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TMI Blog2024 (10) TMI 541X X X X Extracts X X X X X X X X Extracts X X X X ..... tions which, clearly shows that all the details were submitted in response to such summons and therefore the respondent AO could not have assumed the jurisdiction on the basis of the information, without there being any fresh tangible material to show that the income has escaped the assessment. Thus, we are of the opinion that the impugned notice u/s 148 for reopening the assessment is not tenable in the eye of law. The petition succeeds and is accordingly allowed. - HONOURABLE MR. JUSTICE BHARGAV D. KARIA AND HONOURABLE MRS. JUSTICE MAUNA M. BHATT Appearance: For the Petitioner(s) No. 1 : Ms Vaibhavi K Parikh (3238). For the Respondent(s) No. 1 : Karan G Sanghani (7945). For the Respondent(s) No. 2: Notice Served. ORAL JUDGMENT (PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA) 1. Heard learned Senior Advocate Mr. Tushar Hemani for learned advocate Ms. Vaibhavi K. Parikh for the petitioner and learned Senior Standing Counsel Mr. Karan G. Sanghani for the respondent. 2. Rule returnable forthwith. Learned Senior Standing Counsel Mr. Karan G. Sanghani waives service of notice of rule for the respondent. 3. Having regard to the controversy which is in narrow compass, with the consent o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear Under consideration. 4. Enquiries made by the AO as sequel to information collected/received Necessary verification was made from the entire details available on records and database of ITBA and Insight portal thereby, I have sufficient form of 'Reason to believe' to frame my opinion. The information available with this office has been analyzed and I have framed my opinion after due application of all the facts and mind. 5. Finding of the AO During the year under consideration, assessee had undertaken following financial transactions: Sr.No. Type of transactions Amount 1 The source of the cash deposit made in the bank account(s) of the assessee could not be verified and remained unexplained. 4,30,28,500 Total income escaping assessment Rs.4,30,28,500/- Thus, on perusal of the details available on record, it is noticed that during the previous year relevant to the assessment year under consideration, the assessee has undertaken financial transactions much beyond the taxable limit. However, the source of entering such huge transactions is not conclusively proved from the details and data collected during the course of Inquiry. I have verified all the details available on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ank during the year. under consideration. Return filed by the assessee was processed u/s 143 (3) of the Income Tax Act, 1961 and no additions were made to the income returned by the assessee. It is clear from a simple analysis from financial profile and returned income of the assessee that amount of cash deposited is much higher in comparison to income offered to tax during current year or in previous years. These facts along with return profile of the assessed makes it a clearly suspicious case and there is not only a firm reason to believe but also a live link between the information in possession of the department to income escaping assessment. 5.13. Being aggrieved by the aforesaid impugned notice as well as the order rejecting the objections filed by the petitioner, the present petition is filed. 6. Learned Senior Advocate Mr. Tushar Hemani for the petitioner submitted that the respondent authorities ought to have taken into consideration the objections filed by the petitioner wherein all the details with regard to the cash deposited in the bank account for sale of the petrol are disclosed in the books of accounts of the partnership firm. It was further submitted that the peti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... va Promoters Finlease (P) Ltd (ITA No. 342 of 2011) dated 15.02.2012 , in which the Court held that We are aware of the legal position that at the stage of issuing the notice u/s 148, the merits of the matter are not relevant and the Assessing Officer at that stage is required to form only a prima facie belief or opinion that income chargeable to tax has escaped assessment . 9. With respect to contentions raised in Submission 3.3, it is submitted that it is pertinent to mention at this juncture that the assessment initiated be issuing notice u/s 148 has not been finalized yet. Besides, the AO had issued notice u/s 148 of the Act based on the information in his possession which is reported by the reporting authority on the PAN of the Individual and not on the PAN of the Firm. There could be many possible reasons for this to happen. Besides, the assessee could explain his stand by way of furnishing relevant submission during the assessment proceedings and rest assured that the assessment shall be completed after considering the same with due care. As discussed above, the process of assessment. proceedings in the case of the petitioner was within the four corners of law and was abidin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same can only be proved by the assessee by furnishing relevant information. Without any further details about cash flow etc. and in view of other materials available on record it can be believed that assessee has under reported his income chargeable to tax during the year under consideration. Any earlier proceedings for the A.Y. under consideration does not have any impact on the present assessment proceedings. Moreover, as held by the Hon'ble Apex court in Kale Khan Mohammad Hanif v. CIT 1963 50 ITR1 SC , it-was held that the onus of proving the source of a sum of money found to have been received by the assessee is on him. If he disputes liability for tax, it is for him to show either that the receipt was not income or that if it was, it was exempt from taxation under the provisions of the Act. In the absence of such proof, the Income-tax Officer is entitled to treat it as taxable income. 11. With respect to contentions raised in Submission 3.5, it is submitted that there is concrete information in possession of department on the basis of which the AO has formed reasons to believe that income has escaped assessment and merits of the reasons itself cannot be questioned at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er is within the realm of subjective satisfaction (ITO v. Selected Dalurband Coal Co. Pvt. Ltd. [1996 (217) ITR 597 (SC)); Raymond Woollen Mills Ltd. v. ITO [1999 (236) ITR 34 (SC)]). 13. With respect to contentions raised in Submission 3.7, it is submitted that the contention of the petitioner here is based on the fact that an assessment u/s 143 (3) has been completed earlier in his case earlier without taking any adverse inference on the returned income for the year under consideration. Here, it should be kept in mind that subsequent to completion of that assessment, the AO had fresh information in the form of High Risk Transaction from CRIU / VRU and that the same was not in sync with the details already reported by the Assessee. Hence, the question of change of opinion does not arise. 14. With respect to contentions raised in Submission 3.8, it is submitted that it is clear from a simple analysis from financial profile and returned income of the assessee that amount of cash deposited is much higher in comparison to income offered to tax during current year or in previous years. It may be correct that entire deposits. made may not constitute income escaping assessment but the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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