PUSHKAR VISHWAS,BULANDSHAHR vs. INCOME TAX OFFICER WARD 3(3), BULANDSHAHR

1 That the AO was seeking approval under old section 147(a) of the Income Tax Act, 1961 – which had been substituted w.e.f. 01.04.1989 by Direct Tax Laws (Amendment) Act, 1987 and superior authorities failed to ensure whether the AO had verified the AIR information before recording reasons.

Brief facts are that the assessee is an individual and did not file his return of income for the assessment year 2011-12. In this case, AIR information was received that the appellant has made cash deposits aggregating to Rs. 27,73,000/- in his saving bank account maintained with State Bank of India during the FY 2010-11 relevant to AY 2011-12. The assessee failed to explain the source of this cash deposits. Hence, notice u/s. 148 dated 27.3.2018 was issued to the appellant and properly served on him. However, he failed to comply with the notice. Thereafter, notices u/s. 142(1) was issued multiple times. The appellant remained non-compliant to the notices. A final opportunity was provided to the appellant by issuing notices u/s. 144. The appellant again failed to avail himself of these opportunities and did not comply with the notices. Hence, the case was completed exparte under best judgment assessment u/s. 144 of the Act on the basis of facts of the case and material available on records. In the absence of any substantial evidence regarding the source of cash deposit of Rs. 27,73,000/- during the relevant AY, the amount was treated as unexplained income of the appellant. As per bank statement, the appellant received interest during the year under consideration amounting to Rs. 1311/- which was also added to the income of the appellant under the head of income from other sources. The net taxable income assessed u/s. 144/147 of the I.T. Act stands at Rs. 27,74,311/-.

Against the aforesaid action of the AO, assessee preferred the appeal before the Ld. CIT(A). Ld. Upon assessee’s appeal, Ld. CIT(A) dismissed the appeal of the assessee on the juri ictional as well as on merits of the case. 4. Aggrieved with the aforesaid action of the Ld. CIT(A)/NFAC, Delhi, Assessee is in appeal before me. 5. At the time of hearing, Ld. AR has reiterated the grounds of appeal no. 5 to 5.1 and also the submissions made before the authorities below, more particularly that invocation of reassessment proceedings based on non-existing provision of law and also errors in the performa for obtaining approval and mechanical approval by Pr. CIT. 5.1 Per contra, Ld. DR relied upon the order of the Ld. CIT(A)/NFAC and submitted that the same does not require any interference, hence, the same may be confirmed. 6. I have heard rival contentions and perused the relevant records. 6.1 It reveals from records that i.e. Page No. 1-2 of the paper book which is the Form for recording the reasons for initiating proceedings u/s. 148 and for obtaining approval of the Pr. CIT, Ghaziabad for reopening of assessment, in column 7 of the said Form the AO has stated that the provisions applicable for reopening of assessment is section 147(a) of the Act. The ld. Counsel for the assessee submits that the AO has quoted the non-existent provisions for reopening the assessment which shows that there is complete non-existent provision for reopening the assessment which shows that there is complete non application of mind. It is also noted that the provisions of section 147(a) /147(b) have ceased to be in the statute book from 01.04.1989 and mentioning of these incorrect and non-existing sections is clearly a case of non-application of mind by the AO and also by authorities providing sanction u/s. 151 of the Act. Further, it is noted that there is mechanical approval which is mentioned at 4