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TMI Blog2021 (10) TMI 664X X X X Extracts X X X X X X X X Extracts X X X X ..... nducting further independent and direct enquiry during the course of assessment proceedings and which explains as to why the same were never shared with the assessee - in such peculiar circumstances, where the assessee is disputing making any cash payments and in absence of any tangible material brought on record by the Revenue and shared with the assessee in order to enable the latter to put forward his explanation, we do not see any justifiable basis to make the addition in the hands of the assessee and the addition so made is hereby directed to be deleted. Addition made by the AO wherein the assessee has again requested to provide the requisite information/material in possession of the AO - Besides the AIR information, the AO has neither these details in his possession nor have sought these details by conducting further enquiry during the course of assessment proceedings and hence, the same were never shared with the assessee - in absence of any tangible material brought on record by the Revenue and shared with the assessee in order to enable the latter to put forward his explanation, we do not see any justifiable basis to make the addition in the hands of the assessee and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice without copy of reasons recorded for issue of notice U/s. 148 is an incomplete notice and resultantly, the assessment completed on the basis of incomplete notice does not have any force in the eye of law. 4. It was submitted that as per the judicial pronouncements, the Assessing Officer was under legal obligation to supply the copies of the reasons for issue of notice u/s. 148 hand in hand. Apart from this, the Hon'ble Supreme Court has also held that the copies of the reasons have to be supplied to the assessee within reasonable time. What is reasonable time has been discussed by the Hon'ble Delhi High Court in the judgment of Haryana acrylic manufacturing company v/s CIT reported in 308 ITR 38 by considering the Judgment of Hon'ble Supreme Court in the case of GKN Driveshafts (India) Ltd. Further, reference was drawn to the order of the Delhi Benches of Tribunal in case of Shri Balwant Rai Wadhwa V/s ITO (ITA No. 4806/Del/10 dated 14.01.2011). It was submitted that the reasons have to be supplied along with the notice or within the time period allowed under section 149 of the Income Tax Act i.e. 4 or 6 years, as the case may be. 5. It was submitted that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 1172 dated 03.10.2019. Regarding the objections on account of reopening of the case, the AO submitted as under:- 3. Validity of assessment order challenged on the reasons of non supply of reasons recorded for initiating proceedings u/s. 147 of I.T. Act: 3.1 The submission of the assessee that the assessment order is illegal and against the law because the Assessing Officer had not supplied the copy of reasons recorded for issue of notice u/s. 148 of the Income-tax Act, 1961 (Hereinafter referred as the I.T. Act is totally incorrect and the same is deserve to be rejected. Reasons were apprised to the AR of the assessee within the reasonable time vide note sheet entry dated 12.10.2015 and 15.10.2015. This fact has been duly incorporated by the AO in assessment order. The A/R of the assessee duly acknowledged the same on the note sheet. As the reason were provided to the assessee therefore, the case laws relied upon by him are not applicable in this case. 3.2 Further, the claim of the assessee that the reasons must be supplied with the time frame allowed under section 149 i.e. 4 years or 6 years, as the case may be, from the end of the assessment year for which no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case were brought to the notice of the appellant and same has also been noted vide order sheet entry dated 12.10.2015 and 15.10.2015. In the rejoinder, the appellant has again reiterated that reasons were not supplied, however, the facts of communication of the reasons through an order sheet entry was not denied. Thus, the contention of the appellant regarding non communication of the reasons does not appear to be correct 8. We have heard the rival contentions and perused the material available on record. In the instant case, it is noted that notice u/s. 148 was issued to the assessee on 25.03.2015 and in response, the return of income was filed by the assessee on 12.10.2015. Thereafter, notice u/s. 143(2) and 142(1) were issued and queries were raised vide order sheet entry dated 12.10.2015, 15.10.2015 and 30.10.2015. In response, the assessee has filed his replies on 12.10.2015, 15.10.2015, 26.10.2015 and 30.10.2015 and finally, the assessment was completed u/s. 143(3) r/w 147 vide order dated 31.10.2015. 9. In terms of requirement of supplying reasons for initiating the proceedings under section 147 as directed by the Hon'ble Supreme Court in case of GKN Drivesh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further note that the ld. CIT(A) has recorded a finding that the AO submitted that reasons regarding reopening the case were brought to the notice of the appellant and same has also been noted vide order sheet entry dated 12.10.2015 and 15.10.2015. In the rejoinder, the appellant has again reiterated that reasons were not supplied, however, the facts of communication of the reasons through an order sheet entry was not denied. Thus, the contention of the appellant regarding non communication of the reasons does not appear to be correct. We therefore find that the reasons were duly communicated to the assessee during the course of assessment proceedings and the ld. CIT(A) has recorded a specific finding to this effect after calling for the remand report from the AO where the AO has brought the fact of communication of reasons to the assessee which is duly acknowledged by the assessee on the note sheet. Therefore, even in terms of principal of natural justice where an adverse action is initiated by the AO, the AO has communicated the reasons to the assessee during the course of assessment proceedings and there is thus complete adherence on part of the AO in terms of principal of na ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rious decisions by the Tribunal. 13. It was further submitted that from the perusal of the assessment order, it may be noted that the credit card transactions are in two names i.e. Rajesh Chunara/Ashok K. Chunara. This shows that the entire transactions are not of the assessee alone. The same are in two names and in case the Assessing Officer wants to make addition on this account, the same must be in two names on equal basis. The assessee came to know this fact on receipt of assessment order because the Assessing Officer didn't provide the copies of the reasons before completion of assessment. Therefore, the addition so made of ₹ 382,079/- is not correct in the hands of the assessee and the same may be directed to be deleted. 14. Regarding Assessing Officer's contention in the remand report submitted before the ld. CIT(A), it was submitted that the assessee has submitted an affidavit of his mother from whom the amount of ₹ 5 lac was received. The affidavit is itself evidence in the eye of law. As far as the creditworthiness and genuineness of the gift is concerned, it is submitted that there is son and mother relationship and the son is in need of funds t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other family members towards natural love affection in the past. Moreover, an affidavit cannot become a Gift Deed on face value of ₹ 10/- only whereas the alleged gift value exceeds ₹ 100/- i.e. shown the value of ₹ 5 lac which is not considered a proper gift deed as per the law. The A/R Has also failed to substantiate the usage of cash gift in any of the transactions held by the assessee during the year under consideration. The assessee has not furnished any copy of gift deed, if any, received by him and also the usage of the gift. The A/R of the assessee has submitted that the assessee has been filing of his ITR since long time but he has not furnished any evidence about the source of income, ITR and copy of bank account to support of his claim. The assessee has not disclosed the transactions in his e-ITR and the statement of accounts. The assessee has also not denied to the transactions held during the year under consideration. In view of the above, the reply of the assessee is not found satisfactory in justification of the source of transactions. (ii) During the appellate proceedings, the appellant again reiterated the fact that he received gift in cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bsence of supply of copies of the same to the assessee. In absence of supply of documents and evidences on which the Assessing Officer relied on for making additions even on the specific demand of the assessee, additions so made by using the evidence behind the back therefore same is not only unjustified and illegal, hence liable to be deleted. In this regard, it was submitted that as per the provisions of section 114 illustration (g) of Indian Evidence Act, the evidence withhold by the person who is having possession of that and relying on the same without supplying to the person affected with evidence then inference is drawn against the person who hold the evidence and not supplied to the affected party. For convenience, the relevant portion of section 114 of Indian Evidence Act is referred as under:- 114- Court may presume existence of certain facts.--The Court may presume the existence of any fact which it thinks likely to have happened, regard being had to the common course of natural events, human conduct and public and private business, in their relation to the facts of the particular case. I lustrations--The Court may presume-- (g) That evidence which could be and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yment against credit card bill amounting to ₹ 3,82,079/- from his bank account with ICICI Bank during the financial year 2007-08 relevant to assessment year 2008-09. As per the reasons so recorded, the information which is in possession of the AO is in respect of payment towards the credit card bill made from the assessee's bank account. As against that, if we look at the assessment order passed by the Assessing officer, the addition has been made on account of the reason that the assessee has failed to explain the source of cash deposits/payments towards credit card bills. There is however nothing on record in terms of assessee's bank statement and credit card statement which shows that cash has been withdrawn from the assessee's bank account and thereafter, the payment has been made towards discharge of credit card liability. In absence of the same, it can be reasonably concluded that the payment has been made through banking channels towards discharge of credit card liability and there is thus clearly a mismatch between the reasons so recorded and basis of the addition so made by the Assessing officer. 23. Having said that, it is noted that during the course ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g in the AIR statement and also sought copies of detail of the transactions in form of transaction statement for the relevant period and the same would then have been shared with the assessee in order to enable the latter to provide necessary explanation. However, there is nothing on record that besides the AIR information, the AO has either these details in his possession or have sought these details by conducting further independent and direct enquiry during the course of assessment proceedings and which explains as to why the same were never shared with the assessee. Therefore, in such peculiar circumstances, where the assessee is disputing making any cash payments and in absence of any tangible material brought on record by the Revenue and shared with the assessee in order to enable the latter to put forward his explanation, we do not see any justifiable basis to make the addition in the hands of the assessee and the addition so made is hereby directed to be deleted. 25. We find that similar situation persist in respect of other addition of ₹ 474,040 made by the AO wherein the assessee has again requested to provide the requisite information/material in possession of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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