Munni Devi, Rewari V. ITO, Rewari

ITA 3534/DEL/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 7136 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 3 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-09-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 2
• Next Hearing Date: 07-09-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 11-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMRIT LAL
• Assessee Lawyers: PIYUSH KR KAMAL
• Keywords: Reopening of assessment; Gift; Competent authority; Reason to believe; Reassessment proceedings
• Section: 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH SMC-II : NEW DELHI) BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO. 3534/DEL/2014 ASSESSMENT YEAR: 2007-08 MUNNI DEVI VS. ITO, WARD-2 W/O SH. MOHAR SINGH, REWARI VILL. & PO ASIA-KI-GORAWAS, REWARI (PAN: BIVPD3594G) (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. GAUTAM JAIN, ADV. & SH. PIYUSH KR. KAMAL, ADV. REVENUE BY : SHRI AMRIT LAL, SR. DR DATE OF HEARING : 08-09-2016 DATE OF ORDER : 15-09-2016 ORDER THE ASSESSEE HAS FILED THE APPEAL AGAINST THE ORDE R DATED 8.5.2014 OF THE LD. CIT(A)-ROHTAK PERTAINING TO ASSESSMENT YEAR 200 7-08 AND RAISED THE FOLLOWING GROUNDS:- 1. THAT THE ORDER PASSED BY THE LEARNED CIT (APPEAL S) ROHTAK IS CONTRARY TO THE FACTS, WRITTEN SUBMISSIONS AND PROVISIONS OF LA W. 2. THAT THE LEARNED CIT (A) ROHTAK HAS GROSSLY ERRE D IN NOT CONSIDERING THE LEARNED TEHSILDAR CERTIFICATES WHERE THE AMOUNT OF RS. 4942000/- THE SALES PRICE OF AGRICULTURAL LAND IS DULY MENTIONED WITH THE RAT E OF PER ACRE. ITA NO.3534/DEL/2014 2 3. THAT THE LEARNED CIT(A) ROHTAK HAS ALSO ERRED IN NOT CONSIDERING THE DULY SWORNED AFFIDAVIT OF SH. MOHAR SINGH THE HUSBA ND OF APPELLANT WHO HAD DEPOSITED A SUM OF RS. 4942000/- IN THE APPELLANT'S BANK ACCOUNT WITH ITS SOURCES AGAINST WHICH THE PROCEEDINGS WERE INITIATE D. 4. THAT SUSTAIN IT IN THE ADDITIONS OF RS. 3301000/ - MADE BY AO BY THE APPELLATE AUTHORITY IS QUITE ARBITRARY, EXCESSIVE & UNJUSTIFI ED. 5. THAT THE NON-CONSIDERATION THE REQUEST OF APPELL ANT BEFORE AO TO CALL THE CONCERNED PERSONS FOR EXAMINATION AND TO CONFIRM OR IGINAL COPY OF THE AGREEMENT TO SELL & AMOUNT RECEIVED AS PER AGREEMEN T AT RS. 4942000/- IS AGAINST THE LAW & JUSTICE OF THE CASE. 6. THAT TO SUSTAIN THE ADDITION OF RS. 50240/- AS AGRICULTURAL INCOME BY THE LEARNED CIT(A) ROHTAK IS AGAINST LAW, FACTS & DOCUM ENTS ON RECORD. 7. THAT THE APPELLANT CRAVES THE LEAVE TO ADD, MODI FY, AMEND OR DELETE ANY OF THE GROUNDS OF APPEAL BEFORE & ALSO AT THE TIME OF HEARING. 2. ASSESSEE HAS ALSO FILED AN APPLICATION FOR ADMIS SION OF ADDITIONAL GROUND OF APPEAL VIDE ITS APPLICATION DATED 29.8.2016 IN W HICH THE ASSESSEE HAS STATED THAT IN VIEW OF THE SETTLED DECISIONS IN THE CASE O F NTPC 229 ITR 383 (SC), (LEGAL GROUND CAN BE RAISED FOR FIRST TIME IN COLLA TERAL AND SECOND ROUND ALSO). THE LEGAL GROUND CAN BE VERY WELL RAISED FOR FIRST BEFORE THE ITAT WHICH GOES TO THE ROOT OF THE MATTER AND PERTAINS TO THE ASSUMPTI ON OF JURISDICTION. FOR THE SAKE OF CONVENIENCE, THE LEGAL ADDITIONAL GROUND RAISED BY THE ASSESEEE ARE REPRODUCED AS UNDER:- ITA NO.3534/DEL/2014 3 1. THAT THE LEARNED INCOME TAX OFFICER HAS ERRED B OTH IN LAW AND ON FACTS IN INITIATING PROCEEDINGS U/S. 147 OF THE ACT AND, FURTHER COMPLETING ASSESSMENT UNDER SECTION 143(3)/147 OF THE ACT WITH OUT SATISFYING THE STATUTORY PRE-CONDITIONS FOR INITIATION OF THE PROC EEDINGS PROVIDED UNDER THE ACT AND, AS SUCH ARE VOID AB INITIO AND WITHOUT JURISDICTION. 3. LD. COUNSEL OF THE ASSESSEE REQUESTED THAT KEEPI NG IN VIEW OF THE DECISION OF THE HONBLE SUPREME COURT OF INDIA IN T HE CASE OF NTPC 229 ITR 383 (SC) (SUPRA), THE ADDITIONAL GROUND RAISED BY THE ASSESSEE MAY BE ADMITTED AND DECIDED FIRST. 4. ON THE CONTRARY, LD. DR STRONGLY OPPOSED THE ADM ISSION OF ADDITIONAL GROUND (LEGAL) RAISED BY THE ASSESSEE. 5. AFTER HEARING BOTH THE PARTIES AS WELL AS PERUSI NG THE ADDITIONAL GROUND ALONGWITH THE ORDERS PASSED BY THE REVENUE AUTHORIT IES, I AM OF THE CONSIDERED VIEW THAT IN VIEW OF THE DECISION OF THE HONBLE SU PREME COURT OF INDIA IN THE CASE OF NTPC LIMITED 229 ITR 383 (SUPRA), THE ADD ITIONAL GROUND RAISED BY THE ASSESSEE VIDE ITS APPLICATION DATED 29.8.2016 ARE PURELY LEGAL GROUND AND DID NOT REQUIRE FRESH FACTS WHICH IS TO BE INVEST IGATED AND GOES TO THE ROOT OF THE MATTER. IN THE INTEREST OF JUSTICE, I ADMIT THE A FORESAID ADDITIONAL GROUND RAISED BY THE ASSESSEE, IN VIEW OF THE CASE LAW OF NTPC L IMITED (SUPRA) AND PROCEED TO DECIDE THE ADDITIONAL GROUND FIRST. 6. THE BRIEF FACTS OF THE CASE ARE THAT IN THIS CA SE ON THE BASIS OF AIR INFORMATION AVAILABLE, THE ASSESSEE HAD DEPOSITED C ASH OF RS. 49,42,000/- ON 10.8.2006 IN HER SAVING BANK ACCOUNT NO. 7666 WITH CANARA ITA NO.3534/DEL/2014 4 BANK, PALHAWAS, REWARI DURING THE FINANCIAL YEAR 20 06-07 RELEVANT TO THE YEAR UNDER PROCEEDING. NOTICE U/S. 148 OF THE I.T. ACT , 1961 WAS ISSUED ON 16.3.2012 AFTER RECORDING THE REASONS. ASSESEE FILE D HER RETURN OF INCOME OF RS. 50,240/-. NOTICES U/S. 143(2)/143(1) WERE ISSUED O N 12.10.2012 AND THE REASONS RECORDED WERE DULY SUPPLIED TO THE ASSESSEE. IN CO MPLIANCE OF NOTICES, ASSESSEES REPRESENTATIVE ATTENDED THE ASSESSMENT P ROCEEDINGS AND FURNISHED THE INFORMATION AND DETAILS AND WRITTEN REPLY. AFT ER PERUSING THE SAME THE AO ADDED THE ADDITIONS AND ASSESSED THE INCOME OF THE ASSESSEE AT RS. 33,82,160/- BY COMPLETING THE ASSESSMENT U/S. 143(3)/148 OF THE I.T. ACT, 1961 VIDE HIS ORDER DATED 6.3.2013. 7. AGAINST THE ORDER OF THE AO, ASSESSEE APPEALED BEFORE THE LD. CIT(A), WHO VIDE IMPUGNED ORDER DATED 08.5.2014 HAS DISMISS ED THE APPEAL OF THE ASSESSEE. 8. AGGRIEVED WITH THE AFORESAID ORDER OF THE LD . CIT(A), ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL FOR CHALLENGING THE LEGA L ISSUE RAISED VIDE ADDITIONAL AS WELL AS THE ADDITION IN DISPUTE, AS AFORESAID. 9. AT THE TIME OF HEARING, LD. COUNSEL OF THE ASSES SEE HAS ONLY ARGUED THE LEGAL GROUND AND STATED THAT THERE IS NO NEXUS BETW EEN THE PRIMA FACIE INFERENCE ARRIVED IN THE REASONS RECORDED AND INFORMATION AVA ILABLE WITH THE OFFICE OF THE AO. HE FURTHER STATED THAT THE INFORMATION WAS RES TRICTED TO CASH DEPOSITS IN BANK ACCOUNT BUT THERE WAS NO MATERIAL MUCH LESS TA NGIBLE, CREDIBLE, COGENT AND RELEVANT MATERIAL TO FORM A REASON TO BELIEVE THAT CASH DEPOSITS REPRESENTED INCOME OF THE ASSESSEE. HE FURTHER STATED THAT EVE N THE COMMUNICATION DATED ITA NO.3534/DEL/2014 5 24.1.2012 COULD NOT BE MADE A BASIS TO ASSUME JURIS DICTION IN VIEW OF THE FACT THAT SUCH AN ENQUIRY LETTER IS AN ILLEGAL ENQUIRY L ETTER AND THUS CANNOT BE RELIED UPON. IT WAS THE FURTHER CONTENTION OF THE LD. CO UNSEL OF THE ASSESSEE THAT THE PROCEEDINGS INITIATED ARE BASED ON SURMISES, CONJEC TURES AND SUSPICION AND THEREFORE, THE SAME ARE WITHOUT JURISDICTION. HE F URTHER STATED THAT THE REASONS RECORDED ARE HIGHLY VAGUE, FAR-FETCHED AND CANNOT B Y ANY STRETCH OF IMAGINATION LEAD TO CONCLUSION OF ESCAPEMENT OF INCOME AND THER E ARE MERELY PRESUMPTION IN NATURE. HE STATED THAT IT IS A CASE OF MECHANICA L ACTION ON THE PART OF THE AO AS THERE IS NON-APPLICATION OF MIND MUCH LESS INDEPEND ENT APPLICATION OF MIND SO AS TO SHOW THAT HE FORMED AN OPINION BASED ON ANY M ATERIAL THAT SUCH DEPOSITS REPRESENTED INCOME. TO SUPPORT HIS AFORESAID CO NTENTION, HE RELIED UPON THE FOLLOWING CASE LAWS AND ATTACHED THE COPIES OF THE SAID DECISIONS WITH HIS PAPER BOOK. - BIR BAHADUR SINGH SIJAWALI REPORTED IN 68 STO 1 97 (DEL) - SH. AMRIK SINGH VS. ITO REPORTED IN 159 ITD 329 (ASR) - APEX COURT DECISION IN THE CASE OF PARIMISETTI SEHTHARAMAMMA VS. CIT REPORTED IN 57 ITR 532. - PRAVEEN KUMAR JAIN VS. ITO IN ITA NO. 1331/D/2015 FOR THE AY 2006-07 DATED 22.1.2015. - SARAF GRAMODYOG SANSTHAN VS. ITO REPORTED IN 108 ITD 115 (AGRA). ITA NO.3534/DEL/2014 6 IN VIEW OF THE ABOVE, HE REQUESTED THAT BY FOLLOWI NG THE AFORESAID PRECEDENTS THE REASSESSMENT PROCEEDINGS OF THE AO MAY BE QUASHED BY ACCEPTING THE APPEAL FILED BY THE ASSESSEE. 10. ON THE CONTRARY, LD. DR RELIED UPON THE ORDER P ASSED BY THE AUTHORITIES BELOW AND STATED THAT THE AO HAS PROPERLY RECORDED THE REASONS FOR REOPENING BY DUE APPLICATION OF MIND, HENCE, THE APPEAL OF THE A SSESSEE MAY BE DISMISSED. 11. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RELEVANT RECORDS AVAILABLE WITH US, ESPECIALLY THE ORDERS OF THE REVENUE AUTHO RITIES AND THE CASE LAWS CITED BY THE ASSESSEES COUNSEL ON THE ISSUE IN DISPUTE. IN OUR VIEW, IT IS VERY MUCH NECESSARY TO REPRODUCE THE REASONS RECORDED BY THE AO BEFORE ISSUE OF NOTICE U/S. 148 FOR REOPENING OF ASSESSMENT WHICH READS AS UNDER:- AS PER AIR INFORMATION FOR FY 2006-07 RECEIVED IN THIS OFFICE, THE ASSESSEE HAS MADE CASH DEPOSITS OF RS. 49,42,000/- IN BANK ACCOUNT WITH CANARA BANK, PULHA WAS, REWARI. A QUERY NOTICE WAS ISSUED TO THE ASSESSEE O N 24.1.2012. BUT NO RESPONSE HAS BEEN RECEIVED FROM THE ASSESSEE. I, THEREFORE HAVE REASON TO BELIEVE THAT THE ASSESS E HAS DEPOSITED CASH IN HIS BANK ACCOUNT OUT OF HIS INCOM E FROM UNEXPLAINED SOURCES. ACCORDINGLY, INCOME TO THE E XTENT OF RS. 49,42,000/- AND ANY OTHER INCOME WHICH SUBSEQUE NTLY ITA NO.3534/DEL/2014 7 COMES TO THE NOTICE OF THE UNDERSIGNED HAS ESCAPED ASSESSMENT WITHIN THE MEANING OF SECTION 147 OF THE I.T. ACT, 1961. ISSUE NOTICE U/S. 148 OF THE I.T. ACT, 1 961 FOR THE ASSESSMENT YEAR 2007-08. SD/- (O.P. POONIA) INCOME TAX OFFICER, WARD-2, REWARI 12. AFTER GOING THROUGH THE REASONS RECORDED BY THE ITO, WARD-2, REWARI, I AM OF THE VIEW THAT THERE IS NO NEXUS BETWEEN THE P RIMA FACIE INFERENCE ARRIVED IN THE REASONS RECORDED AND INFORMATION; THE INFOR MATION WAS RESTRICTED TO CASH DEPOSITS IN BANK ACCOUNT BUT THERE WAS NO MATERIAL MUCH LESS TANGIBLE, CREDIBLE, COGENT AND RELEVANT MATERIAL TO FORM A REASON TO BE LIEVE THAT CASH DEPOSITS REPRESENTED INCOME OF THE ASSESSEE; THAT EVEN THE C OMMUNICATION DATED 24.1.2012 COULD NOT BE MADE A BASIS TO ASSUME JURIS DICTION IN VIEW OF THE FACT THAT SUCH AN ENQUIRY LETTER IS AN ILLEGAL ENQUIRY L ETTER AND THUS CANNOT BE RELIED UPON; THAT THE PROCEEDINGS INITIATED ARE BASED ON SURMISES, CONJECTURES AND SUSPICION AND THEREFORE, THE SAME ARE WITHOUT JURIS DICTION; THAT THE REASONS RECORDED ARE HIGHLY VAGUE, FAR-FETCHED AND CANNOT B Y ANY STRETCH OF IMAGINATION LEAD TO CONCLUSION OF ESCAPEMENT OF INCOME AND THER E ARE MERELY PRESUMPTION IN NATURE; THAT IT IS A CASE OF MECHANICAL ACTION ON THE PART OF THE AO AS THERE IS NON-APPLICATION OF MIND MUCH LESS INDEPENDENT APPL ICATION OF MIND SO AS TO SHOW THAT HE FORMED AN OPINION BASED ON ANY MATERIA L THAT SUCH DEPOSITS ITA NO.3534/DEL/2014 8 REPRESENTED INCOME. KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE AND THE CASE LAW APPLICABLE IN THE C ASE OF THE ASSESSEE, I AM OF THE CONSIDERED VIEW THAT THE REOPENING IN THE CASE OF T HE ASSESSEE FOR THE ASSTT. YEAR IN DISPUTE IS BAD IN LAW AND DESERVES TO BE QUASHED . MY VIEW IS SUPPORTED BY THE FOLLOWING JUDGMENTS/DECISIONS:- A. BIR BAHADUR SINGH SIJAWALI REPORTED IN 68 SOT 19 7 (DEL) WH3RIEN IT HAS BEEN HELD AS UNDER:- 'SECTION 68, READ WITH SECTIONS 147 AND 148, OF THE LNCOME-TAX ACT, 1961 - CASH CREDITS (BANK DEPOSIT) - ASSESSMEN T YEAR 2008- 09 - ASSESSEE DEPOSITED CERTAIN SUM IN HIS SAVING B ANK ACCOUNT BUT NO RETURN OF INCOME WAS FILED BY HIM - ASSESSING OF FICER ISSUED NOTICE UNDER SECTION 148 ON GROUND THAT THERE WAS A N ESCAPEMENT OF INCOME - WHETHER WHERE ASSESSING OFFICER PROCEED ED ON FALLACIOUS ASSUMPTION THAT BANK DEPOSITS CONSTITUTE D UNDISCLOSED INCOME AND OVERLOOKED FACT THAT SOURCE OF DEPOSIT N EED NOT NECESSARILY BE INCOME OF ASSESSEE, REASSESSMENT PRO CEEDINGS 'WAS TO BE SET ASIDE - HELD. YES [PARAS 8 & 10. [IN FAV OUR OF ASSESSEE] B. AMRIK SINGH VS ITO REPORTED IN 159 ITD 329 (ASR) WHEREIN IT HAS BEEN HELD AS UNDER AND THE DECISION OF BIR BAHA DUR SINGH SIJAWALI (SUPRA) HAS BEEN FOLLOWED IN THIS CASE. ITA NO.3534/DEL/2014 9 '44. IT IS THIS QUESTION WHICH TAKES US BACK TO THE APPLICABILITY/NON- APPLICABILITY OF THE DECISION IN BIR BAHADUR SINGH SIJWALI (SUPRA). THE RATIO THEREOF HAS NOT AT ALL BEEN DISPUTED BY T HE DEPARTMENT. IN FACT, THE ONLY DISPUTE WHICH HAS BEEN RAKED UP IS T HE APPLICABILITY OR OTHERWISE THEREOF TO THE FACTS OF THE PRESENT CA SE, IN VIEW OF THE POSITION THAT THE INITIATION OF THE ASSESSMENT PRO CEEDINGS U/S 147 IN THE PRESENT CASE STANDS PRECEDED BY THE ISSUANC E OF THE ALLEGED ENQUIRY LETTER BY THE ITO. THIS DISPUTE HAS BEEN D EALT WITH IN DETAIL IN THE FOREGOING PARAGRAPHS. 45. IN 'BIR BAHADUR SINGH SIJWALI' (SUPRA), IT HAS BEEN HELD THAT WHERE THE AO ISSUED A NOTICE U/S 148 ON THE GROUND THAT THERE WAS ,FIN ESCAPEMENT OF INCOME AND THE BELIEF REGARDING SUCH ESCAPEMENT OF INCOME WAS FORMED ON THE FALLACIOUS A SSUMPTION OF THE AO THAT BANK DEPOSITS CONSTITUTED UNDISCLOSED I NCOME, OVER- LOOKING THE FACT THAT THE SOURCE OF THE DEPOSITS NE ED NOT NECESSARILY BE THE INCOME OF THE ASSESSEE, THE REASSESSMENT PRO CEEDINGS CANNOT BE SUSTAINED. IN THE PRESENT CASE, SIMILARLY, THE B ASIS OF INITIATION OF THE ASSESSMENT PROCEEDINGS U/S 147 WAS THE INFORMAT ION WITH THE DEPARTMENT, OF THE DEPOSITS MADE BY THE ASSESSEE IN HIS BANK ACCOUNT. 46. 'BIR BAHADUR SINGH SIJWALI' (SUPRA), MAKES REFE RENCE TO 'HINDUSAN LEVER LTD. VS. R.B. WADKAR'. 26R TTR 332 (BORN.), TO ITA NO.3534/DEL/2014 10 HOLD THAT THE REASONS RECORDED FOR REOPENING THE AS SESSMENT ARE TO BE EXAMINED ON A STANDALONE BASIS AND NOTHING CAN B E ADDED TO THE REASONS. IT WAS ALSO OBSERVED THAT THE REASONS MUST POINT OUT TO AN INCOME ESCAPING ASSESSMENT AND NOT MERELY NEED OF A N ENQUIRY WHICH MAY RESULT IN DETECTION OF AN INCOME ESCAPING ASSESSMENT. IT WAS OBSERVED THAT IT IS NECESSARY THAT THERE MUST B E SOMETHING WHICH INDICATES, EVEN IF IT DOES NOT ESTABLISH, THE ESCAPEMENT OF INCOME FROM ASSESSMENT; THAT IT IS ONLY ON THAT BAS IS THAT THE AO CAN FORM A PRIMA-FACIE BELIEF THAT AN INCOME HAS ES CAPED ASSESSMENT; THAT MERELY BECAUSE SOME FURTHER INVEST IGATIONS HAVE NOT BEEN CARRIED OUT, WHICH, IF MADE, COULD HAVE LE D TO DETECTION OF AN INCOME ESCAPING ASSESSMENT, THIS CANNOT BE REASO N ENOUGH TO HOLD THE VIEW THAT THE INCOME HAS ESCAPED ASSESSMEN T; AND THAT THERE HAS TO BE SOME KIND OF CAUSE AND EFFECT OF RE LATIONSHIP BETWEEN THE REASONS RECORDED AND THE INCOME ESCAPIN G ASSESSMENT. THE OBSERVATIONS OF THE HON'BLE SUPREME COURT IN TH E CASE OF 'ITO VS. LAKHMANI MEWAL DAS', 103 ITR 437 (SC), WERE REP RODUCED. AS UNDER: 'THE REASONS FOR THE FORMATION OF THE BELIEF MUST HAVE RATIONAL CONNECTION WITH OR RELEVANT BEARING ON THE FORMATION OF THE BELIEF. RATIONAL CONNECTION POSTULATES THAT THE RE MUST BE A DIRECT NEXUS OR LIVE LINK BETWEEN THE MATERIAL COMI NG TO THE NOTICE OF THE ITO AND THE FORMATION OF THIS BELIEF THAT TH ERE HAS BEEN ESCAPEMENT OF THE INCOME OF THE ASSESSEE FROM ASSES SMENT IN THE ITA NO.3534/DEL/2014 11 PARTICULAR YEAR BECAUSE OF HIS FAILURE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS. IT IS NO DOUBT TRUE THAT THE COURT CANNOT GO INTO SUFFICIENCY OR ADEQUACY OF THE MATERIAL AND SUBSTIT UTE ITS OWN OPINION FOR THAT OF THE ITO ON THE POINT AS TO WHET HER ACTION SHOULD BE INITIATED FOR REOPENING ASSESSMENT. AT THE SAME TIME WE HAVE TO BEAR IN MIND THAT IT IS NOT ANY AND EVERY MATERIAL, HOWSOEVER VAGUE AND INDEFINITE OR DISTANT, REMOTE AND FARFETCHED, W HICH WOULD WARRANT THE FORMATION OF THE BELIEF RELATING TO ESC APEMENT OF THE INCOME OF THE ASSESSEE FROM ASSESSMENT.' 47. IT WAS FURTHER 'OBSERVED AS FOLLOWS: '8. LET US , IN THE LIGHT OF THIS LEGAL POSITION, REVERT TO THE FACTS OF THE CAS E BEFORE US. ALL THAT THE REASONS RECORDED FOR REOPENING INDICATE IS THAT CASH DEPOSITS AGGREGATING TO RS.L0,24,100/- HAVE BEEN MADE IN THE BANK ACCOUNT OF THE ASSESSEE, BUT THE MERE FACT THAT THESE DEPOS ITS HAVE BEEN MADE IN A BANK ACCOUNT DOES NOT INDICATE THAT THESE DEPOSITS CONSTITUTE AN INCOME WHICH HAS ESCAPED ASSESSMENT. THE REASONS RECORDED FOR REOPENING THE ASSESSMENT DO NOT MAKE O UT A CASE THAT THE ASSESSEE WAS ENGAGED IN SOME BUSINESS AND THE I NCOME FROM SUCH A BUSINESS HAS NOT BEEN RETURNED BY THE ASSESS EE. AS WE DO NOT HAVE THE LIBERTY TO EXAMINE THESE REASONS ON TH E BASIS OF ANY OTHER MATERIAL OR FACT, OTHER THAN THE FACTS SET OU T IN THE REASONS SO RECORDED, IT IS NOT OPEN TO US TO DEAL WITH THE QUE STION AS TO WHETHER THE ASSESSEE COULD BE SAID TO BE ENGAGED IN ANY BUSINESS; ITA NO.3534/DEL/2014 12 ALL THAT IS TO BE EXAMINED IS WHETHER THE FACT OF T HE DEPOSITS, PER SE, IN THE BANK ACCOUNT OF THE ASSESSEE COULD BE BASIS OF HOLDING THE VIEW THAT THE INCOME HAS ESCAPED ASSESSMENT. THE AN SWER, IN OUR HUMBLE UNDERSTANDING, IS IN NEGATIVE. THE ASSESSING OFFICER HAS OPINED THAT AN INCOME OF RS.L 0,24, 1 00/- HAS ESCA PED ASSESSMENT OF INCOME BECAUSE THE ASSESSEE HAS RS.L0,24,100/- I N HIS BANK ACCOUNT BUT THEN SUCH AN OPINION PROCEEDS ON THE FA LLACIOUS ASSUMPTION THAT THE BANK DEPOSITS CONSTITUTE UNDISC LOSED INCOME, AND OVERLOOKS THE FACT THAT THE SOURCES OF DEPOSIT NEED NOT NECESSARILY BE INCOME OF THE ASSESSEE. OF COURSE, I T MAY BE DESIRABLE, FROM THE POINT OF VIEW OF REVENUE AUTHOR ITIES, TO EXAMINE THE MATTER IN DETAIL, BUT THEN REASSESSMENT PROCEEDINGS CANNOT BE RESORTED TO ONLY TO EXAMINE THE FACTS OF A CASE, NO MATTER HOW DESIRABLE THAT BE, UNLESS THERE IS A REASON TO BELIEVE, RATHER THAN SUSPECT, THAT AN INCOME HAS ESCAPEMENT ASSESSM ENT.' 48. THE TRIBUNAL CONCLUDED THUS: 'BUT THEN IN THE CASE BEFORE US THE ONLY REASON FOR REASSESSMENT PROCEEDINGS WAS THE FA CT OF DEPOSIT OF BANK ACCOUNT WHICH BY ITSELF DOES NOT LEAD TO INCOM E BEING TAXED IN THE HANDS OF THE ASSESSEE. LEARNED DEPARTMENTAL REPRESENTATIVE HAS REFERRED TO SEVERAL OTHER JUDICIAL PRECEDENTS I N SUPPORT OF THE PROPOSITION THAT AT THE STAGE OF INITIATION OF REAS SESSMENT PROCEEDINGS, ALL THAT IS TO BE SEEN IS EXISTENCE, R ATHER THAN ADEQUACY, OF THE MATERIAL TO COME TO THE CONCLUSION THAT INCOME ITA NO.3534/DEL/2014 13 HAS ESCAPED ASSESSMENT. THERE CANNOT BE ANY, AND TH ERE IS NO, DOUBT ON THE CORRECTNESS OF THIS PROPOSITION BUT TH EN, AS WE HAVE ELABORATELY EXPLAINED EARLIER IN THIS ORDER, THE MA TERIAL MUST INDICATE INCOME ESCAPING ASSESSMENT RATHER THAN DES IRABILITY OF FURTHER PROBE IN THE MATTER WHICH MAY OR MAY NOT LE AD TO INCOME ESCAPING THE ASSESSMENT, IN OUR HUMBLE UNDERSTANDIN G, CANNOT BE DRAWN.' 49. NOW, IN KEEPING WITH 'BIR BAHADUR SINGH SIJ WALI' (SUPRA), THIS 'INFORMATION CANNOT FORM A VALID BASIS FOR INITIATI NG ASSESSMENT PROCEEDINGS UNDER SECTION 147 OF THE LT. ACT. AS OB SERVED IN 'BIR BAHADUR SINGH SIJWALI' (SUPRA), THE MERE FACT THAT THE DEPOSITS HAD BEEN MADE IN THE BANK ACCOUNT DOES NOT INDICATE THA T THESE DEPOSITS CONSTITUTE INCOME WHICH HAS ESCAPED ASSESS MENT. 50. THUS, IT WAS A MERE SUSPICION OF THE AO, THAT PROMP TED HIM TO INITIATE ASSESSMENT PROCEEDINGS UNDER SECTION 147, WHICH IS NEITHER COUNTENANCED, NOR SUSTAINABLE IN LAW. TOO, THE AO P ROCEEDED ON THE FALLACIOUS ASSUMPTION THAT THE BANK DEPOSITS CO NSTITUTED UNDISCLOSED INCOME, OVER-LOOKING THE FACT THAT THE SOURCE OF THE DEPOSITS NEED NOT NECESSARILY BE THE INCOME OF THE ASSESSEE. THAT BEING SO, IN KEEPING WITH 'BIR BAHADUR SINGH SIJWAL I' (SUPRA), THE REASONS RECORDED TO INITIATE ASSESSMENT PROCEEDINGS UNDER SECTION 147 OF THE ACT AND ALL PROCEEDINGS PURSUANT THERETO , CULMINATING IN ITA NO.3534/DEL/2014 14 THE IMPUGNED ORDER, ARE CANCELLED. GROUND NO.2 IS, ACCORDINGLY, ACCEPTED.' C. APEX COURT JUDGMENT IN THE CASE OF PARIMISETTI SETHARAMAMMA VS. CIT REPORTED IN 57 ITR 532 HAS HEL D AS UNDER:- 'BY SECTIONS 3 AND 4 THE ACT IMPOSES A GENERAL LIAB ILITY TO TAX UPON ALL INCOME. BUT THE ACT DOES NOT PROVIDE THAT WHATE VER IS RECEIVED BY A PERSON MUST BE REGARDED AS INCOME LIABLE TO TA X. IN ALL CASES IN WHICH A RECEIPT IS SOUGHT TO BE TAXED AS INCOME, THE BURDEN LIES UPON THE DEPARTMENT TO PROVE THAT IT IS WITHIN THE TAXING PROVISION. WHERE HOWEVER A RECEIPT IS OF THE NATURE OF INCOME, THE BURDEN OF PROVING THAT IT IS NOT TAXABLE BECAUSE IT FALLS WIT HIN AN EXEMPTION PROVIDED BY THE ACT LIES UPON THE ASSESSEE. THE APP ELLANT ADMITTED THAT SHE HAD RECEIVED JEWELLERY AND DIVERSE SUMS OF MONEY FROM SITA DEVI AND SHE CLAIMED THAT THESE WERE GIFTS MAD E OUT OF LOVE AND AFFECTION. THE CASE OF THE APPELLANT WAS THAT T HE RECEIPTS DID NOT FALL WITHIN THE TAXING PROVISION: IT WAS NOT HE R CASE THAT BEING INCOME THE RECEIPTS WERE EXEMPT FROM TAXATION BECAU SE OF A STATUTORY PROVISION. IT WAS THEREFORE FOR THE DEPAR TMENT TO ESTABLISH THAT THESE RECEIPTS WERE CHARGEABLE TO TAX.' ITA NO.3534/DEL/2014 15 D. ITAT, DELHI BENCH DECISION IN CASE OF PRAVEEN K UMAR JAIN V ITO IN ITA NO. 1331/D/2015 FOR ASSESSMENT YEAR 2006 -07 DATED 22.1.2015 WHEREIN IT HAS BEEN HELD AS UNDER: - '12. THUS IT IS CLEAR THAT THE BASIC REQUIREMENT FO R REOPENING OF ASSESSMENT THAT THE AO MUST APPLY HIS MIND TO THE M ATERIALS IN ORDER TO HAVE REASONS TO BELIEVE THAT THE INCOME OF THE ASSESSEE ESCAPED ASSESSMENT WAS FOUND TO BE MISSING WHEN THE AO PROCEED TO REOPEN THE ASSESSMENT WHICH IS IN NATURE OF A PO ST MORTEM EXERCISE AFTER THE EVENT OF REOPENING OF THE ASSESS MENT. THEREFORE THE REOPENING OF THE ASSESSMENT WAS FOUND TO BE INV ALID AS IT DOES NOT SATISFY THE REQUIREMENT OF LAW THAT PRIOR TO TH E REOPENING OF THE ASSESSMENT THE AO HAS TO APPLY HIS MIND TO THE MATE RIAL AND CONCLUDE THAT HE HAS REASON TO BELIEVE THAT INCOME OF THE ASSESSEE HAS ESCAPED ASSESSMENT. APPLYING THE ABOVE PROPOSIT ION OF LAW IT LEAVES NO DOUBT IN THE MIND THAT IN THE CASE ON HAN D THE AO HAS REOPENED THE ASSESSMENT MECHANICALLY WITHOUT APPLIC ATION OF MIND TO CONCLUDE THAT THE SAID AMOUNT OF RS.6 LAC DEPOSI T IN THE BANK ACCOUNT OF THE ASSESSEE CONSTITUTES THE INCOME OF T HE ASSESSEE AND THE SAME HAS ESCAPED ASSESSMENT. THE DECISION RELIE D UPON BY THE LD DR IS NOT APPLICABLE IN THE FACTS OF THE PRESENT CASE BECAUSE IN THE SAID CASE NOT ONLY THE ACCOMMODATION ENTRY WERE FOUND BY THE INVESTIGATION WING BUT THE MODUS OPERANDI WAS ALSO DETECTED AND THEREFORE IT WAS FOUND THAT THE AO WAS HAVING THE S UFFICIENT ITA NO.3534/DEL/2014 16 MATERIAL AND INFORMATION TO FORM THE BELIEVE THAT T HE INCOME ASSESSABLE TO TAX HAS ESCAPED ASSESSMENT. IN VIEW O F THE FACTS AND CIRCUMSTANCES AS WELL AS THE DECISIONS RELIED UPON BY THE AR, THE REOPENING IS IN THE CASE OF THE ASSESSEE IS NOT VAL ID AND THE SAME IS QUASHED. SINCE THE REOPENING OF THE ASSESSMENT HELD TO BE INVALID THEREFORE OTHER GROUNDS OF THE APPEAL BECOME INFRAC TUOUS.' E. AMRIK SINGH VS ITO REPORTED IN 159 ITD 329 (ASR ) WHEREIN IT HAS BEEN HELD AS UNDER:- '17. THUS, TO REITERATE, WITH EFFECT FROM 01.07.199 5, THE CONDITION THAT SOME PROCEEDING MUST BE PENDING IS NO LONGER A PPLICABLE. UNDER THE EARLIER PROVISIONS OF SECTION 133(6), THE PRESCRIBED AUTHORITIES HAD THE POWER TO CALL FOR ANY INFORMATI ON FROM ANY PERSON WHICH WOULD BE USEFUL FOR, OR RELEVANT TO, A NY PROCEEDING UNDER THE ACT. THE AMENDMENT IN SUBSECTION (6) EMPO WERS THE PRESCRIBED AUTHORITIES TO CALL FOR INFORMATION FOR THE PURPOSE OF ANY INQUIRY UNDER THE ACT EVEN IN CASES WHERE NO PR OCEEDING IS PENDING. HOWEVER, AN INCOME TAX AUTHORITY BELOW THE RANK OF DIRECTOR OR COMMISSIONER CAN EXERCISE THE SAID POWE R IN RESPECT OF AN INQUIRY ONLY WITH THE PRIOR APPROVAL OF THE DIRE CTOR OR THE COMMISSIONER. 18. IN THE PRESENT CASE, THE ENQUIRY LETTER DATED 1 3.03 .2008 WAS ISSUED BY THE INCOME TAX OFFICER, I.E., AN OFFICER BELOW THE RANK ITA NO.3534/DEL/2014 17 OF THE INCOME TAX AUTHORITIES REFERRED TO IN THE SE COND PROVISO TO SECTION 133(6). THUS, IN KEEPING WITH THE SAID SECO ND PROVISO TO SECTION 133(6), PRIOR APPROVAL WAS REQUIRED TO BE O BTAINED FROM THE COMPETENT AUTHORITY BEFORE EXERCISING POWER UNDER S ECTION 133(6). 19. THERE IS NOTHING ON RECORD TO SUGGEST THAT ANY SUCH PRIOR APPROVAL WAS OBTAINED HEREIN. THE LETTER, PER SE, A LSO DOES NOT MAKE MENTION OF ANY SUCH APPROVAL. HENCE, THE POWER EXERCISED BY THE ITO, WITHOUT COMPLIANCE WITH THE SECOND PROV ISO TO SECTION 133(6), WOULD TANTAMOUNT TO AN ILLEGAL EXERCISE OF POWER. 20. HOWEVER, BE THAT AS IT MAY, THIS IS NOT DETRIME NTAL TO THE CAUSE OF THE DEPARTMENT. IN THE PRESENT CASE, THE ITO DID NOT MERELY ASK FOR INFORMATION FROM THE ASSESSEE. THIS TAKES THE C ASE OUT OF THE KEN OF SECTION 133(6), AS SHALL PRESENTLY BE SEEN.' 13. IN VIEW OF ABOVE, I AM OF THE CONSIDERED VIEW THAT THE ABOVE LEGAL ISSUE IS EXACTLY THE SIMILAR AND IDENTICAL TO THE ISSUE INVOLVED IN THE PRESENT APPEAL AND IS SQUARELY COVERED BY THE DECISIONS AS DISCUSS ED ABOVE. HENCE, RESPECTFULLY FOLLOWING THE ABOVE PRECEDENTS, I DEC IDE THE LEGAL ISSUE IN DISPUTE IN FAVOR OF THE ASSESSEE AND AGAINST THE REVENUE AN D QUASH THE REASSESSMENT PROCEEDINGS BEING BAD IN LAW AND ILLEGAL. ITA NO.3534/DEL/2014 18 14. AS I HAVE ALREADY HELD THAT THE REASSESSMENT IS BAD IN LAW, I DO NOT FIND IT NECESSARY TO DECIDE OTHER ISSUES WHICH ARE ON MERIT S OF THE CASE. 15. IN THE RESULT, THE ASSESSEES APPEAL STANDS A LLOWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 15-09-2016. SD/- (H.S. SIDHU) JUDICIAL MEMBER DATED : 15-09-2016 SR BHATANGAR COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A), NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.