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TMI Blog2024 (1) TMI 259X X X X Extracts X X X X X X X X Extracts X X X X ..... miss. Expectation that an income may arise in the hands of an assessee i.e, based on a contingency in the future, can by no means justify assumption of jurisdiction u/s 147 of the Act. When the AO holding a bonafide belief that the income of another person, viz. Shri. Inder Lal Ramrakhyani had escaped assessment, and on the said basis had initiated proceedings u/s 147 of the Act on a substantive basis in the case of the said person, then, it is beyond comprehension that the AO after holding a belief that the amount was the income of another person, could have thereafter simultaneously held the said amount as the income of the assessee chargeable to tax that had escaped assessment - notice issued by the A.O u/s. 148 quashed for want of valid assumption of jurisdiction. Decided in favour of assessee. - Shri Ravish Sood, Judicial Member For the Assessee : Shri R.B Doshi, CA For the Revenue : Shri Piyush Tripathi, Sr. DR ORDER PER RAVISH SOOD, JM The present appeal filed by the assessee is directed against the order passed by the Commissioner of Income-Tax (Appeals), National Faceless Appeal Center (NFAC), Delhi, dated 14.03.2023, which in turn ari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e year under consideration. On the basis of the aforesaid facts, the A.O holding a conviction that the assessee was found to be the owner of unexplained money of Rs. 1.50 lac (supra) which was deposited in his bank account in cash on 08.06.2013, reopened his case u/s. 147 of the Act. Notice u/s. 148 of the Act dated 30.03.2021 was issued to the assessee. In compliance, the assessee had filed his return of income for A.Y.2014-15 on 23.04.2021, declaring an income of Rs. 2,09,790/-. 4. As is discernible from the assessment order, the assessee, on being queried about the nature and source of the cash deposit of Rs. 1.50 lac (supra) in his bank account, had submitted that the same was sourced out of his accumulated savings that were generated out of his salary income that was earned over the years. Apart from that, it was stated by the assessee that he was also in receipt of interest income from his savings bank account a/w. that which was received on the unsecured loan advanced to Shri Inder Lal Ramrakhyani (supra). As the A.O was not satisfied with the aforesaid explanation of the assessee, therefore, he held the amount of Rs. 1.50 lac (supra) as the unexplained income of the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that income may be brought to tax in the hands of the assessee on a contingency which may emerge in future, therein, would not satisfy the condition of formation of a bonafide belief which was a sine-qua-non for initiating proceedings u/s. 147 of the Act. In order to support his aforesaid claim the Ld. AR had relied on the judgments of the Hon ble High Court of Bombay in the case of DHFL Venture Capital Fund Vs. Income Tax Officer, (2013) 358 ITR 471 (Bom) and that of Pavan Morarka Vs. Assistant Commissioner of Income Tax, (2022) 325 CTR 377 (Bom.). Also, support was drawn by the Ld. AR from the order of the ITAT, Bangalore in the case of DCIT Vs. Bullion Investments Financial Services (P) Ltd. (2010) 123 ITD 568 (Bang.). On the basis of his aforesaid contention, it was submitted by the Ld. AR that as the A.O had wrongly assumed jurisdiction and initiated proceedings u/s. 147 of the Act in the case of the assessee, therefore, the said impugned proceedings were liable to be quashed for want of valid assumption of jurisdiction. 10. Per contra, the Ld. Departmental Representative (for short DR ) relied on the orders of the lower authorities. 11. As the assessee has assailed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reason which is present to his mind when he forms a belief that the income of the assessee had escaped assessment. It was further observed by the Hon ble High Court that recourse to Section 148 cannot be founded in law on a hypothesis of what would be the position in future should an appeal before the appellate authority, being the Tribunal or the High Court, result in a particular outcome. In sum and substance, it was observed by the Hon ble High Court that the statute does not contemplate the reopening of an assessment u/s. 148 on such a hypothesis or a contingency which may emerge in the future. Elaborating further, the Hon ble High Court by referring to Sampath Ayengar s Law of Income Tax, Vol-VI, Page 9724, had observed that a protective assessment is regarded as being protective because it is an assessment which is made ex abundanti cautela, i.e where the department has a doubt as to the person who is or will be deemed to be in receipt of income . It was further observed that when recourse is sought to be taken to the provisions of Section 148, there has necessarily to be a fulfillment of the jurisdictional requirement that the A.O must have reason to believe that income of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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