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TMI Blog2022 (3) TMI 294X X X X Extracts X X X X X X X X Extracts X X X X ..... essment on the basis that the assessee has made cash deposits of ₹ 21,10,000/- and has not filed the return of income, whereas, the assessee in fact has filed her return of income on 25.07.2011 declaring total income of ₹ 3,03,640/-, therefore, it is established that the reopening was based on incorrect/wrong facts and without application of mind and on borrowed satisfaction. Therefore, it has been held that the reopening of assessment on incorrect/wrong facts makes such reopening a nullity - Decided in favour of assessee. - ITA No. 8671/DEL/2019 - - - Dated:- 23-2-2022 - SHRI R. K. PANDA , ACCOUNTANT MEMBER For the Appellant : Rano Jain and Venketesh Chaursia , Advs For the Respondents : Om Prakash , Sr. DR ORDER This appeal filed by the assessee is directed against the order dated 18.10.2019 of the learned CIT(A)-14, New Delhi, relating to Assessment Year 2011-12. 2. Facts of the case, in brief, are that the assessee is an individual and filed her return of income on 25.07.2011 declaring total income of ₹ 3,03,640/-. Subsequently, the AO on the basis of information received that the assessee has deposited ₹ 21,10,000/- in her savi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aped assessment in this case is exceeds above Rupees One Lakh and the cash is falls under the meaning of section 149 of the Income Tax Act. 1961. It is pertinent to mention here that in this case the assessee has chosen not to file return of income for the year under consideration although the total income of the assessee had exceeded the maximum amount which is not chargeable to tax as discussed above and the assessee was assessable under the Act. In view of the above, the provisions of clause (a) of Explanation 2 to Section 147 are applicable to facts of this case and the assessment year under consideration is deemed to be a case where income chargeable to tax has escaped assessment. Keeping in view of the above facts, necessary approval u/s. 151(1) of the Income Tax Act, 1961 is being obtained separately from the Pr. Commissioner of Income Tax, Delhi-14, New Delhi. Sd/- SANDEEP JAIN, INCOME TAX OFFICER, WARD-40(1), New Delhi 2.1. Accordingly, notice u/s. 148 of the Act was issued on 28.03.2018 which was duly served upon the assessee. In response to the same, the assessee filed her reply along with copy of return of income filed manually by the assessee on 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the assessee strongly challenged the order of the Ld. CIT(A) in upholding the validity of reassessment proceedings. Referring to the reasons recorded, copy of which is placed at page 7 to 10 of the paper book, she submitted that the AO has reopened the case on the ground that the assessee has not filed her return of income. She submitted that again the AO in the reasons recorded has mentioned that since the assessee has not furnished any income tax return for the year under consideration, the verification of the information regarding the deposit of cash of ₹ 21,10,000/- in the bank account maintained with Punjab Sind Bank is not feasible. She submitted that a perusal of the above would clearly show that the whole premises of the reasons for reopening of the assessment is that the assessee has not filed her income tax return. Referring to page 1 of the paper book, she submitted that the assessee has duly filed her return of income u/s. 139(1) of the Act on 25.07.2011. Even in the form of recording of reasons placed at page 7 of the paper book, it has been mentioned in clause 8 that no valid return has been filed. Referring to the reasons recorded in the penultimate paragr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11.05.2021 6. M/s. Sungrow Impex Pvt. Ltd. Vs ITO, ITA No. 4183/Del/2019, dt. 19.03.2021 7. VRC Township Pvt. Ltd. Vs ITO, ITA No. 1503/Del/2017, dt. 14.10.2020 8. M/s. Madhu Apartment Pvt. Ltd. Vs ITO ITA Nos. 3869 and 3870/Del/2018, dt. 01.02.2021. 7. The Ld. Counsel for the assessee in her next plank of argument, referring to the following decisions submitted that only the bank deposits cannot be the reasons for reopening. She submitted that bank deposits per se cannot be a reason to form belief that income has escaped assessment that too without perusal of return filed by the assessee. i. Inder Jit vs ITO ITA No. 2740/2018, dt. 03.12.2018 ii. Tejender Kumar Ghai vs ITO ITA 970/2017, dt. 07.06.2017 iii. Sh. Saurabh Saini vs ITO, ITA 6003/Del/2018, dt. 05.09.2019 iv. Sh. Abrar Ahmed Quasimi vs ITO, ITA 3177/Del/2017, dt. 01.06.2018 8. She accordingly submitted that the reopening of the assessment made by the AO and upheld by the Ld. CIT(A) should be quashed. 8.1. So far as the merit of the case is concerned, she submitted that the assessee derives income from house property and business and profession and has applied the provisions of section 44AF of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the above shows that even the superior authority has also given her approval in a mechanical manner and without independent application of mind especially when the assessee has filed her return of income and reopening was made on the ground that no return has been filed. 12.1. It has been held in various decisions that reopening of the assessment on incorrect or wrong facts is a nullity. The Co-ordinate Bench of the Tribunal in the case of ACIT vs Asis Plywood P. Ltd. vide ITA No. 2144/Del/2015, dt. 28.01.2019 has observed as under:- 5.1 A perusal of the reasons shows that the Assessing Officer has clearly borrowed the information received from the Investigation Wing but he has not carried out any verification to test the veracity of the information which has been passed by the Investigation Wing. Thus, he has proceeded to form an opinion on the basis of borrowed reasons and there is no independent application of mind. It is also seen in the assessment order that the Assessing Officer had duly noted that the original return of income was filed on 22.02.2007 but has noted in the reasons that the assessee had not filed any return of income. Thus, the Assessing Officer has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Co-ordinate Bench of the Tribunal in the case of Deepak Gupta Sons vs ITO, vide ITA No. 8748/Del/2019, dt. 09.11.2020 has observed as under:- 4.1 We are of the considered view that the reasons recorded by the Assessing Officer is based on presumption and without application of mind by stating therein that assessee has not filed its return of income whereas the evidences produced by the assessee in the shape of paper book before the Ld. CIT(A) as well as before the Tribunal, establish that the assessee has filed the return of income for the assessment year in dispute, hence, the aforesaid decision of the Hon'ble Delhi High Court in the case of Pr. CIT vs. RMG Polyvinyl reported in (2017) 83 taxmann.com 348 (Delhi)/396 ITR 5 is squarely applicable here and therefore, applying the said ratio, the reassessment in the present case is bad in law and accordingly quashed and appeal of the assessee is allowed. 15. I find the Hon'ble Bombay High Court in the case of Ankita A. Choksey vs ITO, vide W.P. No. 3344/Del/2018, dt. 10.01.2019 (Bom HC) has observed as under:- 6. It is a settled position in law that the Assessing Officer acquires jurisdiction to issue a reope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stigation report. 17. The various other decisions relied upon by the ld. Counsel for the assessee also supports to the proposition that the reopening of the assessment on wrong facts or incorrect facts and without independent application of mind by the AO and on borrowed satisfaction makes such reopening a nullity. Since, the AO in the instant case, has reopened the assessment on the basis that the assessee has made cash deposits of ₹ 21,10,000/- and has not filed the return of income, whereas, the assessee in fact has filed her return of income on 25.07.2011 declaring total income of ₹ 3,03,640/-, therefore, it is established that the reopening was based on incorrect/wrong facts and without application of mind and on borrowed satisfaction. Therefore, relying upon the decisions cited (supra), wherein, it has been held that the reopening of assessment on incorrect/wrong facts makes such reopening a nullity, I hold that initiation of reassessment proceedings in the instant case on wrong facts that the assessee has not filed the return of income makes the reopening a nullity. I, therefore, quash the reopening of assessment in the instant case. The grounds challenging ..... X X X X Extracts X X X X X X X X Extracts X X X X
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