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TMI Blog2021 (10) TMI 1013X X X X Extracts X X X X X X X X Extracts X X X X ..... has stated that the reasons for reopening were duly conveyed to the assessee and therefore, on this basis itself, where the reasons have been duly communicated to the assessee, the contention so advanced by the ld A/R deserve to be rejected. As noted that the assessment was completed u/s 147 r/w 143(3) vide order dated 23.10.2015 and after completing of the assessment proceedings, the assessee is claiming to have requested the AO vide his letter dated 10.01.2017 to supply copy of the reasons. As during the entirety of the assessment proceedings, the assessee has neither sought copy of the reasons so recorded nor any objections have been filed against such reasons during the assessment proceedings and therefore, where the assessee has not sought and has infact participated in the assessment proceedings, we don t find there is any prejudice which has been caused to the assessee and even there is no violation of any of the directions so laid down by the Courts in this regard. Thus, the contention so advanced cannot be accepted. AO had no reason to believe but reason to suspect that the income has escapement assessment and there is no honest application of mind and it was c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e evidence has been placed on record in terms of past savings as so claimed and the contention so advanced is hereby dismissed. Plea of working out the peak credit - As been claimed that there are deposits which have been made out of earlier withdrawals during the year and the same has been ignored by the AO. In absence of any findings recorded by the AO, we set-aside the matter to the file of the AO to examine the said claim of the assessee and decide as per law after providing reasonable opportunity to the assessee. - ITA. No. 808/JP/2018 - - - Dated:- 21-10-2021 - Shri Sandeep Gosain, JM And Shri Vikram Singh Yadav, AM For the Assessee : Shri Mahendra Gargieya (Adv.) And Shri Devang Gargieya (Adv.) For the Revenue : Shri A.S. Nehra (Add.CIT) ORDER PER: VIKRAM SINGH YADAV, A.M. This is an appeal filed by the assessee against the order of ld. CIT(A)-2, Jaipur dated 15.03.2018 for the assessment year 2008-09. 2. Briefly the facts of the case are that based on review of the AIR information, the Assessing Officer observed that the assessee has made cash deposit of ₹ 22,97,600/- in his bank account maintained with ICICI Bank. Gi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quashed on this ground itself in absence of requisite approval from the competent authority U/s 151 of the Act. 7. In support of his contentions, reliance was placed on the Hon ble Delhi High Court decision in case of CIT vs. SPL s Siddhartha Ltd. (2012) taxmann.com 138, Hon ble Rajasthan High Court in case of Dhadda Exports vs. ITO (2015) 58 taxmann.com 176 and Hon ble Mumbai High Court decision in case of Miranda Tools (P.) Ltd. vs. ITO (2020) 114 taxmann.com 584. It was submitted that in the aforesaid decision of Hon ble Bombay High Court, an earlier decision in case of CIT vs. Aquatic Remedies (P.) Ltd. [2018] 96 taxmann.com 609 again passed by the Hon ble Mumbai High Court has been considered and an appeal filed by the Department against the said decision before the Hon ble Supreme Court has since been dismissed and case decided in favour of the assessee. 8. Per contra, the ld. DR has relied on the order of the lower authorities and it was submitted that the reopening of the assessment was done after recording of the reasons that the income to the tune of ₹ 22,97,600 has escaped assessment and after obtaining prior approval of the JCIT who was the competent au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sued under section 148 by an Assessing Officer, who is below the rank of [Joint] Commissioner, after the expiry of four years from the end of the relevant assessment year, unless the [Joint] Commissioner is satisfied, on the reasons recorded by such Assessing Officer, that it is a fit case for the issue of such notice. 11. Admittedly, in the instant case, no assessment u/s 143(3) or section 147 has been made for the impugned assessment year prior to issuance of notice u/s 148 of the Act and the impugned notice u/s 148 has been issued after the expiry of period of 4 years from the end of the impugned assessment year i.e. AY 2008-09. The provisions of Section 151(2) of the Act will be applicable in the instant case and in terms of which, the prior approval of the JCIT is required to be obtained before issuance of notice U/s 148 of the Act that it is a case fit case for such issuance of such notice and thus, JCIT has been designated as the competent authority. During the course of hearing, a report was called from the AO and on review of the report provide by ITO, Ward 6(1), Jaipur dated 12.04.2021, it is noted that the approval U/s 151 of the Act has been obtained from the Joi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee firm had already been completed under Section 143(3). It was stated that mistake was committed inadvertently and is curable by recourse to Section 292B of the IT Act. That plea is liable to be rejected because when specific provision has been inserted to the proviso to Section 151 (1), as a prerequisite condition for issuance of notice, namely, sanction of the Commissioner or the Chief Commissioner, the assessing officer cannot find escape route for not doing so by relying on Section 292B. The Delhi High Court in CIT Vs. SPL's Siddhartha Limited, has while holding that when a particular authority has been designated to record his/her satisfaction on any particular issue, then it is that authority alone who should apply his/her independent mind to record his/her satisfaction and satisfaction so recorded should be 'independent' and not 'borrowed' or 'dictated' satisfaction, rejected contention of the revenue that obtaining approval from the authority other than the one who was competent to grant such approval, was mere irregularity committed by the Income Tax Officer. And that it was rectifiable under Section 292B of the IT Act cannot be accepted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 23.10.2015 and after completing of the assessment proceedings, the assessee is claiming to have requested the AO vide his letter dated 10.01.2017 to supply copy of the reasons. We therefore find that during the entirety of the assessment proceedings, the assessee has neither sought copy of the reasons so recorded nor any objections have been filed against such reasons during the assessment proceedings and therefore, where the assessee has not sought and has infact participated in the assessment proceedings, we don t find there is any prejudice which has been caused to the assessee and even there is no violation of any of the directions so laid down by the Courts in this regard. Thus, the contention so advanced cannot be accepted. 18. Another contention which has been raised by the ld A/R is that the AO had no reason to believe but reason to suspect that the income has escapement assessment and there is no honest application of mind and it was clearly a case of borrowed satisfaction. We have gone through the reasons so recorded by the Assessing officer and find that the AO was having sufficient material in his possession for formation of prima facie belief that the incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ling ROI regularly which does not appear to be a correct fact. It is submitted that the assessee was already filing ROI in the past as well. The recent being in AY 2006-07, when the ROI was filed on dated 15.09.2006 declaring total income of ₹ 96,355/-. 22. It was submitted that it was mainly out of a gift of ₹ 3 Lakhs received from the mother through her bank account vide cheques no. 769252 and 769251 in the F.Y. 2004-05 and 2005-06 respectively and even a copy of bank statement of the assessee showing the deposit of ₹ 3,00,000/- was submitted before the AO vide letter dated 05.10.2015, and even reproduced and admitted by the AO at Pg 3. However, since the same was not available while appearing before the CIT (A), a specific request was made to the AO vide letter dated 10.01.17 to supply a copy of such bank statement but unfortunately there was no response given by the AO. Unfortunately, even the CIT (A) has comfortably ignored these facts and instead of calling for the assessment records, wrongly stated that Bank account of the assessee, showing corresponding credit, was not produced, which fact is contrary to the record available before AO. 23. It was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny case, the human probability preponders in favor of the assessee keeping in mind the entirety of the facts and circumstances that, a lady of 38 years from sindhi community, must have saved at least to the extent claimed. 26. It was also submitted that a reading of the impugned order suggest that the AO proceeded on mere suspicion and started with a negative mind in as much as the explanation w.r.t. the source of ₹ 6 lakhs from the wife was also rejected in a few words. Similarly, he doubted the deposit of the bank of ₹ 22,97,600/- saying that it was beyond imagination that a low paid employee was able to make savings of such a huge amount. Thus, the AO proceeded with a preconceived notion that the deposits made in the bank account was completely sourceless and that has certainly the acceptance of a valid and plausible explanation put forth by the assesse before him. 27. It was submitted that the assessee has been working since last several years. Belonging to Sindhi community where there is a tradition of entering into business at an early age, the appellant also started from the age of 15 years and continued till he was 29 years in relevant assessment year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... available of ₹ 3,20,000/- of which a sum of ₹ 3,00,000/- received on account of gift from mother duly supported by copies of cheques(PB 19-20), if considered, leaves a mere sum of ₹ 5,66,100/- which otherwise sourced from the savings of his wife. The ld. CIT (A) is silent on this aspect. In support, reliance was placed on the following decisions:- Sind Medical Stores vs. CIT (2015) 117 DTR 78 (Raj.) Chetan Gupta vs. ACIT (2013) 144 ITD 344 (Del.) Smt. Maina Devi v/s ITO (2005) 98 TTJ 21 (JD) ACIT v/s Ram Gopal Manda (2008) 40 TW 16 (Jd) Thyarmal Bal Chand 165 ITR 453 (Raj). 30. It was submitted that the AO completely ignored the settled law that u/s 68, 69 etc. only a discretion has been conferred upon the AO to be exercised judiciously but he is not always obliged to make the addition if the explanation is not found satisfactory. Kindly refer CIT v/s P. K. Noorjahan (1999) 237 ITR 570 (SC). In view of the above facts of availability of sufficient cash, the impugned addition may kindly be deleted in full. 31. Per contra, the ld. DR has relied on the order of the lower authorities and our reference was drawn to the findi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cord. The issue under consideration relates to source of cash deposits of ₹ 14,97,600/- in the bank account maintained by the assessee. 33. Firstly, it has been claimed that an amount of ₹ 3,20,000/- has been deposited out of opening cash in hand as on 1.04.2007 and the source of such opening cash in hand has been claimed to be receipt of gift of ₹ 3,00,000/- from the assessee s mother in the financial year 2004-05 and 2005-06. The ld CIT(A) has returned a finding that claim of gift from the mother couldn t be proved and copies of cheques produced were illegible and corresponding bank account of the assessee in which the same were deposited were also not produced. It has been claimed before us that the copies of cheques as well as bank statement of the assessee showing deposit of cheque were submitted before the AO and the same has not been considered by the ld CIT(A). We accordingly remand the matter back to the file of the AO to verify the said claim of the assessee and decide as per law after providing reasonable opportunity to the assessee. 34. Secondly, it has been claimed that an amount of ₹ 6,00,000/- has been deposited out of tuition fee re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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