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2018 (10) TMI 1584 - AT - Income TaxReopening of assessment u/s 147 r.w.s. 148 - reopening based on information of Investigation wing - non independent application of mind by A0 - capitalization fee received - Held that - It is significant to note that the information received by the AO was neither unspecific nor general nor vague and it referred to the direct transaction of capitation fee paid in cash by the guardian of assessee s son to Santosh Medical College. Not only this, the AO was in possession of documentary evidences seized in the search, i.e., ledger account of Santosh Medical college, the statements of principal person of the Institute admitting receipt of capitation fee during the year under consideration and the letter of ADIT, Investigation Wing as referred to in the assessment order. This information contains the name of the person, from whom the capitation fee was received along with their addresses, date of payments, name of the course pursued, which establishes a live link between the recipient of the cash payments and the payer thereof. Once, the receipt of cash payments towards capitation fee stood established by documentary evidences and statements of the recipient, it was incumbent upon the assessee to explain and establish by cogent evidence that no such payment was made by it. However, there is no evidence to this effect on record. In presence of such a specific information and tangible material in possession of the Assessing Officer, in our considered view, the Assessing Officer was justified to form a prima facie belief or opinion that income chargeable to tax in the hands of the assessee had escaped assessment. Thus, the contention of the assessee that there was no application of mind, does not sound good. Assessing Officer has tried its best to justify the impugned addition. The assessee in his statements, side tracking the explanation to explain the source an nature of payment stated that the payments towards fee etc. for his son s admission was made by his father-inlaw, Shri Jile Singh Bhati and Shri Jile Singh Bhati in his statements stated that he did not remember payment of capitation fee, but admitted payment of only ₹ 4.18 lacs. The statements of both the assessee and his father-in-law nowhere go to belie the factum of payment of capitation fee. Even no evidence regarding admitted payment of regular fee was also laid before the Assessing Officer. In such state of affairs, in our opinion, there is no infirmity in the conclusions reached by the authorities below. Contention of assessee regarding reopening of case without proper service of notice u/s. 148 - notices, summons etc. so issued to the assessee at the given address admittedly stood served upon the assessee either through the tenant or through his brother. The assessee, when appeared before the Assessing Officer itself had shown copies of three letters issued by the Assessing Officer on 23.03.15, 26.03.15 and 09.07.15, which included the notice u/s. 148. We, therefore, find that this contention of the assessee does not stand proved nor does it render any help to the assessee. Reopening without seeking proper sanction - evident from record that no assessment of assessee was made u/s. 143(3). The assessee did not file even a return u/s. 139 for this year. Therefore, the case of assessee does not come within the reach of subsection (1). In Sub-sec. (2), there is restriction without sanction of competent authority for the issuance of notice beyond the period of four years from the end of relevant assessment year, which too is not applicable in the instant case, as the notice u/s. 148 has been issued within the period of four years. In presence of these facts, the decisions relied by the ld. AR on this issue are not applicable to the present case. - Decided against assessee.
Issues Involved:
1. Validity of the reassessment proceedings under Section 147/148. 2. Jurisdiction of the Assessing Officer to issue notice under Section 148. 3. Proper service of notice under Section 148. 4. Application of mind by the Assessing Officer in recording reasons for reopening. 5. Sanction for issuance of notice under Section 151. 6. Merits of the addition of ?23,00,000 under Section 69C. Detailed Analysis: 1. Validity of the reassessment proceedings under Section 147/148: The assessee challenged the reassessment proceedings on multiple grounds, including the lack of proper service of notice, non-application of mind by the Assessing Officer, and the absence of sanction from the competent authority. The Tribunal found that the information received by the Assessing Officer was specific and detailed, containing the name, address, and payment details related to the capitation fee. The Tribunal held that the Assessing Officer had a prima facie reason to believe that income had escaped assessment, justifying the reopening of the case under Section 147. 2. Jurisdiction of the Assessing Officer to issue notice under Section 148: The assessee contended that the notice under Section 148 was issued without jurisdiction. The Tribunal noted that the address used by the Assessing Officer was the last available address provided by the assessee during the admission of his son to the medical college. The Tribunal held that the assessee did not question the jurisdiction of the Assessing Officer during the assessment proceedings and thus could not challenge it at the appellate stage. 3. Proper service of notice under Section 148: The assessee argued that the notice was not properly served. The Tribunal found that the notice was sent to the last available address and was received by the tenant, who handed it over to the assessee's brother. The Tribunal concluded that the notice was duly served, as the assessee appeared before the Assessing Officer and participated in the proceedings. 4. Application of mind by the Assessing Officer in recording reasons for reopening: The assessee claimed that the Assessing Officer did not independently apply his mind and merely relied on the information from the Investigation Wing. The Tribunal observed that the information received was specific and detailed, and the Assessing Officer had recorded reasons based on this information. The Tribunal held that the Assessing Officer had applied his mind and formed a prima facie belief that income had escaped assessment, thus justifying the reopening. 5. Sanction for issuance of notice under Section 151: The assessee contended that no proper sanction was obtained under Section 151 before issuing the notice under Section 148. The Tribunal found that the notice was issued within the period of four years from the end of the relevant assessment year, and thus, the requirement for sanction under Section 151(2) did not apply. The Tribunal held that the decisions relied upon by the assessee on this issue were not applicable to the present case. 6. Merits of the addition of ?23,00,000 under Section 69C: The assessee did not argue on the merits of the addition. The Tribunal noted that the assessee and his father-in-law did not provide any evidence to disprove the payment of capitation fee. The Tribunal found no infirmity in the conclusions reached by the authorities below and upheld the addition of ?23,00,000 under Section 69C. Conclusion: The Tribunal dismissed the appeal, holding that the reassessment proceedings were valid, the notice under Section 148 was properly served, and the Assessing Officer had applied his mind in recording reasons for reopening. The Tribunal also upheld the addition of ?23,00,000 under Section 69C.
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