Shri Neeraj Bhardwaj, Bareilly V. Income Tax Officer, Ward-2(1), Bareilly

ITA 333/LKW/2020

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 9107 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 9 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-08-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 15-10-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: HARISH GIDWANI
• Keywords: Condonation of delay; Set aside
• Section: 147; 148; 139; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH “SMC”, LUCKNOW BEFORE SHRI T.S. KAPOOR, ACCOUNTANT MEMBER ITA No. 333/Lkw/2020 Assessment Year 2010-11 Income Tax Officer 2(1), Bareilly Vs. Shri Neeraj Bhardwaj, 503, Chandra Puri, Line Par, Prem Nagar, Bareilly PAN – AMWPB4538N (Respondent) (Appellant) Shri Kalrav Mehrotra, Advocate Appellant by Shri Harish Gidwani, DR Respondent by 03/08/2022 Date of hearing 08/08/2022 Date of pronouncement O R D E R This is an appeal filed by the assessee against the order of ld. CIT(A), Bareilly, dated 25.02.2020. 2. The ld. AR, at the outset invited my attention to a petition for condonation of delay and it was submitted that there is a delay of 152 days in filing the appeal which had happened due to complete lockdown in the month of March, 2020. It was submitted that the order of ld. CIT(A) was received on 18.03.2020 and therefore, the assessee was to file appeal before 18.05.2020 and which has been filed on 05.11.2020. It was submitted that due to lockdown during this period, the appeal could not be filed therefore it was prayed that the delay in filing the appeal may be condoned and appeal be heard on merits. 2 3. The ld. DR, did not raise any objection for condonation of delay in filing the appeal. 4. Finding the reasons for delay in filing the appeal plausible. I condoned the delay and ld. AR was asked to proceed with his arguments. 5. The ld. AR, at the outset submitted that assessee had filed concise grounds of appeal on 3.8.2022 and the first ground relates to the grievance of assessee that the reopening u/s. 148 is bad in law in view of the fact that the case of the assessee was reopened by recording reasons that assessee had deposited cash in bank account and further by holding that assessee had not filed return of income u/s. 139 of the Act. In this respect the ld. AR submitted a copy of acknowledgment of income tax return for the relevant assessment year filed on 10.06.2010. My attention was further invited to PB pgs. 3 to 6, where a copy of reasons for reopening of the case was placed. My specific attention was invited to column 6 where the Assessing Officer had noted that no return has been furnished by the assessee. The ld. AR submitted that since the reopening has been initiated on the basis of wrong finding of facts, therefore initiation of proceeding u/s. 147 is bad in itself and reliance in this respect was placed on an order of Hon'ble Allahabad High Court in the case of Shri Sunil Kumar Rastogi HUF vs. ITO, Writ Tax No. 658 of 2017 where vide order dated 02.12.2019 the Hon'ble Court has held in favour of the assessee under similar facts and circumstances. 6. The ld. DR, on the other hand, submitted that on the basis of AIR information, the case of the assessee was reopened and in the bank account there was no mention of PAN of the assessee and during a search in the PAN database, the name of the assessee did not appear therefore the Assessing Officer was left with no option but to issue notice u/s. 148 of the Act and in view of the above, it was submitted that the ground taken by the assessee be dismissed. 3 7. I have heard the rival parties and have gone through the material placed on record. From the reasons recorded placed at PB pgs.4 to 6, I find that as per AIR information available on record, the Assessing Officer observed that a cash of Rs.11,62,000/- has been deposited in the saving bank account of the assessee. The Assessing Officer wrote a letter to assessee to explain the source of such deposits. The assessee did not reply to the said notice. The Assessing Officer further notes that PAN database was searched in the system but could not find the particulars about assessee therefore he held that no question of assessment u/s. 143(3) arises as no return was visible on the system and therefore he held that there has been a failure on the part of assessee to make a return u/s. 139 of the Act and he initiated the reassessment proceedings. Paper book Pg.5 is a list of questions which needs to be filed by AO while initiating reopening of a case. Sl.No. 6 of the questions requires Assessing Officer to answer to a question as to whether provisions of Section 147(a) or 147(b) are applicable. Against reply to this question Section 147(a) has been mentioned and it has also been mentioned that no return has been furnished by the assessee. On the contrary, the fact remains that assessee did file return of income u/s. 139 of the Act on 10.06.2010, a copy of the acknowledgement is placed in the file. The date of filing of the return is much before than the date of recording of reasons. The Assessing Officer has noted that PAN was searched in the system and DCR of respective year has also been consulted and he had not found the copy of return filed by assessee. In view of the fact of having filed the return of income by the assessee the finding of the Assessing Officer that no return has been furnished by the assessee is wrong and therefore I hold that Assessing Officer has reopened the case by recording a wrong fact. The copy of acknowledgment of return for the relevant year has been made part of this order. Had the Assessing Officer noted the correct facts of filing the return, he would have verified the fact of escapement of income from the 4 return of income which he has not done therefore the notice issued u/s. 147 is not legally tenable. 8. The Hon'ble Allahabad High Court in the case of Shri Sunil Kumar Rastogi HUF (Supra) vide order dated 02.12.2019 has cancelled the notice issued u/s. 148 under similar facts and circumstances. The findings of Hon'ble Court are reproduced below: “The writ petitioner has approached this Court challenging a notice dated 30th March, 2017, issued under section 148 of the Income Tax Act, 1961, read with the order dated 05th September, 2017, issued by the Income Tax authorities in respect of reassessment of income of the writ petitioner for the assessment year 2010-2011. A plain reading of the notice dated 30th March, 2017, reveals that the same was issued after obtaining necessary satisfaction of the Principal Commissioner of Income Tax1, Kanpur, on the basis of approval dated 30th March, 2017. The reasons for issuance of notice has also been annexed to the writ petition wherefrom it appears that the case was reopened for assessment under section 147 of the Income Tax Act, 1961, in respect of assessment year 2010- 2011 since the assessee had not filed return of income for the assessment year 2010-2011. The records of the case, however, reveals that the assessee, in fact, had filed return of income for the assessment year 2010-2011. As such non - filing of return by the assessee could not possibly have been the reason for re - opening of assessment under section 147 of the Income Tax Act, 1961. If the assesse had not disclosed income or concealed income, the reason for re - opening of assessment ought to have reflected otherwise, in the notice dated 30th March, 2017. In that view of the matter – on a very short and narrow compass – we are of the view that the notice dated 30th March, 2017, issued under section 148 of the Income Tax Act read with order dated 05th September, 2017, issued by Income Tax Officer-3 (4), Kanpur, cannot be sustained in law and is liable to be set aside and is accordingly, set aside. Setting aside of the notice dated 30th March, 2017, read with the consequential order dated 05th September, 2017, however, shall not, in any manner, stand in the way of the Income Tax authorities to proceed further in the matter in accordance with law. The writ petition stands disposed of accordingly.” 5 9. In view of above and following the judicial precedents as relied on by the assessee I also quash the notice u/s. 147 and therefore hold the assessment order void ab initio and the consequent order of ld. CIT(A) is also held to be a void ab initio. In view of above, Ground No.1 of the appeal is allowed. 10. Nothing was argued other than Ground No.1 therefore rests of the grounds are dismissed as not pressed. 11. In the result, the appeal filed by the assessee is partly allowed. (Order pronounced in the open court on 08/08/2022) Sd/- (T.S. Kapoor) Accountant Member Aks – Dtd. 08/08/2022 Copy of order forwarded to: (1) The appellant (2) The respondent (3) Commissioner (4) CIT(A) (5) Departmental Representative (6) Guard File Assistant Registrar 6