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TMI Blog2024 (10) TMI 484X X X X Extracts X X X X X X X X Extracts X X X X ..... lacks whereas the AO states that there have been huge withdrawals of cash of which the assessee was the beneficiary. Therefore, this is the case where the AO has failed to carry out any enquiry before issuing notice u/s 148 of the Act and re-opened the assessment on borrowed satisfaction which is not permissible under the Act. Moreover, we note that the case was reopened for making the protective addition in the hands of assessee whereas the addition was made on substantive basis. The case of the assessee finds support from the decision of Meenakshi Overseas Pvt. Ltd. [ 2017 (5) TMI 1428 - DELHI HIGH COURT ] wherein held that the case has reopened without any independent application of mind and the reasons recorded failed to demonstrate the live link between the tangible material and the formation of the reasons to believe that income has escaped assessment, then there is no error of tribunal concluding that initiation of proceedings u/s 147/148 to reopen the assessments for the AY in question does not satisfy the requirement of law and accordingly, the question framed is answered in the negative in favour of the assessee and against the revenue. Similar ratio has been laid down i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ification report in respect of Smt. Meera Indra for FY 2011-12 relevant to AY 2012-13 Income Tax Officer (Intelligence Investigation), Durgapur, observed that the assessee Shri Utpal Das was beneficiary of the cash deposits of Rs. 70,50,000/- in the bank account of Smt. Mira Indra. The AO noted that Sri Utpal Das was the introducer while opening the bank account of the assessee and accordingly, notice u/s 148 was issued to the assessee after recording the reasons as mandated u/s 148(2) of the Act which are available at page 53 of PB. In the said reasons, the AO noted and referred to the letter dated 28.03.2017 received from Income Tax Officer (Intelligence Investigation), Durgapur dated 14.03.2017 regarding cash deposits of Rs. 70,50,000/- in the account of Smt. Mira Indra s saving bank account No. 0259104000045599 with IDBI Bank, M. B. Apartment, 35, G.T. Road, Burdwan-7131013 during the FY 2011-12 relevant to AY 2012-13. It was also noted by the AO the Investigation Wing found that Shri Utpal Das was the direct beneficiary of the cash deposited by Smt. Mira Indra and noted that the notice also issued u/s 148 to Smt Mira Indra. In para 3 the AO noted that the bank transactions do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eby leaving a bank balance of Rs. 63,15,836/- in the said bank account. The Ld. A.R submitted that the AO has failed to establish any live link between the information received and recording of reasons and formation of belief. The Ld. A.R stated that the AO has failed to carry out any mindful enquiry into the issue at the time of recording of reasons and simply noted that the assessee is a beneficiary of the said account and the said cash which is contrary to the facts on record. The Ld. A.R further argued that though Smt. Mira Indra has denied to have any role to deposit the said cash and also stated that it is not her money but the AO has not carried out any further investigation as to how the money deposited in the bank account of Smt. Mira Indra, belonged to the assessee when the assessee has categorically denied the money to be belonged to him. The Ld. A.R also argued that the AO in the reasons recorded has in the last para concluded that the assessment is being reopened as protective basis whereas as a matter of fact the assessment has been framed on substantive basis whereas in Smt. Mira Indra the assessment was framed on protective basis without giving any reasons. In defen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 14.03.2020 from Income Tax Officer (Intelligence Investigation), Durgapur on 20.03.2020 which stated that the cash deposited in savings bank account of Smt. Mira Indra during the impugned financial year 2011-12. In the second para the AO noted further that from the letter, it was found that Shri Utpal Das, was the direct beneficiary of the said cash deposited by Smt. Mira Indra and the notice was issued u/s 148 for AY 2012-13 to Mira Indra as well. Thereafter in para 3 the AO noted that the bank transactions did not reflect any business transactions and entire cash deposits of Rs. 70,50,000/- was the income of the assessee as Shri Utpal Das was the beneficiary of cash deposit. Thereafter the AO recorded that the assessee has filed return of income declaring total income of Rs. 2,50,250/- without offering Rs. 70,50,000/- to tax and in the final para the AO recorded his reasons to believe that income has escaped assessment and it is a fit case for reopening of assessment beside mentioning the fact that the proceedings against Smt. Mira Indra were already initiated and the instant case being reopened on protective basis. A perusal of the above reasons reveal that nowhere the AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the reasons recorded failed to demonstrate the live link between the tangible material and the formation of the reasons to believe that income has escaped assessment, then there is no error of tribunal concluding that initiation of proceedings u/s 147/148 of the Act to reopen the assessments for the AY in question does not satisfy the requirement of law and accordingly, the question framed is answered in the negative in favour of the assessee and against the revenue. Similar ratio has been laid down by the Hon ble Supreme Court in the case of ACIT vs. Nupower Renewables Pvt. Ltd. (supra) wherein the Hon ble Court has held that where the AO reopens the assessment based on the information supplied by the Investigation wing to investigate the source of genuineness and creditworthiness of the investor company which is just a fishing enquiry and not permissible in law. Therefore, the notice was set aside for the said reason. The operative part is reproduced as under: 14. However, whether the Assessing Officer had any such information at his command and the manner in which, the Assessing Officer processed such additional information(s) to form a belief that, income chargeable to tax has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Crores from First land. To reiterate, this information is nothing which the Assessing Officer did not have at his command when the Assessment was framed. The reasons do not specify that the information supplied to the Assessing Officer by the Investigation Wing, suggested that such investment was nongenuine. In this context, Assessing Officer refers to the requirement of verifying the genuineness of investor and requirement of further investigation. These observations in para 3 of the reasons, would not further the case of the Revenue, these being no information with the Assessing Officer, prima facie, indicating that the investments were not genuine. The investigation into the source of genuineness and creditworthiness of the investor company would fall within the relam of fishing enquiries, which is wholly impermissible in law in the context of the reopening of the assessment. For such reasons, impugned notice is set aside. Considering the facts of the case in the light of ratio laid down in the aforesaid decisions, we are inclined the quash the reassessment proceedings and also the consequent order passed by the AO for having failed to satisfy the condition for reopening of ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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