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TMI Blog2016 (10) TMI 310X X X X Extracts X X X X X X X X Extracts X X X X ..... . information was received from DIT(Systems) in respect of ₹ 2,29,806/- being received from HSBC Bank. The reassessment proceedings were completed against the assessee to explain the deposit of ₹ 2,29,806/- on 31.03.2007, whereas AIR information was in respect of amount received from HSBC Bank. On this ground also, reassessment proceedings completed against the assessee are bad in law and invalid. - Decided in favour of assessee - ITA No. 201/PN/2016 - - - Dated:- 8-7-2016 - Ms. Sushma Chowla, JM Appellant by : Shri Neelesh Khandelwal Respondent by : Shri Anil Chaware ORDER Per Sushma Chowla, JM This appeal filed by the assessee is against the order of CIT(A)-2, Pune, dated 09.10.2015 relating to assessment year 2007-08 against order passed under section 143(3) of the Income-tax Act, 1961 (in short the Act ). 2. The assessee has raised the following grounds of appeal:- 1. The case of your Appellant was selected for scrutiny on the basis of AIR data for depositing ₹ 2,29,806/- in Hong Kong Shanghai Banking Corporation Ltd ONLY. The addition made on this account in to the saving bank account and disallowances of Professional Expen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see is against invoking of provisions of section 147 r.w.s. 143(3) of the Act without following due process of law and the provisions of Income Tax Act, being purely legal, the same is admitted for adjudication in the interest of justice. 6. Briefly, in the facts of the case, the assessee had filed return of income on 22.02.2008 declaring total income of ₹ 8,08,450/-. The Assessing Officer on the basis of AIR data noted that the assessee had deposited sum of ₹ 2,29,806/- on 31.03.2007 in the bank account maintained with Hong Kong Shanghai Banking Corporation Ltd., which was not considered while filing the return of income. Therefore, notice under section 148 of the Act was issued on 29.03.2014 after taking prior approval under section 151(2) of the Act from JCIT, Ahmednagar Range, Ahmednagar. The said notice under section 148 of the Act was served upon the assessee on 30.03.2014. In compliance, the assessee filed a letter on 21.04.2014 stating that he had already filed return of income for the instant assessment year and the same may be treated as return of income in response to the notice issued under section 148 of the Act. Thereafter, the assessee was asked to f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epresentative for the assessee referred to the letter dated 16.04.2014 filed on 21.04.2014 under which, the assessee sought the reasons for reopening of assessment after he had given an intimation that the original return of income filed by him should be treated as filed in response to notice under section 148 of the Act. Thereafter, the assessee points out that reasons were intimated to him as per assessment order and reasons were communicated. On 12.10.2015, the extract of reasons was given, which is after passing of the appellate order by the CIT(A) on 09.10.2015, copy of which is placed at page 5 of the Paper Book. The assessee further points out that another letter was made to the Assessing Officer on 12.04.2016 to give exact reasons for reopening the assessment under section 147 of the Act and vide letter dated 02.05.2016, the reasons have been given, which are at variance from the extract of reasons given to the assessee in the assessment order. The learned Authorized Representative for the assessee referred to the ratio laid down by the Hon ble Bombay High Court in CIT Vs. Trend Electronics (2015) 379 ITR 456 (Bom), wherein it has been held that in the absence of providing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... through AIR data, the assessee had deposited an amount of ₹ 2,29,806/- on 31.03.2007 in HSBC Bank account. However, the copy of exact reasons recorded for reopening the assessment is with regard to amounts received from HSBC Bank totaling ₹ 2,29,806/-. The two are at variance i.e. initial communication to the assessee was with regard to deposits in the said HSBC bank account and on the other hand, the exact reasons were on account of amount received from HSBC Bank. In such scenario, where correct reasons have not been provided to the assessee, the question which arises is whether re-assessment proceedings completed against the assessee are validly complete. 12. The assessee by way of additional ground of appeal has challenged the jurisdiction of Assessing Officer in initiating proceedings under section 147 of the Act for lack of reason to believe of escapement of income. 13. The learned Authorized Representative for the assessee pointed out that the notice under section 148 of the Act was issued on 29.03.2014. Further, vide letter dated 16.04.2014, the assessee filed reply before the Assessing Officer in which it was pointed out that he had originally filed return ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... henever the Revenue seeks to exercise such power, it must strictly comply with the pre-requisite conditions, viz., recording of reasons to indicate that the Assessing Officer had reason to believe that income chargeable to tax has escaped assessment which would warrant the reopening of an assessment. These recorded reasons must be furnished to the assessee when sought for so as to enable the assessee to object to the reasons before the Assessing Officer. Thus, in the absence of reasons being furnished when sought for would make an order of reassessment bad in law. The recording of reasons and furnishing of the reasons has to be strictly complied with as it is a jurisdictional issue. This requirement is salutary as it not only ensures reopening notices are not lightly issued but also where notices have been issued on some misunderstanding/misconception, the assessee is given an opportunity to point out that the reasons to believe as recorded in the reasons do not warrant reopening before the reassessment proceedings are commenced. The Assessing Officer disposes of these objections and if satisfied with the objections, then the reopening notice under section 148 is dropped or withdra ..... X X X X Extracts X X X X X X X X Extracts X X X X
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