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TMI Blog2020 (12) TMI 605X X X X Extracts X X X X X X X X Extracts X X X X ..... notice under section 148 of the I.T. Act, 1961. The assessee filed return of income on 25.04.2017 declaring NIL income. The A.O. thereafter issued statutory notice but ther were no compliance. The A.O. on going through the financial statement, found that unsecured loans as on 31.03.2014 were Rs. 89,59,627/- whereas those were Rs. 1,22,78,469/- as on 31.03.2015. Thus, there was an increase of Rs. 33,18,842/- in unsecured loan account during the year which remain unexplained as the assessee did not file any details with regard to these. In the absence of any information with regard to source of such increase in loans, same was treated as income of assessee during assessment year under appeal and addition of Rs. 33,18,842/- was made against the assessee. 3.1. The assessee challenged the reopening of the assessment as well as addition before the Ld. CIT(A). The assessee also filed an application for admission of additional evidences under Rule 46A explaining that due to change of address in the Registered Office and due to old age of one of the Director Mrs. Baleshwari Devi the documents could not be filed before the A.O. The Ld. CIT(A) called for the remand report from the A.O. whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... explained each and every item to show that impugned amount is paid by Shri Ram Kishan Dass through banking channel which is also explained through the bank statements and balance-sheet of Shri Ram Kishan Dass who was a man of means to make the payment on behalf of the assessee company. Thus, the addition on merit itself was wrong and incorrect. He has submitted that A.O. did not make addition of Rs. 1.59 crores which would show that A.O. recorded wrong reasons and did not apply his mind to the facts of the case before recording the reasons. Thus, the reopening of the assessment should have been quashed in the matter and addition should have been deleted. 5. On the other hand, Ld. D.R. relied upon the Orders of the authorities below and submitted that assessee did not cooperate with the authorities below. Thus the additional evidences were correctly rejected for admission. The Ld. D.R. submitted that since the information was received from the O/o. Sub-Registrar that assessee made investment in plot at Noida in a sum of Rs. 1.59 crores, therefore, A.O. has correctly recorded the reasons for reopening of the assessment. Thus, the appeal of assessee has no merit and the same may be d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the extent of Rs. 1,59,00,000/- has escaped assessment and the case is fit for issuing notice u/s. 148 of the Income Tax Act, 1961. The assessee has intentionally avoided furnishing true and complete particulars of this transaction. Thus the income of the assessee has escaped assessment by reason of the failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment attracting Section 147 of the I.T. Act. In view of the above, I, therefore, have reason to believe that the income of Rs. 1,59,00,000/- has escaped assessment as defined by Section 147 of the I.T. Act, 1961. Date 27.03.2017 Sd/-BALBIR SINGH, Income Tax Officer, Ward-26(1), New Delhi." 6.1. In the reasons A.O. has mentioned that assessee has purchased immovable property valued at Rs. 1.59 crores. The A.O. issued notice to the assessee seeking explanation. The assessee has filed the details of purchase of immovable property which are mentioned in assessee's books of account. The A.O. on going through the balance sheet filed by assessee found there is a difference in the amount as per balance sheet and as per information received from O/o. Sub-Registrar. The A.O, therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... crores for making the investment in purchase of industrial plot at Noida. Thus, the entirety of the facts clearly show that A.O. recorded wrong, incorrect and non-existing reasons for reopening of the assessment without application of mind and such reopening of the assessment would be invalid and bad in Law. In support of our findings, we rely upon the following decisions. 6.2. The Hon'ble Punjab & Haryana High Court in the case of CIT vs., Atlas Cycle Industries [1989] 180 ITR 319 (P&H) held as under : "Held, (i) that the Tribunal was right in cancelling the reassessment as both the grounds on which the reassessment notice was issued were not found to exist, and, therefore, the Income-tax Officer did not get jurisdiction to make the reassessment." 6.3. The Hon'ble Delhi High Court in the case of Pr. CIT vs., SNG Developers Ltd., [2018] 404 ITR 312 (Del.) in which it was held as under : "Held, dismissing the appeal, that the reasons recorded by the Assessing Officer for reopening the assessment under section 147, issuing a notice under section 148 did not meet the statutory conditions. As already held by the Appellate Tribunal, there was a repetition of at least five accommod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in law and the notice issued under section 147 of the Act was to be quashed." 6.5. The Hon'ble Bombay High Court in the case of Siemens Information Systems Ltd., vs., ACIT & Others [2007] 293 ITR 548 (Bom.) held as under : "The petitioner had several EOU/STP units engaged in the business of export of software. In response to the notice for reopening the assessment for the assessment year 1999-2000, the petitioner, objecting to the issuance of the notice, stated that the reasons furnished by the authority had quoted the provisions of section 10A as amended by the Finance Act, 2000, with effect from the assessment year 2001-02 and as such could not have been made applicable to the assessment year 1999-2000 and the notice had been issued under the mistaken belief about the correct position of law. However, opportunity to show cause was given to the petitioner as to why the loss claimed should not be disallowed to be carried forward. On a writ petition : Held, allowing the petition, (i) that it would be clear from the reasons given that the authority proceeded on the presumption that the law applicable was the law after the amendment and not the law in respect of which the petit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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