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Income Tax Appellate Tribunal, CHANDIGARH BENCH, ‘A’, CHANDIGARH
Before: SHRI A.D. JAIN & DR KRINWANT SAHAY
�नधा�रती क� ओर से/Assessee by : Sh. Dhruv Goel, C.A. राज�व क� ओर से/ Revenue by : Smt. Amanpreet Kaur, Sr.DR सुनवाई क� तार�ख/Date of Hearing : 09.05.2024 उदघोषणा क� तार�ख/Date of Pronouncement : 15.05.2024 आदेश/Order Per Dr. Krinwant Sahay, A.M.:
The appeal in this case has been filed by the Assessee against the order dated 10.10.2022 of the ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi, on the following grounds: -
1. On the facts and circumstances of the case, the order passed by Ld. CIT(A) is bad both in eyes of law and on facts.
2. That the Ld. AO erred in recording the reasons for re- opening of assessment without application of mind.
450-Chd-2023 – Gunjan Arora, Yamunanagar 2 2.1 That the Ld. CIT(A) has erred in law and on facts by ignoring the fact that cash deposits to which such Increase in the capital account has accrued have already been accounted for in the books of accounts and duly offered for tax.
3. That the Ld. CIT(A) has erred in law and on facts by confirming the addition of Rs. 23,24,000/- made by the Ld. AO vide assessment order dated 12.12.2018 on account of alleged unexplained income u/s 69 of the Income Tax.
4. That the Ld. CIT(A) has erred in law and on facts in not considering the return of income in the light of a submission of the appellant.
5. That the Ld. CIT(A) has erred in law and on facts in not providing appellant with the reasonable opportunity of being heard.
6. That the appellant reserves the right to add, modify, alter, amend or delete any of the grounds.
2. It is a case of delayed filing of appeal by 215 days. During the proceedings before us, the ld. Counsel of the Assessee brought it on record as under:-
The appeal against the order of the CIT(A), NFAC, passed under section 250 of the Act, dated 10.10.2022 was filed within the stipulated time period, vide Form 36 dated 29.11.2022 before the Hon'ble ITAT, Delhi.
That the filing of the appeal before the Hon'ble ITAT, Delhi was due to the fact that there was an inadvertent error in treating of the address of the 450-Chd-2023 – Gunjan Arora, Yamunanagar 3
assessee to be of the Yamuna Vihar situated in Delhi as opposed to the one situated in Haryana. 3. That the matter came up for hearing before the Hon'ble ITAT, Delhi, on 14.06.2023, and the Ld. DR pointed out the jurisdictional defect and the Hon'ble Bench granted liberty to the appellant to file an appeal before the jurisdictional! bench of the Tribunal.
We have considered the reasoning for the delayed filing of the appeal before the Chandigarh Bench of the Tribunal and we find that the Assessee was prevented by genuine reason for delayed filing of the appeal. The ld. DR did not object to this condonation of delay. Accordingly, the delay is condoned and we proceed to hear the appeal on merits.
During the course of hearing before us, the ld. Counsel for the Assessee raised the issue of reopening of assessment u/s 148 and he challenged it on the ground that the assessment was reopened without making any verification and application of mind by the Assessing Officer as it is evident from the wrong amount / figure mentioned in the grounds for taking action u/s 148 of the Act. In the very assessment order, the Assessing Officer has mentioned the reasons for taking action u/s 148 of the Act as under:-
450-Chd-2023 – Gunjan Arora, Yamunanagar 4
"3. On verification from the ITS, it is seen that the assessee has made cash deposit of Rs. 43,99,000/- with ICICI Bank Ltd during FY 2010-11 relevant to AY 2011-12"
Notice u/s 148 for re-opening of the assessment was issued on 28.3.2018. The Assessing Officer has further recorded in the assessment order as under:-
"Information u/s 133(6) of the Income Tax Act 1961 has been called for from the ICICI Bank Ltd on 5.7.2018. Reply from the same bank has been received in this office on 1.8.2018 which is placed on record. On perusal of the bank account statement submitted from concerned bank, it is noticed that assessee has made cash deposits of Rs. 23,24,000/- instead of Rs. 43,99,000"
The ld. Counsel further argued that from the above it is quite obvious that the Assessing Officer had recorded the reasons to believe on the basis of the incorrect facts while reopening of the assessment. The Assessing Officer had made no independent inquiry /verification even from the bank before reopening of the case, although the entire satisfaction or reasons for reopening of the case was based on cash deposits in the bank only. The ld. Counsel relied on the judgments of various authorities some of them are as follows: -
450-Chd-2023 – Gunjan Arora, Yamunanagar 5
“Kind attention is invited to following decisions where it has been held that reopening on incorrect facts renders the reassessment notice bad in law and without jurisdiction: • Hon'ble Jurisdictional High Court in case of CIT vs Atlas Cycle Industries [1989] 180 ITR 319 held that where the grounds on which reassessment notice was not found to exist, the AO did not get jurisdiction to make reassessment. • Hon'ble Chandigarh ITAT Bench in case of JMD Astrological Consultancy Services Pvt Ltd, ITA 849/CHD/2011, Baba Kartar Singh Dukki Educational Trust, ITA 444/CHD/2014, Monika Rani, ITA 582/CHD/2019, quashed the reassessment proceedings when the reopening was found to be done on basis of non-existent and factually incorrect reasons and it was held that AO did not apply his mind before recording the reasons. • Hon'ble Delhi ITAT Bench in entirely identical case in Late Ganpat Singh ITA 2880/DEL/2019 where in reasons cash deposits was mentioned as Rs. 36.98 lakhs however actual deposits found to be Rs. 16.98 lakhs in assessment order. Hon'ble bench held that reasons were recorded without application of mind and the same made the reopening of assessment to be null and void.”
The ld. DR brought it on record that although the figures given in the reasons for reopening of the assessment u/s 148 of the Act was wrongly mentioned as Rs. 43,99,000/- instead of Rs. 23,24,000/- however, when the Assessing Officer detected this mistake on the basis of bank statement, he made addition of Rs.
450-Chd-2023 – Gunjan Arora, Yamunanagar 6 23,24,000 only. The ld. Counsel of the Assessee further argued that it is not the question of making correction on the issue of reasons to believe for reopening of the assessment rather it is a case of action taken u/s 148 of the I.T. Act, 1961 without making any enquiry and proper application of mind by the Assessing Officer.
We have considered the arguments put forward by the ld. Counsel of the Assessee as well as ld. DR. There is no denying that the action u/s 148 has been taken by the Assessing Officer on the basis of information received from the AIR / CIB /NMS. We see that the findings of the Chandigarh Bench in the case of ‘JMB Astrological Consultancy Services Pvt. Ltd.’, (supra) and ITAT Delhi Bench in the case of ‘Late Ganpat Singh’, ITA 2880/EL/2019 (supra) along with the Hon'ble jurisdictional High Court in the case of ‘CIT vs. Atlas Cycle Industries’, (supra), it is clear that if the reasons recorded for reopening of the assessment u/s 148 are found to be incorrect, it may be construed as the action by the Assessing Officer for reopening of the case u/s 148 of the Act has been taken without any enquiry and proper application of mind which are pre-requisite for reopening of any case u/s 148 of the I.T. Act, 1961. As these requirements in this case have not been made and the reopening u/s 148 has been done on wrong amount and 450-Chd-2023 – Gunjan Arora, Yamunanagar 7 figure as no enquiry was made before issuance of notice u/s 148 of the Act, therefore, the entire process for reopening of the case is vitiated by this shortcoming. Accordingly, the reopening itself is quashed. Needless to say, the assessment framed on the basis of reopening is void. Thus, the appeal of the Assessee stands allowed.
In the result, the appeal of the Assessee is allowed.
Order pronounced on 15.05.2024.