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TMI Blog2024 (8) TMI 537X X X X Extracts X X X X X X X X Extracts X X X X ..... (1) TMI 11 - SUPREME COURT] as considered in 'Dr. Aiit Gupta' [ 2016 (4) TMI 167 - DELHI HIGH COURT] The reasons recorded are bad in law as the reopening has been made based on incorrect facts. It is a settled law that the reopening cannot be made based on wrong assumption of facts following AIR information and accordingly, the assessment made on the basis of wrong assumption of facts is liable to be quashed. Decided in favour of assessee. - DR. M. L. MEENA, ACCOUNTANT MEMBER AND SH. UDAYAN DASGUPTA, JUDICIAL MEMBER For the Appellant : Sh. Rohit Kapoor, CA V. S. Aggarwal, ITP For the Respondent : Sh. Radhey Shyam Jaiswal, Sr. D. R. ORDER Per Dr. M. L. Meena, AM: The captioned appeal has been filed by the assessee against the order dated 29.02.2024 passed by the National Faceless Appeal Centre (NFAC)/CIT(A), Delhi which is arising out of the Assessment Order dated 03.12.2018 passed u/s 144 r.w.s. 147 of the Income Tax Act, 1961 in respect of Assessment Year: 2011-12. 2. The appellant-assessee has raised the following grounds of appeal: 1. On the facts and circumstances of the case, the Ld. CIT(A) vide order u/s 250(6) dated 29.02.2024 has erred in confirming the addition t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. counsel for the assessee has requested for condonation of short delay of 17 days in filing the appeal against the order passed u/s 250 by NFAC, Delhi dated 29.02.2024 for that Ld. DR has no objection. Accordingly, the short delay in filing the appeal is condoned and the appeal is admitted. 4. Apropos ground no. 3 and 4, the assessee has challenged validity of assessment that the reasons recorded being based on incorrect facts and that there was no material on record to prove that the notice was served to the assessee or its agent. 5. Briefly facts are that appellant case was re-opened vide notice u/s 148 issued on 23.03.2018 based on AIR information that the appellant had deposited cash amounting to Rs. 17,00,000/- in saving bank account no 008200000128 maintained with Capital Local Area Bank with the approval of PCIT under section 151 of the Act. The AO passed the assessment order under section dated 03.12.2018, under section 144 r.w.s 147 of the Income Tax Act, 1961 ('the Act') with making an addition of Rs. 29,00,000/- on account of cash deposited in bank and Rs. 64644/- on account of saving interest. Thus, the total income was assessed at Rs. 29,64,640/-. 6. Aggrieve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to Rs. 1700000 in Capital area Local Bank account No 008200000128 and Rs. 1200000/- in Capital area Local Bank account No 001200000462 may not be treated as unexplained cash deposits u/s 69A. (Please refer internal page no 3 of order of A.O.) 6. Subsequently the AO proceeded with the assessment under section 144 on 03.12.2018. The copy of the assessment order is enclosed at page no 11-16 of the PB. That the assessment Was completed under section 144 r.w.s 147 of the Income Tax Act, 1961 ('the Act') vide order dated 03.12.2018 making an addition of Rs. 2900000/- on account of cash deposited in bank and Rs. 64644/- on account of saving interest. As such, the total income was assessed at Rs. 2964640/-. 7. The appellant filed additional evidence as per Rule 46A, stating that he was not provided with a reasonable opportunity to explain the source of the cash deposit due to the lack of service of notice, as the appellant was staying outside India. It was explained that the cash deposit in the bank account resulted from the sale proceeds from the sale of rural agricultural land as per a sale agreement executed on 09.11.2010. It is pertinent to mention that the land was originally ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch, the appellant filed an appeal before your Honor against the addition of Rs. 2900000/- sustained by the CIT(A). 10. Submissions in respect of ground No 4 Ground No. 4: That the order passed by the Ld. CIT(A) confirming the addition made by the AO is bad in law particularly in view of the fact that the reasons recorded are based upon incorrect facts. 10.1 That the AO had fallaciously made addition by relying upon incorrect information appearing in AIR that the appellant had deposited cash amounting to Rs. 2900000/- in the Capital Local Area bank Account No 008200000128 and 001200000462. It is a settled law that the reopening made merely on the basis of AIR information is bad in law and the assessment framed thereafter is required to be quashed. 10.2 That the reopening was made on the basis of AIR that the assessee has deposited cash of Rs 1700000 in saving bank account maintained with Capital Local Area, account no 008200000128. (Reasons recorded are enclosed at page no 3-4 of PB) 10.3 That at the outset, the AIR information being relied upon for the purpose of reopening the case of the appellant was incorrect in view of the fact that the appellant had deposited cash amounting t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in keeping with the decision of the Hon'ble Supreme Court in Kelvinator of India Ltd. (supra), as considered in 'Dr. Aiit Guota' (supra). Consequently, all proceedings pursuant thereto, culminating in the impugned order for the AY 2007-08, are also held to be null and void. In support, he relies on the Hon ble coordinate ITAT Amritsar Bench in the case of Lateef Ahmad Gujree, Rainawari, Jammu Kashmir v. Income Tax Officer, Ward-1, Srinagar in ITA No. 24/Asr/2024 order dated 04.06.2024. 8. Per contra, the Ld. DR relies on the impugned order. 9. We have heard both the sides, perused the record, impugned order and case law cited before us. Admittedly, the reasons recorded by the AO based on the AIR information and the AO had fallaciously made addition by relying upon incorrect information appearing in AIR that the appellant had deposited cash amounting to Rs. 2900000/- in the Capital Local Area bank Account No 008200000128 and 001200000462.It is seen that the AIR information being relied upon for the purpose of reopening of the case of the appellant was incorrect in view of the fact that the appellant had deposited cash amounting to Rs. 1400000/- instead of Rs. 1700000/- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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