2023 (6) TMI 917 - AT - Income Tax

Reopening of assessment u/s 147 - objections regarding reason to believe raised first time at appellate stage - information available on ITS data that assessee has made cash deposit in bank account with ICICI Bank - HELD THAT - Agra Tribunal in the case of Sapna Chauhan 2019 (8) TMI 227 - ITAT AGRA while considering similar objection of revenue that if such objection was not raised before the Assessing Officer and which cannot be taken at the appellate stage, held that question of jurisdiction is not a matter of acquiescence the proprietary of notice under section 148 based upon reasons recorded is not dependent upon the objection or no objection of the assessee at the stage of assessment / re-assessment if reasons recorded, independently can withstand the test of judicial scrutiny only such reasons will confer jurisdiction to issue notice and frame assessment in pursuance thereto. If reasons recorded upon being challenged at any stage of proceedings falls to withstand the test of judicial scrutiny, in that eventuality, upon such recorded reasons no valid notice can be issued and any assessment framed consequent thereto even taking shelter of no objection from the assessee could save the assessment from being held to be declared void-ab-initio and the objection of Revenue was rejected. Thus the basis of reasons recorded is erroneous and factually wrong and not a valid reason. Thus, all subsequent action initiated thereto is void-ab- initio. Ground of assessee appeal is allowed.

Issues Involved:
1. Ex-parte order by NFAC/Ld. CIT(A).
2. Validity of reopening the case under section 148.
3. Addition of Rs. 23,63,650/- as unexplained money under section 69.
4. Addition of Rs. 4,26,470/- as unexplained credits.
5. Addition of Rs. 1,527/- as undisclosed bank interest.

Summary:

Ex-parte Order by NFAC/Ld. CIT(A):
The assessee argued that the NFAC/Ld. CIT(A) erred in passing the appellate order on an ex-parte basis, despite detailed submissions in Form No.35. The Tribunal noted that the NFAC/Ld. CIT(A) should have considered these submissions before passing the order.

Validity of Reopening the Case Under Section 148:
The assessee contended that the reopening of the case by issuing a notice under section 148 was based on incorrect information that no return of income was filed for the assessment year 2012-13. The Tribunal found that the assessee had indeed filed the return on 30.03.2012, and the reasons recorded for reopening were erroneous and factually incorrect. Consequently, the Tribunal held that the reopening was not valid and all subsequent actions were void-ab-initio.

Addition of Rs. 23,63,650/- as Unexplained Money Under Section 69:
The Tribunal observed that the assessee explained the cash deposits as withdrawals from his bank account on various dates. However, the Assessing Officer did not accept this explanation and made the addition. Given the invalidity of the reopening, the Tribunal did not need to adjudicate further on this ground.

Addition of Rs. 4,26,470/- as Unexplained Credits:
The Assessing Officer added Rs. 4,26,470/- as unexplained credits in the assessee's bank account. The Tribunal noted that the assessee failed to substantiate the nature and source of these credits during the assessment. However, due to the invalid reopening, this ground also became academic.

Addition of Rs. 1,527/- as Undisclosed Bank Interest:
The Assessing Officer added Rs. 1,527/- as undisclosed bank interest. The Tribunal did not need to address this addition separately due to the invalidity of the reopening.

Conclusion:
The Tribunal allowed the appeal of the assessee, finding the reopening of the assessment invalid and void-ab-initio. Consequently, all other grounds of appeal became academic and were not adjudicated. The order was pronounced on 29/05/2023 in open court.

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