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TMI Blog2018 (9) TMI 2098X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.2014, in stark contravention of the Tribunal s direction that if within three months of receipt of the Tribunal order dated 11.04.2012, the AO was not able to supply to the assessee, the VDIS declaration, he would drop the reassessment proceedings. All this material, as such, has not been shown to have been in the possession of the AO at the time of recording of the reasons to believe escapement of income. In para 4 of the original assessment order dated 30.03.2006, the AO stated that the reasons were recorded on the basis of the information, as above, received from the CBDT, that the assessee s contention that she had not declared any income in VDIS 1997, did not appear to be correct and that the total income was being assessed, believing the information sent by the CBDT. Hence, even as per the AO himself, none of the documents referred to by the CIT(A), i.e., the VDIS form, the assessee s affidavit, the report of the valuation of the jewellery in the assessee s name and the copy of account for the disallowance made under VDIS 1997, was in the possession of the AO at the time of the recording of the reasons. AO based the reopening merely on the bare information receive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings started vide issue of notice u/s 148 and the assessment framed is bad in law and deserves to be quashed. 1.2 Re:- Assessment completed beyond time limit i) Order passed u/ 143(3)/254 is without jurisdiction and beyond the time period as per the direction given by Hon'ble ITAT and hence the Ld. CIT Appeal should have quashed the assessment framed. 1.3 Re:- Addition of Rs.10,02,950/- as income from Undisclosed sources having been invested against jewellery and thus unexplained investment under the deeming provisions of the Act:- i) Addition is wrong, illegal, arbitrary, against the facts of the case, legally without jurisdiction as since the start of the proceedings the assessee repeatedly submitted that she has not filed any declaration under VDIS-97 . ii) Alternate ground that VDIS-97 was to make declaration upto A.Y. 1997-98 and hence no addition in A.Y. 1998-99 can be made. iii) Considering the grounds as above either the assessment deserves to be quashed or the addition deserves to be deleted. 2. Because considering the facts of the case and legal position the assessment framed u/s 143(3)/254 deserves to be quash ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... feel satisfied with the reply of the assessee and assessed the total income of the assessee at Rs. 10,02.948/- on the belief of information sent by the CBDT and completed the assessment u/s 143(3)/147 on 30.03.2006. 7. The assessee filed appeal before the ld. CIT(A), who confirmed the addition. 8. Against the order of the ld. CIT(A), the assessee filed appeal before the ITAT. The ITAT sent the matter back to the AO with the direction that: The matter requires reconsideration at the level of the AO. We accordingly set aside the orders of the Authorities below and restore both the issues of reopening of assessment and addition on merit to the file of the AO with the direction to redecide both the issues by giving reasonable and sufficient opportunity of being heard to the assessee. The AO is directed to supply copy of VDIS 1997 declaration alleged to have been filed by the assessee as per information of the CBDT within three months from the date of receipt of this order. Thereafter, the AO shall decide the objection of the assessee for reopening the assessment by a speaking order and shall pass a reasoned order. We make it clear that in case the AO is not able to supply th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment at the same income as original assessment. The AO had passed the assessment u/s 143(3)/254 for A.Y. 2009-10 in place of assessment u/s 147/143(3)/254 for A.Y.2009-10 in the demand notice u/s 156 and notice u/s 271 (1 )(c) also the A.Y. was mentioned as 2009-10. When the AO came to know that three months had passed in 03rd August 2012 for supplying the documents as per the mandatory direction of the ITAT, he filed an application before the ITAT on 26.02.2014 for extension of time to rectify his mistake and sought modification of the final order of the ITAT, dt.11.04.2012. In the hearing on this application the Revenue had admitted that it did not intend to move any application for rectification u/s 254(2) of the IT Act. The DR requested to extend the time limit and the AR had objected the same. The ITAT, vide order dated 29.04.2014 held that: We do not find any justification to review the earlier order of the Tribunal dated 11.04.2012. The AY under appeal is 1998-99 and the appeal of the assessee was heard on 11.04.2012, also disposed off on 11.04.2012 itself. The orders of the Authorities below were set aside and the issue of reopening of the assessment and addition o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1) read with section 254 of the IT Act on 21.01.2013, asking the assessee to produce evidence regarding declaration filed by you under VDIS-1997 , despite the Tribunal s specific observations in para 4 of its order that the assessee could not be put to prove the negative that she had not made any declaration under VDIS-1997, that since the AO wanted to rely on such declaration, it was his onus to prove such declaration having been made by the assessee, and that in spite of no such verification having been made by the AO on remand, the CIT(A) dismissed the assessee s appeal without justification. 12. Then, when the assessee, vide reply dated 29.01.2013, pointed out to the AO the Tribunal s direction to supply to the assessee, the VDIS-1997 declaration, the AO supplied the VDIS declaration to the assessee on 18.02.2014, alongwith the assessee s purported affidavit, report of valuation of jewellery in the assessee s name and copy of accounts for disclosure made under VDIS-1997. The assessee was required to explain how she had been negating the declaration in the face of these documents. 13. On 26.02.2014, the Department filed an application before the Tribunal, seeking extensi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded the assessee s VDIS form, the assessee s affidavit, report of valuation of jewellery in the assessee s name and copy of account for the disclosure made under VDIS-1997. The ld. CIT(A) confirmed the reopening of the assessee s completed assessment. 18. The first question is whether the CIT(A) s action in this regard is correct as per law. 19. The AO reopened the assessee s completed assessment on the basis of, as stated in the reasons recorded, information received from the CBDT that the assessee had filed a declaration under VDIS-1997. First of all, the reasons recorded on 31.03.2005 by the AO only speak all the information received from the CBDT regarding the alleged declaration by the assessee. The reasons were supplied to the assessee on 20.03.2006. No such alleged declaration was, however, provided to the assessee. In the first round, in his remand report (APB-36) dated 2.10.2006, the AO expressed before the CIT(A) that the VDIS-1997 disclosure was needed in original, in order to verify such disclosure. The CIT(A), however, did not take any further steps in this regard. It was only when the Tribunal, vide order dated 11.04.2012, remanded the matter to the AO, directin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the AO at the time of the recording of the reasons. It was only in the notice (reproduced at pages 3-4 of the assessment order dated 18.03.2014) dated 18.2.2014, issued u/s 142(1) r.w.s. 254 of the IT Act, that all these documents were mentioned by the AO for the first time. The CIT(A), thus, has clearly erred in holding, in para 9.1 of the impugned order, that the reopening of the assessment was based on all such material which, according to the ld. CIT(A), was in the possession of the AO. The CIT(A) s order in this regard is based on a complete mis-reading and non-reading of the material available on record. As such, this conclusion of the CIT(A) is unsustainable. The AO based the reopening merely on the bare information received by him from the CBDT that the assessee had filed a declaration under the VDIS 1997, in which, he (sic-she) had declared an amount of Rs.10,02,948/- on 31.12.1997, but had not paid the tax thereon and the Certificate was not issued to him (sic-her). It was this bald so called information, which was reproduced by the AO in the reasons recorded and he, without any further inquiry thereon, i.e., without any independent application of his own mind to it, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rison of such signature with those on other documents. Now, this is wholly unsustainable in law. The correct course was to refer the matter to a hand writing expert, rather than taking recourse to mere assumptions and surmises, as has been done by both the Authorities below. At this juncture, the remand report dated 02.10.2006, furnished by the AO before the ld. CIT(A) in the first round needs be adverted to. Therein, the AO requested that: The evidence may be referred to the competent authority for verification of hand-writing . However, this request was not acceded too. It was also not so done in the second round. Now, substituting one s own judgment where the situation demands the opinion of an expert in the concerned field is not countenanced in law. A signature appearing to the AO to be resembling others does not Prove , in the absence of a studied expert opinion of a hand writing expert, the first stated signature to be that of one appending the others. Meanwhile, the CIT(A) s opinion that the assessee s signature on the VDIS declaration is exactly the same as that on her statement before the ITO, is no substitute for a hand-writing expert s report. 24. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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