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TMI Blog2020 (1) TMI 1274X X X X Extracts X X X X X X X X Extracts X X X X ..... t enough to enable reopening of the completed assessment. The reassessment proceedings and all further proceedings pursuant thereto, culminating in the impugned order, are held to be null and void.- Decided in favour of assessee. - ITA No. 593/LKW/2019 - - - Dated:- 15-1-2020 - A. D. Jain , Vice President For the Appellant : P. K. Kapoor , C. A. For the Respondents : Ajay Kumar , D. R. ORDER 1. This is assessee's appeal against the order of the ld. CIT(A)-1, Lucknow, dated 22/8/2019 for assessment year 2010-11, taking the following grounds: 1. BECAUSE the CIT(A) was not justified in dismissing the appeal in-limini by passing ex-parte order without affording proper opportunity of hearing to the appellant and consequently the impugned order deserves to be set-aside and matter restored to CIT(A) for passing the order afresh after providing due and effective opportunity of being heard to the appellant. 2. BECAUSE the re-assessment proceedings were neither initiated nor concluded as per provisions of law and consequently the CIT(A) should have quashed the assessment order dated 04.03.2016 passed under section 143(3)/147 of the Act . 3. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of natural justice. 2. The ld. D.R. has produced the record, as he was requested to do, vide order sheet entry dated 16/12/2019. A copy of the reasons of the Assessing Officer for formation of belief of escapement of income has been filed. These reasons read as follows: 05.03.2015 As per AIR information available in the office it is noticed that during the year relevant to the assessment year 2010-11, the assessee had made cash deposits to the tune of ₹ 13,19,000/- in her saving bank account maintained with Punjab National Bank. The source of money deposited in Saving Bank account, which are not verifiable at this stage. Return of income for the year under consideration has been filed by the above named assessee but from the perusal of return, cash deposits in the bank account cannot be verified at this time. The source of deposit to the tune of ₹ 13,19,000/- extent of business, nature and source(s) of deposits are required to be examined in the case of assessee. I have reason to believe that deposits to the tune of ₹ 13,19,000/- has escaped assessment for the relevant assessment year. Hence, proceedings u/s. 147 of the I.T. Act, 1961 are being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tinction between factors which indicate an income escaping the assessments and the factors which indicate a legitimate suspicion about income escaping the assessment. The former category consists of the facts which, if established to be correct, will have a cause and effect relationship with the income escaping the assessment. The latter category consists of the facts, which, if established to be correct, could legitimately lead to further inquiries which may lead to detection of an income which has escaped assessment. There has to be some kind of a cause and effect relationship between reasons recorded and the income escaping assessment. While dealing with this aspect of the matter, it is useful to bear in mind the following observations made by Hon'ble Supreme Court in the case of ITO Vs Lakhmani Mewal Das [(1976) 103 ITR 437], the reasons for the formation of the belief must have rational connection with or relevant bearing on the formation of the belief. Rational connection postulates that there must be a direct nexus or live link between the material coming to the notice of the ITO and the formation of this belief that there has been escapement of the income of the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that an income has escaped assessment. 9. Learned Departmental Representative has referred to a number of judicial precedents in support of her stand that even deposits in the bank account, as having come to the notice of the Assessing Officer through AIR, can be reason enough for holding the belief that income has escaped assessment. She has relied upon the decisions in the cases of CIT Vs Nova Promoters Finlease Pvt. Ltd. [(2012)342 ITR 169] but then none of the questions before Hon'ble High Court had anything to do with reopening of assessment and this decision cannot, therefore, be taken as an authority on the legal issue which did not even come up for specific adjudication before Their Lordships. As for her reliance on Hon'ble Supreme Court's judgment in the case of Phool Chand Bajrang Lal Vs ITO [(1993) 203 ITR 456], that was case in which Their Lordships concluded that the AO rightly initiated the reassessment proceedings on the basis of subsequent information, which was specific relevant and reliable, and after recording the reasons for formation of his own belief that in the original assessment proceedings, the assessee had not disclosed the material f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 39;Bir Bahadur Singh Sijwali' (supra), the material forming the basis of the Assessing Officer's belief of escapement of income must indicate income escaping assessment, rather than desirability of further probe in the matter which may, or may not, lead to income escaping assessment. On the other hand, in the reasons recorded in the present case, as reproduced hereinabove, the Assessing Officer himself states that: .........The source of the deposit of ₹ 13,19,000/-, the extent of business, nature and source(s) of the deposits are required to be examined in the case of the assessee..... 7. The Assessing Officer further states in the reasons that: .........I have reason to believe that deposits to the tune of ₹ 13,19,000/- has escaped assessment for the relevant assessment year. and that hence, proceedings u/s. 147 of the I.T. Act, 1961 are being initiated. 8. Here, again, 'Bir Bahadur Singh Sijwali' (supra) is specific that what has to be examined is whether the fact of deposits, per se, in the bank account of the assessee could be the basis of holding the view that the income has escaped assessment. It is only belief of escapement ..... X X X X Extracts X X X X X X X X Extracts X X X X
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