrown upon to the scrutiny by the department and in case the reopening passed on such incorrect facts are allowed to be made then the very purpose of safeguard provided to the assessee against the wrong invocation of jurisdiction which is not otherwise authorized under the Act would be defeated per se in our opinion, the first reopening made by the AO in the instant case is bad in law. The case of the assessee finds support from the aforesaid decision passed by the various judicial forums namely, Meenakshi Overseas Pvt. Ltd., M/s. Insecticides (India) Ltd., CIT Vs. SFIL Stock Broking Ltd. and Kansai Nerolac Paints Ltd. (supra). Therefore, we are inclined to set aside the order of Ld. CIT(A) by quashing the reassessment proceedings. 7 In the result, the appeal of the assessee is allowed. Order is pronounced in the open court on 12th September, 2024 Sd/- Sd/- (Pradip Kumar Choubey) (Rajesh Kumar) Judicial Member Accountant Member Dated: 12th September, 2024 JD, Sr. PS