2012 (11) TMI 1336 - AT - Income Tax

Summary

Issues:
- Validity of notice u/s 148 of the Income-tax Act, 1961
- Nexus between facts of the case and reasons for reopening the case u/s 148
- Genuineness of gift received
- Charging of interest u/s 234B, 234C, 244A(3) & 234D

Analysis:

Validity of Notice u/s 148:
The appeal arose from the order of the CIT(A) for the assessment year 2001-02. The appellant contended that the notice u/s 148 issued by the Assessing Officer (AO) was illegal, invalid, and void ab-initio. The appellant argued that the conditions laid down under section 148 were not fulfilled, rendering the order bad in law. The appellant also claimed that there was no nexus between the facts of the case and the reasons recorded for reopening the case, making the notice illegal. The Tribunal held that the AO did not have any material or had wrong material to suggest that the appellant's income had escaped assessment. Consequently, the Tribunal quashed the reassessment proceedings, deeming the notice issued u/s 148 as bad in law.

Genuineness of Gift Received:
The appellant received a gift through a banking channel, supported by a counter-signed gift deed from the donor. The AO added the gift amount to the appellant's income, citing non-discharge of burden of proof regarding the genuineness of the gift. However, the Tribunal noted that the AO did not disprove the gift deed filed by the appellant. Relying on the decision of the Supreme Court in Mehta Parikh & Co. vs. CIT, the Tribunal found that the notice issued u/s 148 was bad in law. The Tribunal allowed all grounds related to the issue of the gift received.

Charging of Interest u/s 234B, 234C, 244A(3) & 234D:
The appellant argued that no interest should have been charged under the specified sections of the Income Tax Act, 1961, as no reasonable opportunity of being heard was allowed before charging the interest. The Tribunal, however, held that the charging of interest under these sections was mandatory and consequential in nature. Therefore, the Tribunal did not find grounds to cancel the interest charged under the mentioned sections.

In conclusion, the Tribunal allowed the appeal of the assessee, quashed the reassessment proceedings due to the invalid notice u/s 148, upheld the genuineness of the gift received, and maintained the charging of interest under the specified sections of the Income Tax Act, 1961.