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TMI Blog2023 (12) TMI 1292X X X X Extracts X X X X X X X X Extracts X X X X ..... 6-08- 2019 and directing the assessing officer to pass an order, in accordance with law and that too by recording incorrect facts and findings and without observing the principles of natural justice and more particularly when all the necessary details/information/evidences were examined at the time of reassessment proceedings with regard to cash deposit. 3. That in any case and in any view of the matter, action of ld. Pr.CIT in passing the impugned order U/S 263 is bad in law and against the facts and circumstances of the case and is in violation of principles of natural justice. 4. That having regard to the facts and circumstances of the case, Ld. Pr. CIT has erred in law and on facts in assuming jurisdiction u/s 263 which is bad in law inter alia for this reason that the reassessment order passed u/s 1471143(3) dated 06.08.2019 which is sought to be revised u/s 263 itself was invalid inter alia on various grounds. as mentioned below and thus proceedings initiated u/s 263 against the invalid reassessment order is clearly bad in law. (a) That assumption of jurisdiction uls 147 is itself is bad in law as the reason recorded would not have led to the formation of belief of esca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atiala, Karnal and had received interest income at Rs. 7,7501- during the F.Y. 2011-12 relevant to AY. 2012-13 but he did not file the return of income for the period 2011-12 relevant to A.Y. 2012-13. 3. From the perusal of the ITS details, during the F.Y. 2011-12 relevant to A.Y.2012-13 it reveals that the assessee had made cash deposits to the tune of Rs. 72,00,0001- in his saving bank accounts and received interest at Rs. 7,7501- as per 26AS during the F.Y. 2011-12 relevant to AY. 2012-13. 4. After receiving the information that cash of Rs. 72,00,0001- was deposited in savings bank accounts and interest received at Rs 7,7501-during the. F.Y. 2011-12 relevant to A.Y. 2012-13 but return of income had not been filed by the assessee for the relevant period, case being worth investigation, approval was obtained uls 133(6) of IT Act, 1961 from the competent authority i.e. Pr. Commissioner of Income Tax, Karnal for further processing of the information. After getting the approval from the Worthy Pr. Commissioner of Income Tax, Karnal u/s 133(6) of IT Act, query letter was issued on 28.02.2019 for verification of transaction asking the assessee for furnishing the reply. In the lette ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 In this case more than four years have lapsed from the end of assessment year under consideration. Hence necessary sanction to issue notice u/s 148 has been obtained separately from Principal Commissioner of income Tax as per provisions of section 151 of the Income Tax Act, 1961." 9. Reasons for reopening the assessment are limited to the verification of the source of cash deposited in the Savings Bank account and interest earned on savings account. We find that while scrutinizing the return of income, during the course of scrutiny assessment proceedings, the Assessing Officer considered the reply of the assessee in respect of source of cash deposited in the Savings Bank account and after thorough scrutiny the Assessing Officer completed the assessment proceedings by observing as under: "Proceedings u/s 147 of the Act were initiated in this case vide notice u/s 148 of the Act dated 27.03.2019 issued 10. It can be seen from the findin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the appeal under consideration, held as under: "9. One of the contentions, which has been accepted by the tribunal is that the order of the Assessing Officer cannot be regarded as erroneous even if the Assessing Officer had failed to carry out necessary verification and required enquiries in respect of the share application money, as no addition has been made on account of the reasons for reopening, which were recorded before issue of notice under Section 148 of the Act. It has been held that the Assessing Officer could not have made an addition on account of share application money as no addition has been made on account of FDRs of Rs. 20 lacs. The tribunal has noticed and recorded that in the reasons for reopening it was mentioned that the assessee had made investment in form of FDRs of Rs. 20 lacs but in the assessment order passed under Section 147/143(3) of the Act it has been held that the respondent assessee had been able to show and establish the genuineness of and capacity to make the said investment. 10. Similar issue had arisen before this Court in Ranbaxy Laboratories Limited versus CIT, (2011) 336 ITR 136 (Delhi). In the said case, the Division Bench had also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the mere fact that the Assessing Officer entertained a reason to believe, albeit even a genuine reason to believe, would not continue to vest him with the jurisdiction, to subject to tax, any other income, chargeable to tax, which the Assessing Officer may find to have escaped assessment, and which may come to his notice subsequently, in the course of proceedings under section 147." 12. The Division Bench in Ranbaxy Laboratories Limited (supra)considered the judgment of the Supreme Court in the case of V. Jagmohan Rao versus CIT and EPT, (1970) 75 ITR 373(SC) and CIT versus Sun Engineering Works Private Limited, (1992) 198 ITR 297 (SC) and has then elucidated: "18. We are in complete agreement with the reasoning of the Division Bench of the Bombay High Court in the case of CIT v. Jet Airways (I) Limited [2011] 331 ITR 236 (Bom). We may also note that the heading of section 147 is "income escaping assessment" and that of section 148 "issue of notice where income escaped assessment". Sections 148 is supplementary and complimentary to section 147. Sub-section (2) of section 148 mandates reasons for issuance of notice by the Assessing Officer and sub-section (1) thereof mandates se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b fees, gifts and presents, etc., then in view of our discussion as above, he would have been justified as per Explanation 3 to reduce the claim of deduction under sections 80HH and 80-I as well." 13. On the second aspect raised by the Commissioner of Income Tax with regard to the Assessing Officer accepting the loss return of Rs. 1,02,756/-, we are of the view that the same did not require exercise of revisionary power under Section 263 of the Act. The observations of the Assessing Officer were only to the extent of stating that he had accepted the return. Benefit of carry forward of loss can be claimed in case a return is filed under Section 139(1). It is not the case of the Revenue that the assessee had tried to claim benefit of carry forward of loss on the basis of the order passed under Section 147/143(3) of the Act. 14. For exercise of power under Section 263 of the Act, it is mandatory that the order passed by the Assessing Officer should be erroneous and prejudicial to the interest of the Revenue. In the present case, the Assessing Officer did not make any addition for the reasons recorded at the time of issue of notice under Section 148 of the Act. This position is not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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