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TMI Blog2022 (9) TMI 1029X X X X Extracts X X X X X X X X Extracts X X X X ..... d be tested in event of a challenge by assessee.The entire recorded reason is erroneous. The ld AO acted beyond jurisdiction. Accordingly, the order passed u/s 147/143(3) of the Act is non est. We are in opinion that the assessment order passed by the ld. AO is erroneous and bad in law. CIT(A) had not considered the legal point in his order. Decided in favour of assessee. - I.T.A. Nos. 02 And 03/Asr/2021 - - - Dated:- 20-9-2022 - Dr. M. L. Meena, Accountant Member And Sh. Anikesh Banerjee, Judicial Member For the Appellant : None (Written submission) For the Respondent : Sh.Ghansham Sharma, Sr. DR. ORDER PER:ANIKESH BANERJEE, JM: The instant appealsof the assessee are directed against the order of the ld. Commissioner of Income Tax (Appeals)-2, Amritsar, (Camp at Jammu)[in brevity the ld. CIT(A)] bearing appeal 157/2015-16 and 158/15-16, date of order 09.03.2018, the order passed u/s 250 (6) of the Income Tax Act 1961, [in brevity the Act] for A.Ys. 2008-09 and 2009-10.The impugned orders were originated from the order of the Income Tax Officer, Anantnag, (in brevity the AO) order passed u/s 144/147 for A.Y. 2008-09 and u/s 143(3)/147 for A.Y. 2009- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A.O. was justified in apparently dismissing right/claim of the appellant that no books of accounts and records were needed to be produced before justifying the correctness of initiation of reassessment proceedings without deciding the case on merits of appeal filed. 4. The assessee filed both the appeals on same issue and both reopened u/s 148 of the Act. For the sake of brevity the appeal in ITA no. 02/ASR/2021 is taken as lead case. 5 . The brief fact of the case is that the assessee s case is reopened u/s 148 of the Act on the ground that the assessee is one of the settlers of M/s Mars Educational Trust, (M.E.T.) situated at village Sangam Tehsil Bijbehara Distt. Anantnag. The assessee is jointly and separately owner of land and building with the trust and assessee took loan from bank after mortgaging the their land and building. The total value of the assets was Rs.9,46,05,848/- and also a capital fund Rs.1,33,75,750/- was as source of the investment. During assessment proceeding the ld. AO did not illuminate any point related to recorded reason which was formed on the basis of reasons to believe. But the entire addition was made on basis of income from petrol pump am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 Value of building Rs. 3,90,56,810.00 Total Rs. 9,46,05,848.00 In the cash flow statement submitted to the bank by the assessee, the assessee has shown increase in capital fund account at Rs. 1,33,75,750/= during the year under consideration without giving details of source of investment. Perusal of the records available in this office reveal that assessee has failed to file the return of income for the assessment year 2008-09 and for immediately preceding assessment years, failed to disclose 1the above assets and monies disclosed by him before the J K Bank Limited Bus Add Anantnag for raising loan. The above value of land and buildings and monies including addition to the capital fund are, therefore, income of the assessee from un-disclosed sources. Accordingly I have reason to believe that income of Rs.10,79,81,598/= as discussed above has escaped assessment in this case. In order to tax the income escaped assessment as mentioned above and any other income which will come to the notice of the undersigned subsequently in the course of assessment proceedings, notice under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion does not stand test of law and thus the proceedings are ab initio invalid and bad in law. a. Phool Chand Bajrang Lai v ITO (1993) 203 ITR 456 (SC) b. Gujarat Narmada Valley Fertilizers Co. Ltd. .v. Dy. CIT (2014) 369 ITR 763 / 223 Taxman 109 (Guj.)(HC). D. That it has been held in following cases that if no addition is made on the issue forming part of the Reasons to believe or the grounds on which re-assessment notices was issued U/s 148 of the Act was dropped, A.O. could not assess or reassess any other income or any addition can be made on subsequently identified issue under any pretext. a. Ranbaxy Laboratories Ltd. Vs. CIT [2011] 336 ITR 136 (Del.), b. CIT Vs. Jet Airways (I) Ltd. [2011] 331 ITR 236 (Bom.), c. AdhunikNiryatIspat Ltd. [2011] 63 DTR 212 (Del.) d. CIT vs. Double Dot Finance Ltd., [2013] 31 taxmann.com 352 (Bom.) e. CIT vs Mohmed Juned Dadani [2013] 30 taxmann.coml (Guj.) E. That the appellant forcefully submits that the return of income for the assessment year 2008-09 stands already filed on 27/03/2009 as stated hereinabove and the case has been assessed U/s 143(1)(a). Therefore, under provisions of Income Tax Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... son and addition of the income. The entire reasons to believe are itself erroneous and not established on the true fact. Respectfully considered the order of Jet Airways (I) Ltd , supra the basis of issuance of notice U/s 148 is non discloser of primary facts by the assessee. The fact which was ascertained / verified by the AO is itself erroneous. However, if after issuing a notice under section 148, he accepts contention of assessee and holds that income, for which he had initially formed a reason to believe that it had escaped assessment, has, as a matter of fact, not escaped assessment, it is not open to him to independently assess some other income. If the ld. AO intends to do so, a fresh notice under section 148 would be necessary, legality of which would be tested in event of a challenge by assessee.The entire recorded reason is erroneous. The ld AO acted beyond jurisdiction. Accordingly, the order passed u/s 147/143(3) of the Act is non est. The ld. Counsel had relied on the judgments of the Hon ble Apex Court. Considering the ratio decidendi of the judgments, we are in opinion that the assessment order passed by the ld. AO is erroneous and bad in law. The ld. CIT(A) had no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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