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TMI Blog2022 (2) TMI 1141X X X X Extracts X X X X X X X X Extracts X X X X ..... e other reassessment proceeding for the year under consideration, cannot be sustained. We, thus, are unable to persuade ourselves to subscribe to the validity of the reassessment proceedings, i.e, the proceedings that had culminated into the impugned assessment order u/s 144 r.w.s 147, dated 27.12.2016. Valid sanction/approval as contemplated in sub-section (1) of section 151 - Pr. Commissioner of Income Tax-II, Amritsar despite the aforesaid serious infirmity, wherein the AO, i.e, ITO, Ward-5(2), Amritsar had on the same day, i.e, 28.03.2016 approached hi for his sanction/approval for taking recourse to parallel reassessment proceedings against the assessee, i.e, for the same year and, he had in a most mechanical manner, on the same day, i.e, on 28.03.2016 granted his sanction/approval as contemplated in sub-section (1) of section 151 of the Act, i.e, for both the reassessment proceedings that were taken recourse to by the A.O. On a perusal of the sanction granted by the Pr. Commissioner Of Income Tax-II, Amritsar, we find that on both the occasions the same has been granted by him in a mechanical manner by simply scribbling. Manner in which the approval/sanction had been granted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer u/s. 144 r.w.s 147 of the Income-Tax Act, 1961 ("Act", for short), dated 27.12.2016 for Assessment Year 2009-10. 2. The assessee has assailed the impugned order on the following grounds of appeal before us : "1. That the Appellate Order passed by Worthy CIT(A) u/s 250(6) of the Incometax Act, 1961 is illegal, arbitrary and contrary to the facts on records and this illegality pervades all other grounds of appeal. 2. That the Ld. Assessing Officer has erred in law while passing the Assessment Order u/s 144 of Income-tax Act, 1961 instead of u/s 143(3) of Income-tax Act, 1961, which proves that Assessment framed by him was without application of mind and in post haste manner and the Worthy CIT(A) has impliedly approved it without going through the facts and without adjudicate on this ground of appeal as accordance with law. 3. That the Ld. Assessing Officer has erred in law for assuming jurisdiction to make reassessment u/s 148 without fulfilling the mandatory requirement of service of notice u/s 148 of Income-tax Act, 1961 within stipulated period as provided by law as well as reopening based on AIR information only and the Worthy CIT(A) has impliedly approved it withou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the same. 8. That the appellant was prevented by good and sufficient cause from attending the income-tax proceedings because neither any notice u/s 142(1) received by him and nor any affixture had been made in his house premises mentioned in assessment order by the Ld. AO. Issuance and service of a valid notice in a pre-requisite for framing assessment/reassessment and the Worthy CIT(A) has similarly erred on facts and in law in confirming the same. 9. That the Ld. Assessing Officer has acted post haste in framing exparte assessment without affording reasonable opportunity of being heard to the appellant and accordingly the appellant was prevented by sufficient cause in not being able to represent his case and the Worthy CIT(A) has similarly erred on facts and in law in confirming the same. Without prejudice to above contention about the orders being illegal, null and void. 10. That on facts and in law the Ld. Assessing Officer and the Worthy CIT(A) both has failed to take cognizance on the source of deposit with concrete evidences produced before them and both of them has added as escaped income without giving any reason as well as without application of mind, which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its. In so far the contentions that were advanced by the assessee as regards the validity of the reopening of his case, the same did not find favor with the CIT(A) who upheld the same. As regards the challenge thrown by the assessee to the merits of the additions, the CIT(A) partly finding favor with the same scaled down the addition of ₹ 3,79,71,240/- that was made by the AO to an amount of ₹ 1,84,39,234/-, viz. (i) cash deposit in the bank accounts : ₹ 1,82,93,187/-; and (ii) interest credited in the bank accounts : ₹ 1,46,047/-. 6. The assessee being aggrieved with the order of the CIT(A) has carried the matter in appeal before us. 7. We have heard the Ld. Authorized Representatives for both the parties, perused the orders of the lower authorities and the material available on record, as well as considered the judicial pronouncements that have been pressed into service by the Ld. AR in order to support his respective contentions. Before us the Ld. AR has challenged the validity of the reopening of the assessee's case on multiple grounds, viz. (i) that a perusal of the 'reasons to believe' on the basis of which the case of the assessee had been reopened ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 77; 43.47 lac (supra) in question were sourced out of the agriculture income of the assessee, had thus refrained from drawing any adverse inferences and making any addition in his hands. However, we find that after framing of the aforesaid assessment u/s 147 r.w.s 143(3) dated 08.11.2016, the AO had thereafter proceeded with the reassessment proceedings that were separately initiated by him vide Notice u/s 148, dated 29.03.2016, for the reason, that the assessee had failed to prove the source of cash deposit of ₹ 95 lac (supra) in his bank A/c, and had thereafter framed the impugned assessment in question vide his order passed u/s 144 r.w.s 147, dated 27.12.2016, determining the assessee's income at ₹ 3,79,71,240/-. At this stage, we may herein observe, that as the reassessment proceedings in the case of the assessee for the same year, i.e A.Y 2009-10, were initiated by the AO, i.e., ITO, Ward-5(2), Amritsar, on the basis of two Notices u/s 148, dated 29.03.2016, both of which were backed by separate reasons to believe, viz. (i) Notice u/s 148, dated 29.03.2016 that was issued for the reason, that the assessee had failed to prove the source of the cash deposit of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f ₹ 43.47 lac (supra) in his bank account [which thereafter had culminated into an assessment vide an order u/s 147 r.w.s. 143(3), dated 08.11.2016] (Page 34 of "APB"), we find that the reference number therein mentioned is 11480 a/w EP 37062924 1 IN (bar code), while for as per the Notice u/s 148, dated 29.03.2016 that was issued by the same A.O, i.e, ITO, Ward-5(2), Amritsar to the assessee, for the reason, that he had failed to prove the source of the cash deposit of ₹ 95,00,000/- in his bank A/c (Page 38 of APB) the reference number therein mentioned is 11517 a/w EP 37063115 7 IN (bar code). On the basis of the aforesaid reference numbers mentioned on the face of the aforementioned Notices u/s 148, dated 29.03.2016, it can safely be inferred that the Notice u/s 148, dated 29.03.2016 that was issued by the AO, for the reason, that the assessee had failed to prove the source of the cash deposits of ₹ 43.47 lac (supra) in his bank account was issued anterior/prior to the other notice. Apart from that, the fact that the reopening of the assessee's case u/s 147 of the Act, for the reason, that he had failed to prove the source of the cash deposits of ₹ 43.47 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 148, dated 29.03.2016, qua the unexplained cash deposits of ₹ 43.47 (supra) in the assessee's bank account, which thereafter had culminated into an assessment u/s 147 r.w.s 143(3), dated 08.11.2016, was clearly divested of his jurisdiction from initiating another reassessment proceeding by issuing Notice u/s 148, dated 29.03.2016, on the ground, that the assessee had failed to explain the source of the cash deposit of ₹ 95 lac (supra) in his another bank A/c. We are of a strong conviction that an AO is precluded from simultaneously embarking upon two set of proceedings u/s 147 of the Act, in respect of an assessee, for the same year. In our considered view, now when the AO held a bonafide belief that the assessee had failed to explain the source of cash deposits of ₹ 43.47 lacs (supra) and ₹ 95 lac (supra) in his bank accounts, then, he ought to have initiated reassessment proceedings on the basis of his aforesaid belief by issuing one Notice u/s 148 of the Act, and could not have taken recourse to initiation of piecemeal reassessment proceedings qua both the aforesaid issues. Apart from that, we are of the considered view, that during the pendency of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice is issued under section 148 of the Act, it triggers initiation of proceedings for assessment or reassessment of income which may have escaped assessment earlier. During such assessment, any income which may come to the notice of Assessing Officer may also be brought to tax. Till this assessment is not completed, it would not be possible for him to form a belief that income chargeable to tax had escaped assessment. Until the assessment, be it original or reopened, is pending before the Assessing Officer, the question of issuing notice for reopening would not arise. As noted, in case of Ranchhoddas Karsondas (supra), the Supreme Court had taken a view that till the assessment proceedings are pending, it cannot be stated that there was escapement of income. To our mind, there is no distinction whether the pending assessment is pursuant to the return filed by the assessee originally or in response to the notice of reassessment issued by the Assessing Officer. In either case within the contours of the provisions for assessment, the assessment of the income of the assessee at the hands of the Revenue is at large. 8. We are conscious that the conclusion that we have arrived at, may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment, would not commence assessment proceedings and whenever so declared, such a declaration would relate back to the original issuance thereof. In such a situation, if the Revenue has issued a second notice for reopening, the same would not be rendered invalid. In this context we may recall, the Supreme Court in case of Ranchhoddas Karsondas (supra), in the context of notice of reopening issued pending a return of nil income filed by the assessee linked the validity of the notice to the validity of the return observing that if the return filed by the assessee was no return, the conditions of section 34 (of the Act of 1922) would apply and the Assessing Officer could carry out the assessment." 17. When therefore in the present case the first notice of reopening of assessment was not withdrawn, there was no scope, nor permissible in law to issue fresh notice of reopening. Counsel for the Revenue, however, vehemently contended that such withdrawal of notice of reopening must be deduced from facts and attendant circumstances. His contention was that the Revenue had, all along, intended to withdraw the notice and the fact, that such notice was abandoned, was sufficient to est ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccount that as per him had escaped assessment (which thereafter had culminated into an assessment u/s 147 r.w.s 143(3), dated 08.11.2016), he was clearly divested of his jurisdiction from initiating another set of reassessment proceeding, i.e, the impugned reassessment proceeding in question by issuing another Notice u/s 148, dated 29.03.2016, on the ground, that the assessee had failed to prove the source of cash deposit of ₹ 95 lac (supra) in his another bank A/c. In the backdrop of the aforesaid facts r.w the settled position of law, we are of the considered view, that the reassessment proceedings initiated by the A.O, vide the impugned Notice u/s 148, dated 29.03.2016, i.e, during the pendency of the other reassessment proceeding for the year under consideration, cannot be sustained. We, thus, are unable to persuade ourselves to subscribe to the validity of the reassessment proceedings, i.e, the proceedings that had culminated into the impugned assessment order u/s 144 r.w.s 147, dated 27.12.2016. 10. Apart from that, we find that the Pr. Commissioner of Income Tax-II, Amritsar despite the aforesaid serious infirmity, wherein the AO, i.e, ITO, Ward-5(2), Amritsar had on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ined under a mistaken belief as regards the validity of such parallel reassessment proceedings, but what disturbs us is the fact, that while sanctioning the issuance of the second Notice u/s 148, dated 29.03.2016, which as observed by hereinabove had culminated into the impugned assessment order u/s 144 r.w.s 147, dated 27.12.2016, there is no reference or mention about the approval/sanction that was already granted by him on the earlier occasion, and the same therein leads to serious doubts as regards application of mind by him at the time of grant of approval to the impugned reasons to believe. Considering the totality of the facts before us, we are of a strong conviction that the sanctioning authority, i.e, the Pr. Commissioner of Income-tax-II, Amritsar had granted his sanction u/s 151 of the Act, in a mechanical manner, i.e, without application of mind to the facts of the case and the material available on record. 11. We, thus, in terms of our aforesaid observations are neither able to concur with the lower authorities as regards the validity of the reassessment order passed by the AO u/s 144 r.w.s. 147 of the Act, dated 27.12.2016, for the reason, that the same were initiate ..... X X X X Extracts X X X X X X X X Extracts X X X X
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