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Income Tax Appellate Tribunal, PUNE BENCH “A”, PUNE
Before: SHRI R. K. PANDA & SHRI VINAY BHAMORE
ORDER
PER VINAY BHAMORE, JM:
This appeal is filed by the assessee assailing the order dated 08.11.2023 passed by LD CIT(A) [‘NFAC’] for the assessment year 2014-15.
The appellant raised the following grounds of appeal :- “I. Legality & Validity of Reassessment Proceeding;
1. On the facts and in law, the re-assessment proceeding initiated by the Ld. Assessing Officer under Section 147 of the Act is bad in law as the same is based on suspicious and incorrect information. Hence, as the formation of belief is based on incorrect, suspicious and vague facts same is unsus tainable in eye of law.
2. On the facts and in law, there is serious jurisdictional requirement in the reasons recorded by the Assessing Officer as he Ganesh Shankar Pujare failed to discharge the burden put on him by proviso to Section 147 of the Act by not specifying what was a failure of the Appellant to disclose the primary facts in regular assessment which was completed under Section 143(3) of the Act as Notice under Section 148 dated 31.03.2021 was issued beyond 4 years from the end of the A.Y. 2014-15.
3. On the facts and in law, Ld. Assessing Officer has recorded wrong facts in the reasons which clearly indicate that the Ld. Assessing Officer has failed to apply his mind to the facts on record for formation of “belief’. Hence, the reasons recorded suffer from non-application of mind which is impermissible in law and in consequence the Notice issued under Section 148 of the Act dated 31/03/2021 is bad in law.
4. On the facts and in law, the Sanctioning Authority seriously erred in giving approval under Section 151 of the Act to the proposal sent by the Assessing Officer as prima facie incorrect information was given in proposal and it indicate mechanically granting of sanction/approval without due application of mind. Hence, mechanically giving approval under Section 151 of the Act by Authority is serious jurisdictional requirement and on this ground a notice issued by the Assessing Officer under Section 148 of the Act without jurisdictional, bad in law and needs to be quashed.
On the facts and in law, failure of the approval giving Authority under Section 151 to apply his mind and to examine the proposal sent by the Assessing Officer and also to verify “tangible material” on record before giving approval for issuing Notice under Section 148 of the Act vitiate entire reassessment proceeding as per well settled principles of law.
On the facts and in law, the Ld. Assessing Officer erred in invoking power under Section 147 of the Act merely on basis of information on alleged “suspicious transactions” can’t be equated with tangible material for invoking powers under Section 147 of the Act. Hence, Notice issued under Section 148 of the Act, merely on basis of suspicion do not prima facie make out case of “reason to believe” that any income chargeable to tax has escaped assessment within meaning of Section 147 of the Act. Therefore, the impugned Notice under Section 148 dated 31/03/2021 is bad in law.
On the facts and in law, Ld. Assessing Officer failed in his duty to carry out independent enquiry to verify information received. Hence, on basis of information received for alleged suspicious transactions initiation of reassessment proceeding under Section 147 of the Act, without independent enquiry is unsustainable in eye of law as there is no independent application of mind by the Assessing Officer.
Ganesh Shankar Pujare 8. On the facts and in law, fishing and rowing enquiry in garb of finding some escape income is not permissible to initiate reassessment proceeding under Section 147 of the Act. That as per reasons recorded by Ld. A. O., information only on alleged suspicious transactions in Bank account, without mentioning name of a Bank, is given as justification which cannot be equated with expression “reason to belief’ as contemplated in Section 147 of the Act.
On the facts and in the circumstances of the case and in law, the learned Assessing Officer has erred in issuing notice under Section 148 of the Act for making fishing and roving enquiry as the reason recorded by Assessing Officer do not indicate formation of belief based on any “tangible material” that income chargeable to tax has escaped assessment within meaning of Section 147 of the Act. Hence, the impugned notice under Section 148 of the Act is bad in law. II. Grounds on Merit 10. On the facts and in law, Ex-parte order passed by the Ld. CIT(A) confirming high pitched addition made by the Assessing Officer is unsustainable and bad in law as there is no proper compliance of Section 282 and Section 282A of the Income Tax Act and hence, impugned Order deserved to be quashed and set aside.
On the facts and in law, impugned Order of the Ld. CIT(A) is bad in law as the same is passed mechanically by dismissing Appellant’s appeal for alleged non-prosecution, without dealing with merits of the case.
On the facts and in law, the addition made by the Assessing Officer and confirmed by the Ld. CIT(A) under Section 69A of the Act, 1961 is unsustainable as same is not based on any money, jewellery, bullion or any valuable articles were found and owned by the Appellant. Ld. CIT(A) ought to have appreciated scope of Section 69A which is specifically incorporated to deal with cases where actual money, bullion, jewellery and other valuable articles are found and owned by the Assessee. Hence, on this ground alone entire addition needs to be deleted.
The appellant craves, leave to add to alter, modify, revise, or delete any ground (s) in the interest of justice.”
Briefly, the facts of the case are that the appellant is an individual & filed his return of income on 01.07.2015 declaring total income of Rs.5,25,060/-. The case was selected for limited Ganesh Shankar Pujare scrutiny under CASS & after notice was issued u/s 142(1) & 143(2), orders were passed u/s 143(3) on 30-11-2016 raising NIL Demand. Thereafter on receipt of the information from the Investigation Wing of the Department that the assessee had received credit entries in the form of cash deposits as well as cash credits amounting to Rs.22,59,99,616/- during the previous year relevant to the assessment year under consideration. After recording reasons the Assessing Officer reopened the case & issued notice u/s 148 of the Income Tax Act, 1961 (‘the Act’) on 31.03.2021. However, no compliance was made by the assessee in response to the said notice. Subsequently, the Assessing Officer issued notice u/s 142(1) of the Act on 10.11.2021 and 21.11.2021 asking the assessee to submit the details such as nature of his business activities, copy of audit report, trading/profit & loss account, balance sheet etc and also to explain the source of cash deposits/credits. However, no response was offered by the assessee in reply to such notices. AO provided various opportunities to the assessee but the assessee didn’t file reply. Since the assessee did not respond to statutory notices despite several opportunities granted by the AO, the AO completed the assessment u/s 144/147 of the Act re-determining the total income Ganesh Shankar Pujare of the Assessee at Rs.22,65,24,680/- by making addition of Rs.22,59,99,616/- as unexplained income u/s 69A of the IT Act.
Since the assessee did not file any submission, Ld CIT(A) NFAC confirmed the addition made by the AO & passed the impugned order dt. 08-11-2023.
5. Aggrieved by the decision of the LD CIT(A) NFAC, the appellant is in appeal before this Tribunal.
6. We have heard Ld counsels from both the sides & perused the material on record. We find that the appellant did not appear before the AO despite several opportunities granted by the AO & since the assessee did not file any submission before the CIT(A) NFAC, he also passed orders ex-parte. It is observed that due to non appearance of the assessee before the AO as well as before the CIT(A) they were compelled to make addition & sustain the same in the absence of proper & relevant documents & explanation from the side of the assessee, due to which these orders were passed ex-parte. It is true that the appellant assessee is only responsible for this non compliance. But at the same time to meet the ends of natural justice we deem it proper to provide a reasonable opportunity of being heard to the appellant assessee so that he can substantiate his claim by furnishing relevant documents &