9911796707
TMI Blog2024 (3) TMI 954X X X X Extracts X X X X X X X X Extracts X X X X ..... 25th March 2021 issued by the Income Tax Officer, Exemption Ward 1(1), Pune under Section 148 of the Income Tax Act, 1961 ("the Act") and the order dated 3rd March 2022 rejecting the objections raised by Petitioner to the notice of reopening the assessment proceedings. 3. Petitioner is a public charitable trust registered under the Bombay Public Trusts Act, 1950. It is also registered under Section 12A of the Act and is thus, eligible to claim exemption under Section 11 of the Act. 4. Petitioner filed its return of income ("ROI") on 22nd September 2014 for Assessment Year ("AY") 2014-15 disclosing 'Nil' income claiming exemption under Section 11 of the Act. The ROI was processed under Section 143(1) of the Act raising certain demands whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion result has been described as 'Undisclosed Income' by the DDCIT(I&CI)-2, Pune. 3. I have, therefore, reason to believe that an income to the tune of Rs. 2,76,49,804/- has escaped assessment within the meaning of the Explanation 2(b) to sec. 147 of the Income-tax Act, 1961. Therefore, this is a fit case for initiation of proceedings u/s 147 of the Income-tax Act, 1961. 4. In this case more than four years have been lapsed from the end of the A.Y. under consideration. Hence, necessary sanction to issue notice u/s 148 has been obtained separately from the Commissioner of Income-tax (Exemptions), Pune as required u/s 151 of the Income-tax Act, 1961." The only reason to justify reopening proceeding, therefore, was in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ipts in cash were deposited in bank accounts, recorded, accounted and audited and hence, there was no bank account which is undisclosed and all amounts were offered for taxation. The AO was seized with all this information which was provided by Petitioner but yet, proceeded to invoke the power to issue notice as a tool to undertake a roving enquiry. 8. Mr. Suresh Kumar for the Revenue counters the arguments of Petitioner by stating that Petitioner had made cash deposits with the State Bank of India, Alandi Branch, which information was uploaded in the system by the DDIT/ADIT(I&CI)-2, Pune. The information was flagged under the category of 'High Risk CRIU/VRU'. The Department observed that gross receipts disclosed by Petitioner were only 9, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... belief before he can issue notice under Section 148 of the Act. The reasons cannot be based on a suspicion subject to a case of fishing enquiry. 10. It is further noticed from the documents on record that there was no reason nor any justification given in the notice to even arrive at a prima facie finding that the cash deposits led to escapement of income. There was no response to Petitioner's requests for information regarding alleged undisclosed income pertaining to cash deposits over and above the deposits in the bank account. The impugned order does not even controvert the objection raised by Petitioner that the cash collected was not only deposited in its bank account but was also duly offered to tax. 11. It is settled law that a re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndoubtedly, there is no undisclosed cash over and above the deposits in its regular bank accounts which were offered for taxation. Thus, there is no material or fact which has been stated in the reasons for reopening assessment in the present case on which any belief can be founded of the nature contemplated by law. 13. The Apex Court in the case of Income Tax Officer, I Ward, Distt.VI, Calcutta and Ors. v. Lakhmani Mewal Das [1976] 103 ITR 437 (SC) has held as follows: ".......the reasons for the formation of the belief must have a rational connection with or relevant bearing on the formation of the belief. Rational connection postulates that there must be a direct nexus or live link between the material coming to the notice of the Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X
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