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Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD
Before: SMT.ANNAPURNA GUPTA
(Applicant) (Responent) Assesseeby : Shri Kishan Mehta, AR : Shri N.J. Vyas, Sr.DR Revenue by सुनवाई क� तार�ख/Date of Hearing : 18/01/2024 घोषणा क� तार�ख /Date of Pronouncement: 24/01/2024 आदेश/O R D E R The present appeal has been filed by the assessee against order passed by the Commissioner of Income Tax(Appeals), National Faceless Appeal Centre, Delhi [in short referred to as ld.CIT(A)] under section 250(6)of the Income Tax Act, 1961 dated 20.6.2018 pertaining to Asst.Year 2011-12.
The grounds raised by the assessee are not in consonance with the Rule 8 of the Income Tax (Appellate Tribunal) Rules, 1993, and is blend of descriptive and argumentative in nature. A perusal of the grounds reveals that the only grievance raised by the assessee is against the order passed under section 147 of the Act being without jurisdiction and bad in law. The same is figured out in ground no.3 which reads as under:
2 “That on facts and in law the AO has no reason to believe that income chargeable to tax has escaped assessment u/s.147 of the IT Act and therefore assuming of jurisdiction and issuance of notice 148 of the IT Act is without jurisdiction and bad in law.”
The facts relating to the present appeal are that the assessment was reopened under section 147 of the Act on the basis of the information available with the AO that the assessee had made donation to Chennai based trust in cash amounting to Rs.10 lakhs, which information was obtained during survey in the case of M/s.Kalavati Finance Ltd. This amount was accordingly treated as unexplained expenditure incurred by the assessee and added to the income of the assessee. The assessee has challenged the order of the ld.CIT(A) confirming the above addition, raising both legal grounds as well as grounds relating to the merits of the case, which was reflected in ground no.3 and reproduced hereinabove.
Copy of the reasons for reopening of the case of assessment under section 147 of the Act were produced before us which reads as under:
Referring to the same, the ld.counsel for the assessee contended that the only information in the possession of the AO was that of the assessee having made donation of Rs.10 lakhs in cash to Chennai based trust vis. Shri Jindutt-Kusalsuri Khartar Gachha Pedi; that merely on this information, the AO formed the belief that the payment in cash was made out of the books of accountsof the assessee, and therefore, the income to this extent has escaped assessment. He stated that there is no live nexus between the information in the possession of the AO and formation of belief of escapementof income, and therefore, reopening resorted to was beyond the jurisdiction of the AO. The ld.DR however stated that there was sufficient information in the possession of the AO for formation of belief of escapement of income.
Having heard both the parties, and having gone through the reasons for reopening the case of the assessee for the impugned
4 year, copy of which was placed before me, and which is reproduced above, I am in complete agreement with the ld.counsel for the assessee that there was no nexus between the information in the possession of the AO and the formation of belief of escapement of income. As is evident from the bare reading of the reasons, the information in the possession of the AO was that the assessee had paid Rs.10 lakhs in cash to atrust in Chennai. Thereafter in para-4 of the reasons the AO arrives at a conclusion that this donation in cash was out of the books of the assessee. There is no mention of the AO having referred to the books of the assessee, and arriving at this conclusion. It is not clear as to how the AO arrives at this conclusion. There is, I agree no live link between the information in the possession of the AO and the formation of belief of escapement of income. I, therefore agree with the Ld.Counsel for the assessee that the AO had no basis for believing the escapement of income to the tune of Rs.10 lakhs so as to assume a valid jurisdiction under section 147 of the Act to reopen the case of the assessee. The order, as a consequence,passed under section 147 of the Act , I hold ,is not valid, and thereforeis set aside.
In the result, the appeal of the assessee is allowed in above terms.
Order pronounced in the Court on 24th January, 2024 at Ahmedabad.