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TMI Blog2021 (2) TMI 934X X X X Extracts X X X X X X X X Extracts X X X X ..... (1) was at 1,79,300/- only. AO never mentioned in reasons u/s 148 that he has reasons to believe that income of 17,69,000/- chargeable to tax had escaped assessment. The reasons are therefore, incorrect and based on no belief of AO. The ingredients of section 147 of IT Act are, therefore, not satisfied. The AO did not apply mind to information. The issue is, therefore, covered by order of ITAT Delhi Bench in the case of Dheeraj Yadav [ 2021 (1) TMI 731 - ITAT DELHI] . Following the same, we set aside the orders of the authorities below and quash the reopening of the assessment. Resultantly, all additions stand deleted. - Decided in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... to recording the reasons, AO issued a letter dated 18.08.2015 (PB1) seeking explanation of deposits of ₹ 17,69,000/- in the bank account of the assessee which fact is incorrect because the total deposits in his two bank accounts was of ₹ 18,78,400/- which AO has ultimately accepted and made addition of this amount. He has submitted that AO was having no authority to issue letter dated 18.08.2015 because no return was pending on the date of issue of this letter. Assessee filed reply before AO dated 07.12.2015 (PB2) in response to the query letter dated 18.08.2015 in which all these facts were explained. He has submitted that cash deposit in the bank account per se is not income of the assessee. The assessee has income from profession and interest income as well as agricultural income and amounts were deposited on account of sale of Popular Trees. Therefore, AO recorded incorrect facts in the reasons, therefore, reopening of the assessment is bad in law and liable to be quashed. 6. On the other hand, Ld. DR relied upon the orders of the authorities below and submitted that AO on the basis of information received correctly recorded the reasons that income chargeable to ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RE-A "The assessee is an individual whose jurisdiction lies in this Ward. As per ITS. Retails, the Assessee has not filed any return of income. 2. Information has been received from ITO Ward-46(4) vide F.No.ITO/W-46(4)/2017-18/645, Dated 22.03.2018, received in this office on 22.03.2018. 3. The department is having Information that during the F.Y. 2010-11 the assessee has deposited cash amounting to ₹ 11.07.160/- with ICICI Bank Ltd., and received commission payments amounting to ₹ 2,533/- from KARVAT HEALTH CARE SERVICES PVT LTD. 4. Since the assessee had not filed ROI for the year under consideration, the source of cash deposit made and commission payments received by the assessee amounting to ₹ 11,09,693/- remains unexplained and also they exceeds the maximum amount which is not chargeable to tax and for filing the return for A.Y. 2011-12; I have reason to believe that assessee's income changeable to tax has escaped assessment. 5. In view of the information as above, Explanation 2(a) to section 147 is applicable in the case which lays down that the following shall also be deemed to be case where income chargeable to tax has escaped assessment, "w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and reassessment proceedings have been quashed." The Order is reproduced as under : "IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES "SMC" : DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA.No.3177/Del./2017 Assessment Year 2007-2008 Shri Abrar Ahmad Qasimi, Delhi - 110 066. C/o. M/s. RRA Tax India D-28, South Extension, Part-1, New Delhi - 110049. PAN AHGPA5521K vs The Income Tax Officer, Ward-46(5), New Delhi. (Appellant) (Respondent) For Assessee : Shri Somil Agarwal, Advocate For Revenue : Ms. Ashima Neb, Sr. D.R. Date of Hearing : 21.05.2018 Date of Pronouncement : 01.06.2018 ORDER This appeal by assessee has been directed against the order of the Ld. CIT(A)-16, New Delhi, dated 06th March, 2017, for the A.Y. 2007-2008. 2. Briefly, the facts of the case are that in this case notice under section 148 for reopening of the assessment was issued on 21.02.2014 after obtaining the approval of JCIT, New Delhi. The assessee in response to the notice, filed return of income declaring income of ₹ 99,200/-. During the year, assessee had declared salary income only. The reasons for reopening of the assessment have been provided to the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment u/s. 147 of I.Tax Act, 1961." 5.1. He has submitted that mere deposit of the cash in the bank account is not sufficient to believe that income chargeable to tax has escaped assessment, therefore, reopening of the assessment is bad in law. It was submitted that the issue is covered in favour of assessee by order of ITAT, SMC-Bench in the case of Shri Arvind Yadav vs. ITO, Ward-1(1), New Delhi ITA.No.1508/Del./2017 for the A.Y. 2008-2009, Dated 07.07.2017, in which the Tribunal on identical facts, set aside the orders of the authorities below and quashed the reopening of the assessment vide order dated 07.07.2017. Copy of the order is placed on record. 6. Ld. D.R. relied upon the orders of the authorities below. 7. After considering rival submissions, I am of the view that reopening of the assessment is bad in law. The A.O. merely noted in the reasons that since there is an information available on ITD System of the Department that assessee has made cash deposits of ₹ 14,75,000/- in his Bank Account, therefore, income chargeable to tax has escaped assessment. The ITAT, Delhi Bench in the case of Shri Arvind Yadav (supra) considering the identical facts held t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he reasons for reopening of the assessment and there was a complete non-application of mind. Therefore, the reopening of the assessment may be quashed. He has relied upon the Judgments of Hon'ble Delhi High Court in the case of Pr. CIT vs., G & G Pharma India Ltd., [2016] 384 ITR 147 (Del.), Pr. CIT vs., RMG Polyvinyl [2017] 396 ITR 5 (Del.). 5. On the other hand, Ld. D.R. relied upon the Orders of the authorities below and submitted that A.O. has correctly recorded reasons for reopening of the assessment because there was a cash deposit in the ICICI Bank Account of the assessee, therefore, reopening of the assessment is justified in the matter. 6. We have considered the rival submissions. It is well settled Law that validity of the reopening of the assessment is to be determined with reference to the reasons recorded for reopening of the assessment. The assessee has filed copy of the reasons recorded for reopening of the assessment in the paper book which is reproduced above in which the A.O. has mentioned that he has information that assessee has deposited cash amounting to ₹ 11,07,160/- with ICICI Bank Ltd., and also received commission of ₹ 2,533/- and thus, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ACIT & Others [2007] 293 ITR 548 [Bom.]. It may also be noted here that though A.O. has referred to the commission earned by the assessee in assessment year under appeal, but, no addition have been made in the re-assessment order. Considering the above facts in the light of above Judgments and Order of the Tribunal in the case of Shri Abrar Ahmad Qasimi, Delhi vs., ITO, Ward-46(5), New Delhi (supra), it is clear that A.O. has recorded incorrect, wrong and non-existing reasons for reopening of the assessment and also failed to verify the information received by him before recording the reasons for reopening of the assessment. Thus, there was clearly non-application of mind on the part of the A.O. to initiate the re-assessment proceedings. The A.O. would not get assumption of jurisdiction legally to frame the re-assessment under section 147/148 of the I.T. Act, 1961. In view of the above, we set aside the Orders of the authorities below and quash the reopening of the assessment. Resultantly, all additions stand deleted. The other issues on merit are left with academic discussion only. Accordingly, the appeal of the Assessee is allowed. 7. In the result, appeal of the Assessee all ..... X X X X Extracts X X X X X X X X Extracts X X X X
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