9911796707
TMI Blog2021 (4) TMI 904X X X X Extracts X X X X X X X X Extracts X X X X ..... d be treated as turnover of the assessee and not the deposits in the account. The Ld. Appellate authority is hereby prayed to hold such action as illegal. 3. On the facts & circumstances of the case, the Ld.CIT(A) erred in confirming the action of Ld. A.O. of reopening of the assessment under section 147/148 as proper sanction U/s 151 was not obtained before issuing notice. The Ld. Authority is prayed hereby to render such action as illegal. 4. The appellant hereby craves leave to add, alter, amend or substitute one or more grounds of appeal at the time of hearing." The assessee has also taken an additional ground, which is reproduced as under: "Ground No. 5: On the facts and circumstances of the case, the impugned assessment order passed by the AO u/s. 147/143(3) of the Act is invalid and void ab initio for want of valid notice u/s. 143(2) as per law as evident from fact that when return in response to notice u/s. 148 was admittedly filed on 13.10.2017, notice u/s. 143(2) is issued on very same day that is 13.10.2017 which shows non application of mind in issuing notice u/s. 143(2) and thereafter in framing the assessment and accordingly all proceedings are nullity." 2. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... miss ground No. 2 of the appeal being not pressed. 7. Ground No. 1 of the appeal raised by the assessee relates to challenging the order of the ld. CIT(A) in confirming the action of the A.O. in assessing the income of the assessee at Rs. 20,37,281/-. The ld. AR appearing on behalf of the assessee has reiterated the same arguments as were raised before the ld. CIT(A) and also relied on the written submissions filed before the Bench and the same is reproduced below: "Brief facts of the case are that the assesse was issued notice under section 148 on 27.03.2017. In pursuance of same, assesse filed her return of income in pursuance of said notice on 13.10.2017 declaring total income of Rs. 101864.00 as commission income from letting out her bank account for the purpose of accommodation entries. The return of income was filed manually and a copy of computation of income filed by the assesse is enclosed as a part of paper book as Page No. 1. The assessment in this case 6s completed under section 143(3) rws 147 of the act treating entire deposits of Rs. 46745628.00 in her account as turnover belonging to assessee and assuming net profit thereupon at the arbitrary rate of 5%. Thus, as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osed at page no. 52-53 of paper book) for seeking directions U/s 144A of the act where he mentioned as under: "Hence, in the above facts and circumstances, it appears that the assesse is totally unaware about the transactions recorded in above bank account and it appears to have used this account by someone else for other purposes. Deposit of cheque and immediately withdrawal in cash does not indicate the normal trading activities in the business. This type of modus operandi is generally found in the; case of accommodation entries by issue of bogus sale bills. In such type of work, after receiving the money through cheque, entire amount after deducting the commission is returned to the party". A.O also referred in said letter about case of Hansa Vijay for assessment year 2007-08 where only commission income was assessed. Now the extract as well as entire letter shows the stand of the Ld. A.O on the nature of transactions. However, on directions from Ld. JCIT, he inquired from the commercial tax department where he got the details of VAT registration of the party. However, it is pertinent to note that these details were already with the Ld. A.O as mentioned in Page 2 of assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e from the facts in question in this case. In the said case, the assessee was a businessman actively carrying on business whereas in the present case, she was just a housewife and wife of a labour whose account was misused and who never carried on any, business. Thus, by no stretch of mind her misused bank account receipts can be reckoned as turnover. The relevant extracts of that decision are as follows: "We have heard both the parties. The Tribunal vide order dated 29th May. 2009 in the case of Shri Ram Swaroop in ITA No.113/JP/2009 for the A.Y. 2005- 06 had an occasion to consider the cash deposits of Rs. 22.86 lakhs made in the account of Shri Ram Swaroop in IDBI Bank. The deposits were similar of the nature as are available in this case. The Tribunal after considering the facts of the case held that income of Rs. 1.25. lacs to be estimated and accordingly directed the AO to add the same of Rs. 1.25 Lacs as against cash deposit during the entire year. The Ld. AR has filed before us the copy of the bank account. The copy of the bank account contains 9 pages. There are number of entries in each month. The maximum credit balance in the bank account is to the extent of Rs. 1, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansa Vijay for assessment year 2007-08 where only commission income was assessed. Another order of Ramgopal vs ACIT Jaipur dated 28.02.2013 was referred to by the assesse during assessment proceedings where only commission income was assessed in such cases. Thus, it could be clearly concluded that the turnover in bank was not the turnover of the assessee related to any business carried on by her. The Ld. CIT(A) rejected the contentions of the assesse summarily mentioning that assesse did not discharge her onus of proving the fact that the credits in account of assesse was not her turnover (Copy of appellate order appended as part of paper book Page No. 20-27). However, the Ld. CIT (A) failed to take into account various evidences as mentioned above and enlisted below again given by the assesse or available on record in support of her contentions: a. Inquiry by department about financial status of the assesse where it was clearly an admitted fact that she was a housewife and married to a labour class person b. Letter of Ld. AD seeking directions under section 144A where he himself admitted this fact c. Statement of husband of the assesse d. Modus operandi in the bank a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arties and have perused the material placed on record. We have also deliberated upon the decisions cited in the orders passed by the authorities below as well as cited before us and we have also gone through the orders passed by the revenue authorities. From perusal of the record, we observe that the ld. CIT(A) has dealt with the issue in para 2.3 to 2.3.2 of her order and the same is reproduced below: "2.3 I have perused the facts of the case, the assessment order and the submissions of the appellant. It is seen that the Assessing Officer treated the entire deposit in bank account of assessee as sale of assessee and estimated net profit by applying net profit rate of 5%. The Ld. Authorized Representative argued that assessee was housewife not doing any business. She allowed Mr. Sitaram Khandelwal to use her bank account for issuing bogus bills on which she earned commission income. 2.3.1 Ld. Authorized Representative argued that profit rate at 5% much higher in case of assessee is being treated as carrying on business of jewellery and gemstone. On perusal of facts, it is seen that the credit is in the bank account of the assessee and its the onus of appellant to prove correct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment under section 1471148 is bad in law as proper sanction U/s 151 was not obtained before issuing notice. The Ld. Pr CIT -II wrote only 'Yes' while recording sanction as per section 151. In addition to this, the additional CIT also wrote only yes and that too even 'undated. This clearly shows that sanction was accorded in a mechanical manner without application of independent mind by the Ld. Authorities. Thus, such an approval is no approval in the eyes of the law having been granted without application of mind. The Ld. CIT(A) also while making his order did not adjudicate this ground at all. We draw the attention of the H'ble Bench to Page 7 & 8 or order where the question raised by the assesse was regarding sanction under section 151 of the act but the matter dealt was sufficiency of reason to believe. This clearly shows that the appeal was dismissed without taking account the relevant facts on record. We also produce gist of important judicial pronouncements on the same where the judicial authorities has rendered entire proceedings as null and void in absence of proper recording of satisfaction by the requisite authority. He relied on the following judici ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... escaped assessment. The expression cannot be read to mean that the Assessing Officer should have finally ascertained the fact by legal evidence or conclusion and what is required is "reason to believe", but not the established fact of escapement of income. At the stage of issue of notice, the only question is whether there was relevant material on which a reasonable person could have formed a requisite belief. In view of above finding I do not find any legal infirmity on the plea of the appellant. Therefore, the Assessing Officer rightly initiated the proceedings u/s 148 of the Act. The additional ground of appeal is dismissed." The ld. CIT(A) has held that he Assessing Officer reopened the assessments proceedings after recording the due reasons and due satisfaction after following the due process. The case of the assessee was reopened in the light of information/documents to the extent which were available with the AO. The material before the Assessing Officer was relevant and affords a live link or nexus to the formation of the prima facie belief that income chargeable to tax has escaped assessment in the hands of the assessee. The sufficiency and correctness of material nee ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
