2023 (9) TMI 153 - AT - Income Tax

Validity of reopening of assessment - Cash deposit unexplained - HELD THAT - The assessee furnished return of income in response to notice u/s 148 and that ultimately no addition on account of cash deposit in bank account was made. Before us assessee explained that there is no new deposit in the bank and that deposits in the bank belongs to Shree Swaminarayan Seva Trust which is source from the proceeds of old FDs. On perusal of record of various bank statements, find merit in the submission of assessee that the reopening for the assessment year under consideration is the same which was the basis for A.Y. 2009-10 wherein the department has already accepted and no addition was made on the basis of similar reasons of reopening. The only difference in facts are that for this year, the assessing officer made reopening by recording that the assessee made time deposits in bank account. Therefore, reopening under Section 147 of the Act on the basis of similar reasons, which was the basis of earlier assessment year (2009-10), is not justified, particularly when the assessing officer was satisfied and nor addition was made. Thus, the reopening u/s 147 is invalid and the assessment order passed by the Assessing Officer is held void ab initio. Decided in favour of assessee.

Summary

Issues Involved:
1. Condonation of delay in filing the appeal.
2. Validity of reopening assessment under Section 147 of the Income Tax Act.
3. Merits of additions made under Section 69 of the Income Tax Act.

Condonation of Delay:
The Tribunal addressed the delay of 43 days in filing the appeal. The assessee, a Sanyasi associated with Shree Swaminarayan Seva Gurukul Trust, cited heavy rain and water logging as reasons for the delay. The Tribunal found no intentional or deliberate delay and condoned the delay to serve substantial justice.

Validity of Reopening Assessment:
The assessee challenged the reopening of the assessment under Section 147 and the issuance of notice under Section 148. The Tribunal noted that the assessee had objected to the reopening from the beginning and had raised similar grounds before the CIT(A). The Tribunal admitted the additional ground of appeal, finding that the facts required for adjudication were already on record and no new facts needed to be brought.

Merits of Additions:
The Tribunal considered the merits of the additions made under Section 69. The assessee argued that the same issue of cash deposits, which was the basis for reopening the assessment for A.Y. 2009-10, had been accepted after detailed investigation, and no new deposits were made in the current assessment year. The Tribunal found merit in the assessee's submission that the deposits belonged to Shree Swaminarayan Seva Trust and were sourced from old FDs. The Tribunal concluded that the reopening under Section 147 was invalid and held the assessment order void ab initio. Consequently, the assessee succeeded on merit as well.

Conclusion:
The appeal of the assessee was allowed, and the additions made by the Assessing Officer were set aside. The Tribunal announced the order in open court on 30th August 2023.