Premalatha Chhajed, CHENNAI V. ITO NCW 5(4), CHENNAI

ITA 2233/CHNY/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 5732 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2011-2012
• Appeal Filed On: 13-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B SAGADEVAN JCIT D R
• Assessee Lawyers: P C JAIN
• Keywords: Reopening of assessment; Reason to believe; Borrowed satisfaction
• Section: 147

Judgement Text

, D/ SMC , IN THE INCOME TAX APPELLATE TRIBUNAL D/SMC BENCH, CHENNAI . , BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER I.T.A.NO.2233 /MDS./2017 ( ASSESSMENT YEAR : 2011-12 ) SMT.PREMLATA CHHAJED , 48/2,JAIN COLONY, HUNTERS ROAD,VEPERY, CHENNAI 600 007. VS. THE INCOME TAX OFFICER, NCW-5(4),CHENNAI. PAN AADPC 7080 R ( / APPELLANT ) ( / RESPONDENT ) / APPELLANT BY : MR.P.C.JAIN, ADVOCATE / RESPONDENT BY : MR.B.SAGADEVAN, JCIT, D.R ! ' / DATE OF HEARING : 04.12.2017 #$%& ! ' /DATE OF PRONOUNCEMENT : 05.12.2017 / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER: THIS APPEAL IS FILED BY THE ASSESSEE, AGGRIEVED BY THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(A)-5, CHENNA I DATED 21.06.2017 PERTAINING TO ASSESSMENT YEAR 2011-12. ITA NO. 2233/MDS/2017 2 2. THE MAIN GRIEVANCE OF THE ASSESSEE IN HER APPEA L IS WITH REGARD TO CONFIRMING THE REOPENING OF ASSESSMENT PA SSED U/S.143(3) R.W.S147 OF THE ACT BY LD.CIT(A) . 3. THE FACTS OF THE CASE ARE THAT ASSESSEE WHILE F ILING THE RETURN OF INCOME FOR ASSESSMENT YEAR 2011-12 ON 22.07.2011 AD MITTED TOTAL INCOME OF ` 2,11,880/-. THE CASE WAS REOPENED U/S.147 OF THE A CT AND ISSUING OF NOTICE U/S.148 OF THE ACT ON 09.03.2 015 BY RECORDING THE REASONS IN ASSESSMENT ORDER AS FOLLOWS:- BASED ON THE INFORMATION RECEIVED FROM DDIT (INV.) UNIT IV(2), CHENNAI- 34 VIDE LETTER IN NO. DDIT/UNIT-IV(2)/STR/2013-14 DT.10.03.2014. IT IS SEEN THAT THE ASSESSEE HAS MADE HUGE VALUE OF CASH DEPOS ITS IN BANK AND MADE HUGE DEBITS AND CREDITS DURING THE F.Y 2010-11 AMOUNTING TO ` 12,81,000/-. THIS NEEDS TO BE VERIFIED. HENCE, I (A.O.) HAVE REASON TO BELIEVE THAT THECA SE HAS TO BE REOPENED TO ASSESS THE HUGE DEPOSITS AND TO BRING T HE INCOME ESCAPED FROM ASSESSMENT TO TAX AS PER EXPLANATION 2(A) TO S EC.147 OF THE INCOME TAX ACT, 1961. ITA NO. 2233/MDS/2017 3 CONSEQUENTLY, THE ASSESSMENT WAS COMPLETED BY CONSI DERING ` 41,000/- DEPOSITED IN BANK ACCOUNT AS UNEXPLAINED CASH DEPOSIT AND ALSO OPENING BALANCE AVAILABLE AS ON 01.04.2011 AT ` 83,000/- TOTALING OF ` 1,24,000/- ADDED TO THE INCOME OF ASSESSEE. AGGRIE VED THE ORDER OF LD. ASSESSING OFFICER, THE ASSESSEE CH ALLENGED BEFORE LD.CIT(A) THAT THERE IS NO SUFFICIENT REASONS TO RE OPEN THE ASSESSMENT , THE AO REOPENED THE ASSESSMENT BASED ON THE BORROWED SATISFACTION. THE ASSESSEE ALSO CHALLENGED THE ADDITIONS MADE BY THE LD. ASSESSING OFFICER. ON APPEAL, THE LD.CIT(A) CONFIRMED THE REOPENING OF ASSESSMENT AS WELL AS A DDITION MADE BY THE AO. AGAINST THE ORDER OF LD.CIT(A), NOW THE ASSESSEE IS IN APPEAL BEFORE US. 4. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL ON RECORD. REGARDING THE REOPENING OF ASSESSMENT, WHI CH WAS RE-OPENED ON THE BASIS OF REPORT RECEIVED FROM DDIT (INV.) UNIT IV(2), CHENNAI-34 STATING THAT THE ASSESSEE HAS MADE HUGE VALUE OF CASH DEPOSITS IN BANK AND MADE HUGE DEBITS AND CREDITS D URING THE F.Y 2010-11 AMOUNTING TO ` 12,81,000/- AND THE LD. ASSESSING OFFICER ITA NO. 2233/MDS/2017 4 WANTED TO VERIFY IT. AS SEEN FROM THE RECORDS, IT C ANNOT BE SAID THAT THE AO HAS INDEPENDENTLY APPLIED HIS MIND SO AS TO ARRIVE THE SATISFACTION REGARDING ESCAPEMENT OF INCOME. ON THE OTHER HAND, THE REASONS RECORDED SUGGEST THAT THE SATISFACTION WAS NOT THAT OF LD. ASSESSING OFFICER BUT OF SOME OTHER AUTHORITY I.E. BASED ON THE INFORMATION RECEIVED FROM DDIT (INV.) UNIT IV(2), C HENNAI-34 VIDE LETTER NO. DDIT/UNIT-IV(2)/STR/2013-14 DT.10.03.2014. ON THAT BASIS, THE LD. ASSESSING OFFICER JUST MENTIONED THAT HE HAS REASO N TO BELIEVE THAT THE CASE HAS TO BE REOPENED TO ASSESS THE HUGE CASH DEPOSIT AND BRING THE ESCAPED INCOME TO TAX. IN MY OPINION, THE EXPRESSION REASON TO BELIEVE IN SECTION 147 WOULD MEAN CAUS E OR JUSTIFICATION. IF THE ASSESSING OFFICER HAS CAUSE OR JUSTIFICATION TO KNOW OR SUPPOSE THAT INCOME HAD ESCAPED ASSESSMENT, HE CAN BE SAID TO HAVE REASON TO BELIEVE THAT INCOME HAD ESCAPED ASSESSMENT. THE EXPRESSION CANNOT BE READ TO MEAN THAT THE ASSESSING OFFICER S HOULD HAVE FINALLY ASCERTAINED THE FACT BY LEGAL EVIDENCE OR CONCLUSIO N. WHAT IS REQUIRED IS REASON TO BELIEVE BUT NOT THE ESTABLISHED FACT OF ESCAPEMENT OF INCOME. AT THE STAGE OF ISSUE OF NOTICE, THE ONLY Q UESTION IS WHETHER THERE WAS RELEVANT MATERIAL ON WHICH A REASONABLE P ERSON COULD HAVE ITA NO. 2233/MDS/2017 5 FORMED THE REQUISITE BELIEF. WHETHER MATERIAL WOULD CONCLUSIVELY PROVE ESCAPEMENT OF INCOME IS NOT THE CONCERN AT TH AT STAGE. THIS IS SO BECAUSE THE FORMATION OF THE BELIEF IS WITHIN TH E REALM OF THE SUBJECTIVE SATISFACTION OF THE ASSESSING OFFICER. 5. IN THE PRESENT CASE, IT IS NOWHERE THE CASE OF THE AO THAT HE IS HAVING CAUSE OR JUSTIFICATION TO KNOW OR SUPPOSE TH AT INCOME HAD ESCAPED FROM ASSESSMENT. ONCE THIS IS SO, IT HAS T O BE SAID THAT THE LD. ASSESSING OFFICER HAD NO REASON TO BELIEVE THAT INCOME HAD ESCAPED ASSESSMENT , HE SHOULD INDEPENDENTLY FORM A N OPINION THAT INCOME ESCAPED FROM THE ASSESSMENT BY NOT DISCLOSI NG THE DEPOSITS TO BANK ACCOUNT IN THE RETURN OF INCOME. THE AO WIT HOUT FORMING OPINION THAT DEPOSITS INTO BANK ACCOUNT HAS NOT BEE N SHOWN TO DEPARTMENT, HE FORMED THE OPINION THAT INCOME HAS E SCAPED FROM ASSESSMENT, WHICH IS NOT PROPER. ACCORDINGLY, I QUA SH THE RE- ASSESSMENT ORDER ITSELF. ITA NO. 2233/MDS/2017 6 6. SINCE, I HAVE QUASHED THE RE-ASSESSMENT ORDER ITSELF, I REFRAIN FROM GOING INTO OTHER GROUNDS OF APPEAL RAISED BY T HE ASSESSEE. 7. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOW ED. ORDER PRONOUNCED ON 05 TH DECEMBER, 2017. SD/- ( ) ( CHANDRA POOJARI ) /ACCOUNTANT MEMBER CHENNAI, DATED THE 05 TH DECEMBER, 2017 . K S SUNDARAM. ' ( )!*+ ,+%! / COPY TO: 1 . / APPELLANT 3. ' ' -! () / CIT(A) 5. +0 1 )!)23 / DR 2. / RESPONDENT 4. ' ' -! / CIT 6. 1 45 6 / GF