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TMI Blog2025 (1) TMI 1172X X X X Extracts X X X X X X X X Extracts X X X X ..... esh Gawade/ Mahendra Rawal or without confronting with the statement of Oath alleged to have been admitted by the employees and further without giving copy of any statement alleged to have been recorded 132(4) and u/s 131 of the Income Tax Act, 1961 as claimed to have been admitted by them. 3. The Learned CIT(A), NFAC, Delhi has erred in confirming the action taken by the Ld. AO by relying on admission by the employees of Kamala Group and ratification of the same by the directors/partners of the group without giving any opportunity to the appellant to cross examine each of such employees/directors/partners. 4. The Learned CIT(A), NFAC, Delhi has erred in confirming the action taken by the Ld. AO by failing to appreciate that the appellant has neither been interrogated by the investigation wing DGIT(INV), Mumbai nor does the learned Assessing Officer is in possession of any evidence whatsoever to even remotely conclude that the appellant has paid "on money" for purchase of property 5. The Learned CIT(A), NFAC, Delhi has erred in confirming the action taken by the Ld. AO as the Appellant is unable to understand as to what an amount of Rs. 129.150 signifies? It is evident that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .CIT(A), the assessee has preferred the present appeal before me on the grounds mentioned hereinabove. 5. All the grounds raised by the assessee are interconnected and interrelated and relates to challenging the order of Ld. CIT(A) in sustaining the additions made by the AO. Therefore, I have decided to dispose of all the grounds raised by the assessee through the present consolidated order. 6. Ld. AR appearing on behalf of the assessee, reiterated the same arguments as were raised by him before the revenue authorities. It was submitted that the price paid by the assessee for the purchase of the residential unit to the builder, is much above the market value prevalent and adopted by the stamp duty authorities. Hence, there was no occasion for the assessee to make any cash payment on account of 'on-money' to the builder, it was also submitted that merely relying upon the information received from the Investigation Wing Mumbai, AO made the additions without carrying out any independent enquiries or considering the submissions of the assessee. The assessee also relied upon his written submissions and same are reproduced here in below: The Appellant is an Individual and is regularl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laimed that the names of these "so called" flat purchasers have paid "on- money" as per details mentioned in the pen drive, no such details of all the flat purchasers who have purchased flat in "Vibgyor" CHS constructed by the Kamala Group has been furnished as claimed. 4. While it is claimed that the Learned DCIT, Central Circle -44, Mumbai is in possession of seized documents alongwith the seized pendrive, no such seized document or pendrive has been confronted to the Appellant. It is amply clear from the above that the Learned AO did not have any tangible material so as to form an opinion as regards "Reason to believe" that any income chargeable to tax has escaped assessment within the meaning of section 147 of the Act. While the Appellant has never been provided with a copy of reasons recorded, on the basis of the contents of the Assessment Order it appears that the Learned AO has incorporated the reasons recorded in his Assessment Order and the Appellant objects to the same as under The Learned Assessing Officer in Para 2 of her Assessment Order has mentioned the Reasons Recorded that prompted the reopening of the case of the Appellant. The Appellant strongly objects t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer is devoid of any merit since, it is far away from the facts and material arrived at such a conclusion. Resultantly, the notice u/s 148 of the Act is issued neither having a requisite belief nor having requisite jurisdiction as claimed. Accordingly, a bonafide 'belief towards escapement of income is clearly absent in the present case. The entire action of the Learned Assessing Officer is a complete non-starter and thus requires to be struck down. It is a well settled law that the proposition that re-assessment notice for mere verification or for conducting an enquiry is not permissible in law notwithstanding that the return of income was not subjected the scrutiny under section 143(3) of the Act and there are long lines of judicial precedents delivered both by the Jurisdictional High Court as well as other High Courts in this regards The action of the Learned Assessing Officer for invoking jurisdiction is not consistent with the mandate of law and therefore requires to be quashed. i. The Learned Assessing Officer has neither provided the "Pen-drive" "seized" during search and seizure action on Kamala Group nor statement on oath from Nilesh Gawde and Mahendr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n record before the Learned Assessing Officer for initiating reassessment There is not even a whisper of any tangible material, which has come to the notice of the Learned Assessing Officer which has led her to form a belief that income chargeable to tax has escaped assessment. The Learned AO has merely relied on the forwarded information received from the office of DGIT (Inv.) Mumbai. The Learned Assessing Officer has merely relied on the information received and was not in possession of the any necessary documents and evidences. There has been no independent application of mind on part of the Learned Assessing Officer. ii. There is no "reason to believe" Section 147 of the Act provides that if the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153 of the Act, assess or reassess such income. The Appellant submits that it is a well settled principle of law that the existence of a valid "reason to believe" is a sine qua non to the exercise of jurisdiction under section 147 of the Act. It has been held in a number of decisions by the Hon'ble Suprem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... full and true disclosure of all material facts does not absolve the Learned Assessing Officer from performing his duty to apply his mind and make intelligent inquiries. It is his duty to exercise due care and caution to make intelligent inquiries V. Impugned order marred with non-application of mind In order to initiate reassessment proceedings, there has to be a thorough application of mind followed by a reason to believe that income chargeable to tax has escaped assessment. However, a perusal of the impugned order would show that there has been no application of mind on the part of Learned Assessing Officer in disposing off the Appellant's objections and proposing to initiate the reassessment proceedings vi. No income which has escaped assessment In order to validly initiate reassessment proceedings, there has to be some income chargeable to tax, which has escaped assessment. View of the Learned CIT (A) At the very outset, it is submitted that Para 1 of the order states that a remand report had been called from the Learned Assessing Officer on 06/02/2023, 08/06/2023 and 20/06/2023 respectively. In this respect, the Appellant attended the remand proceedings from ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er all pertinent issues related to the case and provide substantial evidence and reasoning that warrant reconsideration. The issues raised in the amended grounds are crucial for arriving at the logical conclusion and ignoring these grounds compromises the fairness and integrity of the proceedings. It is well established that appellate authorities are required to consider all grounds raised in appeals. The omission to consider the amended grounds is contrary to established legal principles, as noted in various judgments of the ITAT and higher courts. The Ld. CIT (A) has grossly erred in treating the arguments of the Appellant as "WEAK" despite the fact that the Department has not produced a single corroborative evidence on record to prove their case. The Learned Assessing Officer has kept on repeating his justification that he has certain information based of a pen drive and statements given by one Mr. Nilesh Gawde and Mr. Mahendra Rawal. The Learned CIT(A) in para V2 on page 7 of the order himself summarizes that the findings of the Learned Assessing Officer is only on account of the following: - 1. Data found in the pen drive during search & seizure operation of Kamala Group ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 164 & 165/JP/2020 ITAT Jaipur held that addition solely on the basis of PEN drive found during the search proceedings, without checking the veracity/ reliability of the data recorded in the PEN drive, is unsustainable in law CONCLUSION In view of the same not only the entire re-assessment proceedings deserve to be quashed and thereby treated as null and void-ab-initio, but even on merits, the entire addition of Rs.32,28,750/-made u/s 69A is without any basis and hence deserves to be deleted. 7. On the other hand, Ld DR appearing on behalf of the department, relied upon the orders passed by the revenue authorities. 8. I have heard the arguments for both the parties and have also perused the material placed on record, judgements cited before me and the orders passed by the revenue authorities. From the records, I noticed that the assessment was reopened on account of the fact that AO received information that during search on Kamla Group, it was found that assessee along with three other members had purchased immovable property valued at Rs.2,39,15,000/- and cash of Rs.1,29,15,000/- was paid over and above the agreement value. And in this regard a pendrive with the detai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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