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TMI Blog2019 (11) TMI 808X X X X Extracts X X X X X X X X Extracts X X X X ..... essment is invalid - all the additions stand deleted. Appeal of the assessee allowed. - ITA.No.2496/Del./2018 - - - Dated:- 15-11-2019 - Shri Bhavnesh Saini, Judicial Member For the Assessee : Shri Ajay Wadhwa, Advocate. For the Revenue : Shri Pradeep Singh Gautam, Sr. D.R. ORDER This appeal by assessee has been directed against the Order of the Ld. CIT(A)-12, New Delhi, Dated 19.01.2018, for the A.Y. 2012-2013, challenging the reopening of the assessment under section 147/148 of the I.T. Act, 1961 and addition of ₹ 21,28,020/- as deemed income under section 69A of the I.T. Act, 1961. 2. Briefly the facts of the case are that an information was received from ACIT, Inv. Unit-III (3), New Delhi vide letter dated 03.05.2012 wherein it was stated that during search operation carried out on AEZ group of cases (part of Aerens Group) on 17.08.2011 and subsequent post search enquiries and operation under section 133A conducted on 10.02.2012 on certain investors groups comprising of 23 investors, it was gathered that the investors had made substantial amount of cash payment other tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er section 147 of the I.T. Act was passed on 28.03.2014. As per reasons recorded for A.Y. 2007-2008, it is observed that the assessee had booked FF-117, Ground Floor Commercial, Indirapuram Habitat Centre Project, Ghaziabad, Project of AEZ Group. As per reason recorded, assessee had made a total payment of ₹ 78,58,980/- for booking/purchase of the property FF-117, Ground Floor Commercial, Indirapuram Habitat Centre Project, Ghaziabad, out of which, ₹ 11,37,000/- was made by cheque and payment of ₹ 67,21,980/- was made in cash. The amount paid in cash amounting to ₹ 67,21,980/- was treated as unexplained investment in cash and added in A.Y. 2007-08. During the assessment year under appeal i.e., 2012-13, the assessee has submitted that she had invested in this property and assessee had made payment amounting to ₹ 11,37,000/- and ₹ 20,63,000/- (supra) for the same property and also copies of the bank statement for both the years were enclosed. On perusal of submission made by the assessee, A.O. observed that the amount of ₹ 11,37,000/- paid through cheque is the same amount which was shown at the time of assessment proceeding for the A.Y. 2007 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operty in the above said project. The amount accepted by them to have been paid exactly matched with the amounts mentioned in the extracted sheets of the Hard Disk seized from the Corporate Office of the AEZ Group. 2. Ms. Taruna Verma is one of the investors of the AEZ Group, who has booked/purchase Unit No. FF-117, Ground Floor Commercial, Indirapuram Habitat Centre Project, Ghaziabad Project of AEZ Group. As per information received Ms. Taruna Verma has made a total payment of ₹ 1,20,50,000/- for booking/ purchase of this property, ₹ 32,00,000/- was 'made by cheque on 01.04.2011 and payment of ₹ 88,50,000/- was made in cash. 3. Letter was issued to Ms. Taruna Verma regarding payments made by her to M/s AEZ Group in connection with booking/purchase of property. The assessee has only admitted of having paid ₹ 32,00,000/-, out of her savings Bank account maintained with Canara Bank, Shastri Nagar, New Delhi as under : (i) ₹ 11,37,000/- on 21.04.2006; and (ii) ₹ 20,63,000/- on 21.06.2011 4. Thus, she denied any payment in cash. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... booking/purchase of this property. ₹ 11,37,000/- was made by cheque on 19/04/2006 and payment of ₹ 67,21,980/- was made in cash. Letter was issued to Ms. Taruna Verma regarding payments made by her to M/s AEZ Group in connection with booking/purchase of property. The assessee has only admitted of having paid ₹ 11,37,000/- out of her saving bank account maintained with Canara Bank, Shastri Nagar, New Delhi. In view of the facts and circumstances, I have reason to believe that income to the extent of ₹ 67,21,980/- paid, by M/s. Taruna Verma in cash for booking/ purchase of property with AEZ Group in the F. Y. 2006- 07 is chargeable to tax for the assessment year 2007- 08 and has escaped assessment. Approval is sought u/s 151(2) of the 1. T. Act. Sd/-Sunil Kumar, Income Tax Officer, Ward-19(3), New Delhi. 4.2. Learned Counsel for the Assessee submitted that appeal of assessee for A.Y. 2007-2008 have been decided by ITAT, Division Bench, New Delhi in ITA.No.2833/Del./2016 vide Order Dated 19.09.2017 and re-assessment proceedings ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 147 of even date is enclosed. Suddenly the new reasons, which are placed at page No. 56 of the paper book, were supplied to the assessee. As per the new reasons the total payment of ₹ 78,58,980/-, the sum paid by cheque of ₹ 11.37 Lacs, and the balance amount of ₹ 67,21,980/-paid in cash also remains unchanged. This was provided to the assessee when only 10 days time was left with the assessing officer for completion of the assessment. The assessee filed objection to this new reasons on 24/03/2014, which was disposed of on the same date without adverting to the any of the objection of the assessee. In the present case the figure stated by the Ld. assessing officer in reasons recorded as well as the actual fact of details of payment made by the assessee to the builder did not match. Assessee has already paid a sum of ₹ 32 Lacs whereas the reasons mentioned by the assessing officer states that assessee has only paid ₹ 11.37 Lacs. Therefore, it is apparent that Ld. assessing officer has initiated reassessment proceedings without application of mind to the facts of the case to the information supplied by the investigation wing. The i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 147(a) and that is, that the Assessing Officer has reason to believe that income of an assessee has escaped assessment. However, the proviso to section 147 of the Act provides a complete bar for reopening an assessment, which has been made under section 143(3) of the Act, after the expiry of four years. However, this proscription is not applicable where the income of an assessee has escaped assessment on account of failure on the part of the assessee to make a return or to disclose fully and truly all material facts necessary for his assessment. Thus, in order to reopen an 16 | P a g e Tarun Verma Vs. ITO, ITA No. 2833/Del/2016 (Assessment Year: 2007-08) assessment which is beyond the period of four years from the end of the relevant assessment year, the condition that there has been a failure on the part of the assessee to truly and fully disclose all material facts must be concluded with certain level of certainty. It is in the aforesaid context that this court in Haryana Acrylic Manufacturing Co. (P.) Ltd. (supra) explained that the ratio of the decision in Phool Chand Bajrang Lal (supra) may not be entirely applicable since the same was in respect of section 147(a) as it ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that the reopening of the assessment was valid, this does not satisfy the requirement of law that prior to the reopening of the assessment, the Assessing Officer has to, applying his mind to the materials, conclude that he has reason to believe that income of the assessee has escaped assessment. Unless that basic jurisdictional requirement is satisfied a post mortem exercise of analysing materials produced subsequent to the reopening will not rescue an inherently defective reopening order from invalidity. 14. In the circumstances, the conclusion reached by the Income-tax Appellate Tribunal cannot be said to be erroneous. No substantial question of law arises. 11. In the present case, it is apparent that Ld. assessing officer has not applied his mind to the information provided by the investigation wing to the extent that even the amount of payment made by the assessee to the builder was not even verified. Furthermore it was also not verified that were the investors purchasing the property were examined. The Ld. assessing officer even did not care to provide the correct reasons recorded by the revenue ins ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessing officer shall proceed for reassessment. In the present case, the assessment proceedings were already completed before providing the correct reasons to the assessee. In view of this, we do not have any hesitation in holding that reassessment proceedings are invalid. 14. In view of this without going into the merits of the addition made by the Ld. assessing officer we quash the reassessment proceedings and allow ground No. 1 to 6 of the appeal of the assessee. 15. In the result appeal of the assessee is allowed. 5. Considering the above, it is clear that the ITAT, Delhi Bench for A.Y. 2007-2008 did not approve the reasons sufficient for reopening of the assessment. It was also clearly held that A.O. has not applied his mind to the information provided by Investigation Wing. therefore, reopening of the assessment was quashed. In the present case, the assessee has submitted before the Ld. CIT(A) that reasons to believe are factually incorrect, inconsistent with the reasons recorded for A.Y. 2007-2008. It was stated that case for A.Y. 2007-2008 and impugned assessment order i.e., A.Y. 2012-2013 have been reopened in r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O. while recording reasons. Reopening of the assessment is, therefore, bad in law. 5.3. Considering the totality of the facts and circumstances of the case and comparing the reasons for reopening of the assessment for A.Y. 2007-2008 and 2012- 2013 (under appeal), it is clear that A.O. has recorded incorrect facts in the reasons for reopening of the assessment which are factually incorrect, contradictory and vague. The A.O. did not verify the report received from Investigation Wing and did not apply his mind to the information as well as facts of the case. In A.Y. 2007-2008 on the identical reasons, the Division Bench of the Tribunal did not approve the reopening of the assessment in the matter and quashed the same vide Order Dated 19.09.2017 (supra). The issue is, therefore, covered in favour of the assessee by the Order of the Tribunal in the case of same assessee for A.Y. 2007-2008 (supra). There isno link between material and formation of opinion that income escaped assessment. There is no independent application of mind to the information received from Investigation Wing and no prima facie opinion have been formed, therefore, re-assessment is invalid. I rely up ..... X X X X Extracts X X X X X X X X Extracts X X X X
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