Billo, Delhi V. ITO, Ward- 1(2), Meerut

ITA 3817/DEL/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 0058 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-12-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 22-05-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D S RAWAT
• Keywords: Reopening of assessment; Bogus purchase; Bogus Share capital; Income from undisclosed sources; Opportunity of being heard; Principle of natural justice; Bonafide belief; Additional evidence; Question of law; Tangible material; Difference of opinion; Accommodation entries; Reason to believe; Change of opinion; Reassessment proceedings
• Section: 143(3); 142(1); 147; 148; 144; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : SMC : NEW DELHI BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO.3817/DEL/2018 ASSESSMENT YEAR: 2010-11 SMT.BILLO, C/O KAPIL GOEL, ADVOCATE, F-26/124, SECTOR-7, ROHINI. PAN: BAKPB9355A VS. ITO, WARD-1(2), MEERUT. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI KAPIL GOEL, ADVOCATE REVENUE BY : SHRI D.S. RAWAT, SR.DR DATE OF HEARING : 11.10.2018 DATE OF PRONOUNCEMENT : 12.12.2018 ORDER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 19 TH MARCH, 2018 OF THE CIT(A), MEERUT, RELATING TO ASSESSMENT YEAR 2010-11. 2. THE FACTS OF THE CASE, IN BRIEF, ARE THAT THE AS SESSEE IS A HOUSEWIFE AND WAS NOT FILING HER INCOME-TAX RETURNS. INFORMATION WAS RECE IVED BY THE ASSESSING OFFICER AS PER THE ONLINE AIR FROM CIB KANPUR THAT THE ASSESSE E HAS DEPOSITED CASH OF RS.30,10,415/- IN HER SAVINGS BANK ACCOUNT WITH SYN DICATE BANK DURING FINANCIAL YEAR 2009-10. A QUERY LETTER DATED 04.01.2017 WAS ISSUE D TO THE ASSESSEE FOR VERIFICATION OF FINANCIAL TRANSACTION ENTERED INTO BY HER. HOWEVER , NO REPLY WAS RECEIVED FROM THE ITA NO.3817/DEL/2018 2 SIDE OF THE ASSESSEE. SINCE THE SOURCE OF CASH DEP OSIT WAS NOT EXPLAINED AND THE PAN AND ITR OF THE ASSESSEE WAS NOT AVAILABLE, THE ASSE SSING OFFICER PRESUMED THAT THE CASH WAS DEPOSITED BY THE ASSESSEE OUT OF HER INCOM E FROM UNDISCLOSED SOURCES. HE, THEREFORE, AFTER OBTAINING THE SATISFACTION OF THE PRINCIPAL CIT, MEERUT, ISSUED NOTICE U/S 148 OF THE IT ACT AFTER RECORDING THE FOLLOWING REASONS:- REASONS FOR ISSUING NOTICE U/S 148 OF THE IT ACT, 1961. AS PER THE ONLINE AIR INFORMATION RECEIVED FROM THE CIB, KANPUR, THE ASSESSEE HAD DEPOSITED CASH OF RS.3010415/- IN HER SAVING BA NK ACCOUNT WITH SYNDICATE BANK DURING THE FINANCIAL YEAR 2009-10. Q UERY LETTER DATED 04.01.2017 WAS ISSUED TO THE ASSESSEE FOR VERIFICAT ION OF FINANCIAL TRANSACTION ENTERED INTO BY HER BUT NO REPLY WAS RECEIVED. SINC E, THE SOURCE OF CASH DEPOSIT HAS NOT BEEN EXPLAINED AND THE PAN AND 1TR OF THE A SSESSEE IS ALSO NOT AVAILABLE, IT IS PRESUMED THAT THE CASH WAS DEPOSIT ED BY THE ASSESSEE OUT OF HER INCOME FROM UNDISCLOSED SOURCES. 2. IN VIEW OF THESE FACTS, 1 HAVE REASON TO BELIEVE THAT INCOME OF RS.3010415/- CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR THE A. Y. 2010-11 WITHIN THE MEANING OF SECTION 147 OF THE INCOME-TAX ACT, 1961 . THEREFORE, TO ASSESS THE ESCAPED INCOME, PROCEEDINGS U/S 147 OF THE INCOME T AX ACT, 1961 ARE BEING INITIATED IN THIS CASE AND NOTICE U/S 148 IS BEING ISSUED. 3. THE ASSESSEE DID NOT FILE THE RETURN IN RESPONSE TO SUCH NOTICE U/S 148. THEREAFTER, NOTICE U/S 142(1) WITH A QUESTIONNAIRE WAS ISSUED ON 24 TH APRIL, 2017 FIXING THE DATE FOR COMPLIANCE AS 5 TH MAY, 2017. HOWEVER, THERE WAS NO COMPLIANCE. THEREAFTER, THE ASSESSING OFFICER PROVIDED A NUMBER OF OPPORTUNITIES, STILL, THERE WAS NO COMPLIANCE. THE ASSESSING OFFICER, THEREFORE, P ROCEEDED TO DETERMINE THE TAXABLE INCOME OF THE ASSESSEE U/S 144 OF THE IT ACT. DURI NG THE COURSE OF ASSESSMENT PROCEEDINGS, HE NOTED THAT THERE ARE VARIOUS CASH D EPOSITS IN THE BANK ACCOUNTS AND THERE ARE ALSO CERTAIN WITHDRAWALS ON DIFFERENT DAT ES. AFTER CONSIDERING THE WITHDRAWALS TO BE EXPLAINED FOR THE SUBSEQUENT DEPO SITS, THE ASSESSING OFFICER MADE AN ADDITION OF RS.20,30,415/- U/S 68 OF THE IT ACT. ITA NO.3817/DEL/2018 3 4. BEFORE CIT(A), THE ASSESSEE CHALLENGED THE VALID ITY OF THE REOPENING OF THE ASSESSMENT AS WELL AS THE ADDITION ON MERIT. THE A SSESSEE TRIED TO FILE CERTAIN SALE DEEDS TO EXPLAIN THE SOURCE OF SUCH CASH DEPOSITS B EING SALE OF AGRICULTURAL LAND. HOWEVER, THE LD.CIT(A) DISMISSED BOTH THE GROUNDS. SO FAR AS THE VALIDITY OF THE REASSESSMENT PROCEEDINGS WAS CONCERNED, BASICALLY I T WAS CHALLENGED BEFORE THE CIT(A) REGARDING NON-SERVICE OF NOTICE U/S 148. HO WEVER, HE OBSERVED THAT NOTICE WAS DULY SERVED BY RPAD WHICH WAS NEVER RETURNED BA CK BY THE POSTAL AUTHORITIES AND ANOTHER NOTICE U/S 148 WAS ALSO SERVED ON THE D AUGHTER OF THE ASSESSEE ON 29 TH MARCH, 2017 WHICH IS MUCH BEFORE THE COMPLETION OF THE ASSESSMENT. THERE WAS NO PROTEST OR LETTER FROM THE SIDE OF THE ASSESSEE OR HER COUNSEL WITH REGARD TO NON-SERVICE OF NOTICE U/S 148. FURTHER, SHOW CAUSE NOTICE U/S 1 44 WAS ALSO ISSUED TO THE ASSESSEE. UNDER THESE CIRCUMSTANCES, HE HELD THAT THE REASSES SMENT PROCEEDINGS ARE VALID. SO FAR AS THE MERIT OF THE CASE IS CONCERNED, THE LD.CIT(A ) REFUSED TO ACCEPT THE ADDITIONAL EVIDENCE FILED BEFORE HIM IN ABSENCE OF PROPER APPL ICATION FOR ADMISSION OF THE SAME UNDER RULE 46A OF THE IT ACT. 4.1 AGGRIEVED WITH SUCH ORDER OF THE CIT(A), THE AS SESSEE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISING THE FOLLOWING GROUNDS:- JURISDICTIONAL GROUND CHALLENGING VALIDITY OF THE R EOPENING PROCEEDINGS 1. THAT ORDERS PASSED BY LD AO AND LD CIT-A ARE BAD I N LAW BEING FOUNDED ON THE REASONS WHICH ARE SOLELY BASED ON IN FORMATION OF CASH DEPOSIT IN THE BANK ACCOUNT OF THE ASSESSEE WHICH C ANNOT CONFER VALID JURISDICTION U/S 148 OF THE ACT TO INITIATE THE REO PENING PROCEEDINGS AND ACCORDINGLY NOTICE ISSUED U/S 148 AND ALL SUBSEQUEN T PROCEEDINGS INCLUDING ORDERS OF LD AO AND LD CIT-A ARE VOID AB INITIO ; ITA NO.3817/DEL/2018 4 2. THAT ORDERS PASSED BY LD AO AND LD CIT-A ARE BAD I N LAW AS MERE AIR INFORMATION IS THE BASIS TO REOPEN THE PRESENT CASE U/S 148 OF THE ACT WHICH INFORMATION CANNOT BE TREATED AS GIVING RISE TO VAL ID AND ADEQUATE REASONS TO BELIEF THAT INCOME HAS ESCAPED ASSESSMENT WITHIN TH E MEANING OF SECTION 148 OF THE ACT, ACCORDINGLY NOTICE ISSUED U/S 148 AND ALL SUBSEQUENT PROCEEDINGS INCLUDING ORDERS OF LD AO AND LD CIT-A ARE VOID AB INITIO ; 3. THAT ORDERS PASSED BY LD AO AND LD CIT-A ARE BAD I N LAW SINCE NOTICE U/S 148 WAS ADMITTEDLY NOT SERVED ON ASSESSEE IN AC CORDANCE WITH LAW AND AS STATED BY CIT-A SERVICE WAS MADE ON ASSESSEES DAUG HTER WHICH ITSELF IS SERIOUSLY DISPUTED, AND SAID PURPORTED SERVICE CANN OT GIVE VALID JURISDICTION TO THE LD AO TO PASS ORDER U/S 144/147, ACCORDINGLY NO TICE ISSUED U/S 148 AND ALL SUBSEQUENT PROCEEDINGS INCLUDING ORDERS OF LD AO AN D LD CIT-A ARE VOID AB INITIO ; MERITS OF THE CASE 4. THAT LD CIT-A SERIOUSLY ERRED IN CONFIRMING THE ARB ITRARY AND UNLAWFUL ADDITION OF RS 20,30,415 WITHOUT APPRECIATING THAT SOURCE OF CASH DEPOSITS IS NOT ONLY FULLY EXPLAINED BY SALE CONSIDERATION OF VILLA GE AGRICULTURAL LAND FOR WHICH REQUISITE EVIDENCE WAS TENDERED TO FIRST APPELLATE AUTHORITY WHERE WITHOUT LOOKING TO IMPECCABLE EVIDENCE ADDITION IS CONFIRMED WHICH DESERVES TO BE DELETED; 5. THAT LD CIT-A SERIOUSLY ERRED IN CONFIRMING THE ARB ITRARY AND UNLAWFUL ADDITION OF RS 20,30,415 WITHOUT APPRECIATING THAT BANK STATEMENT OF THE CONCERNED PERIOD HAS NOT BEEN OBJECTIVELY APPRECIAT ED AS PER LAW; 5.1 THAT LD CIT-A SERIOUSLY ERRED IN CONFIRMING THE ARBITRARY AND UNLAWFUL ADDITION OF RS 20,30,415 WITHOUT APPRECIATING THAT SECTION 68 OF THE ACT CANT APPLY TO BANK STATEMENT ETC WHICH MAKES THE ADDITIO N AS BAD IN LAW. NATURAL JUSTICE SERIOUS VIOLATION : MAKES THE ASSES SMENT A NULLITY 6. THAT ORDERS PASSED BY LD AO AND ID CIT-A ARE BAD I N LAW AS LD AO PASSED THE ORDER U/S 144 IN STRANGULATION OF PRINCI PLES OF NATURAL JUSTICE ( AUDI ALTREM PARTEM ) WHICH MAKES THE ENTIRE PROCEEDINGS NULLITY ( CORAM NON JUDICE ) IN EYES OF LAW. 7. THAT THE APPELLANT CRAVES LEAVE TO ADD ADD/ALTER A NY/ALL GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING OF THE APPE AL. 5. THE LD. COUNSEL FOR THE ASSESSEE RELIED ON THE F OLLOWING DECISIONS:- I) DELHI ITAT SMC BENCH . IN CASE . BHAJAN LAL ORDER D ATED .20-09-2018 ITA NO.3817/DEL/2018 5 II) DELHI IT AT F BENCH, IN CASE . PATI RAM VILL-KADIPU R ORDER DATED. 07- 09-2018 III) DELHI ITAT SMC BENCH. IN CASE. SHRI JAGAT SINGH ORD ER DATED. 04-09- 2018 IV) PUNE ITAT SMC BENCH. IN CASE. ZAHEER ABDULHAMID MUL ANI ORDER DATED.31-08-2018. V) DELHI ITAT SMC BENCH, IN CASE. SMT .SWATI VERMA ORD ER DATED. 01-08- 2018 VI) BENGALURE HIGH COURT OF KARNATAKA . IN CASE. M/S SA SKEN COMMUNICATION TECHNOLOGIES LTD ORDER DATED .23-07-2 018 VII) BENGALURE HIGH COURT OF KARNATAKA . IN CASE. M/S SH RI. V.RAMAIAH ORDER DATED. 02-07-2018 VIII) DELHI ITAT A BENCH, IN CASE. SMT. BABBAL BHATIA ORD ER DATED. 08-06- 2018 IX) DELHI ITAT SMC BENCH, IN CASE. SHRI .KRISHAN KUMAR ORDER DATED. 15- 12-2017 X) DELHI ITAT SMC BENCH . IN CASE . SHRI .MAHAVIR PARS AD ORDER DATED. 09- 10-2017 XI) LUCKNOW ITAT SMC BENCH, IN CASE. SHRI IND A PAL SIN GH ORDER DATED. 18-09-2018. 5.1 REFERRING TO THE ABOVE DECISIONS, HE SUBMITTED THAT THE REASSESSMENT PROCEEDING INITIATED BY THE ASSESSING OFFICER IS VOID AB INITIO WHICH WAS MADE ON THE BASIS OF AIR INFORMATION THAT THE ASSESSEE HAS MADE CASH DEPOSIT S. SO FAR AS THE MERIT OF THE CASE IS CONCERNED, THE LD. COUNSEL OF THE ASSESSEE SUBMITTE D THAT THE DEPOSITS MADE IN THE BANK ACCOUNT OF THE ASSESSEE ARE OUT OF SALE OF AGRICULT URAL LAND ON DIFFERENT DATES AND, THEREFORE, SALE OF AGRICULTURAL LAND BEING EXEMPT F ROM TAX, NO ADDITION COULD BE MADE. ITA NO.3817/DEL/2018 6 5.2 THE LD. DR, ON THE OTHER HAND, RELIED ON THE FO LLOWING DECISIONS AND SUBMITTED THAT THE REASSESSMENT PROCEEDINGS INITIATED BY THE ASSESSING OFFICER AND UPHELD BY THE CIT(A) ARE PERFECTLY VALID AS PER LAW. THE ASSESSEE IS A NON-FILER OF INCOME-TAX RETURN AND WHEN INFORMATION WAS RECEIVED BY THE ASSESSING OFFICER FROM THE CIB THAT THERE WERE HUGE CASH DEPOSITS AND THE ASSESSEE DID NOT RE PLY TO THE QUERY RAISED BY THE ASSESSING OFFICER REGARDING THE SOURCE OF SUCH DEPO SIT, THERE WAS NO OTHER OPTION BUT TO INITIATE PROCEEDINGS U/S 148 OF THE IT ACT:- 1. PCIT VS PARAMOUNT COMMUNICATION (P.) LTD. (2017-TI QL-253-SC-IT) WHERE HONBLE SUPREME COURT DISMISSED SLP OF ASSESS EE. INFORMATION REGARDING BOGUS PURCHASE BY ASSESSEE RECEIVED BY DRI FROM CCE WHICH WAS PASSED ON TO REVENUE AUTHORITIES WAS 'TANGIBLE MATERIAL OUTSIDE RECORD' TO INITIATE VALID REASSESSMENT PROCEEDINGS. PCIT VS PARAMOUNT COMMUNICATION (P.) LTD. T20171 79 TAXMANN.COM 409 (DELHI)/R2017L 392 ITR 444 (DELHI) WHERE HONBLE DELHI HIGH COURT HELD THAT INFORMATIO N REGARDING BOGUS PURCHASE BY ASSESSEE RECEIVED BY DRI FROM CCE WHICH WAS PASS ED ON TO REVENUE AUTHORITIES WAS 'TANGIBLE MATERIAL OUTSIDE RECORD' TO INITIATE VALID REASSESSMENT PROCEEDINGS 2. ARADHNA ESTATE (P.) LTD.VS PCIT [2018] 91 TAXMANN. COM 119 WHERE HONBLE GUJARAT HIGH COURT HELD THAT WHERE RE ASSESSMENT PROCEEDINGS WERE INITIATED ON BASIS OF INFORMATION RECEIVED FRO M INVESTIGATION WING THAT ASSESSEE HAD RECEIVED CERTAIN AMOUNT FROM SHELL COM PANIES WORKING AS AN ACCOMMODATION ENTRY PROVIDER, MERELY BECAUSE THESE TRANSACTIONS WERE SCRUTINISED BY ASSESSING OFFICER DURING ORIGINAL AS SESSMENT, REASSESSMENT COULD NOT BE HELD UNJUSTIFIED. 3. PUSHPAK BULLION (P.) LTD. VS DCIT [2017] 85 TAXMAN N.COM 84 (GUJARAT) WHERE HONBLE GUJARAT HIGH COURT HELD THAT WHERE IN VESTIGATION WING OF DEPARTMENT HAD DURING COURSE OF INVESTIGATION IN CA SE OF A THIRD PARTY FOUND THAT HE WAS INDULGED IN PROVIDING ACCOMMODATION ENTRIES AND BOGUS BILLS, AND ASSESSEE HAD MADE SIZEABLE PURCHASES FROM HIM, REOP ENING NOTICE AGAINST ASSESSEE WAS JUSTIFIED ITA NO.3817/DEL/2018 7 4. ANKIT FINANCIAL SERVICES LTD. VS DCIT [2017] TAXMA NN.COM 58 (GUJARAT) WHERE HONBLE GUJARAT HIGH COURT HELD THAT WHERE MA TERIAL RECOVERED IN SEARCH OF ANOTHER PERSON INDICATED THAT ASSESSEE HAD RECEI VED BOGUS SHARE APPLICATIONS THROUGH ACCOMMODATION ENTRIES, SINCE ASSESSEE WAS B ENEFICIARY, INITIATION OF RE- OPENING WAS JUSTIFIED. 5. AASPAS MULTIMEDIA LTD. VS DCIT [2017] 83 TAXMANN.C OM 82 (GUJARAT) WHERE HONBLE GUJARAT HIGH COURT HELD THAT WHERE RE ASSESSMENT WAS MADE ON BASIS OF INFORMATION RECEIVED FROM PRINCIPAL DIT (I NVESTIGATION) THAT ASSESSEE WAS BENEFICIARY OF ACCOMMODATION ENTRIES BY WAY OF SHARE APPLICATION PROVIDED BY A THIRD PARTY, SAME WAS JUSTIFIED. 6. ANKIT AGROCHEM (P.) LTD. VS JCIT [2018] 89 TAXMANN .COM 45 (RAJASTHAN) (COPY ENCLOSED) WHERE HONBLE RAJASTHAN HIGH COURT HELD THAT WHERE DIT INFORMED THAT ASSESSEE- COMPANY HAD RECEIVED SHARE APPLICATION MO NEY FROM SEVERAL ENTITIES WHICH WERE ONLY ENGAGED IN BUSINESS OF PROVIDING BO GUS ACCOMMODATION ENTRIES TO BENEFICIARY CONCERNS, REASSESSMENT ON BASIS OF S AID INFORMATION WAS JUSTIFIED. 7. MONA MAHESH BHOJANI VS ITO (2017-TIQL-345-SC-IT) SLP DISMISSED AGAINST APPEAL CHALLENGING THE JUDGME NT, WHEREBY THE HIGH COURT HAD HELD THAT REOPENING INITIATED IN CASE OF AN ASS ESSEE WHO HAD NOT FILED HIS RETURN, COULD NOT BE CLAIMED BY THE ASSESSEE TO BE BASED ON 'CHANGE OF OPINION'. THE ASSESSEE HAD ALSO CHALLENGED THE ACTION OF HIGH COURT IN HOLDING THAT WHEN THE AO HAD TANGIBLE MATERIAL AT HIS COMMAND TO FORM A BONAFIDE BELIEF THAT INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT, TH E WRIT COURT WOULD NOT INTERFERE WITH THE FORMATION OF SUCH BELIEF UNLESS IT IS SHOWN TO BE WHOLLY PERVERSE. 8. INDU LATA RANQWALA VS DCIT [2017] 80 TAXMANN.COM 1 02(DELHI) [2016] 384 ITR 337 (DELHI) [2016] 286 CTR 474 (DELHI) WHERE HONBLE DELHI HIGH COURT HELD THAT WHERE INITIAL RETURN OF INCOME IS P ROCESSED UNDER SECTION 143(1), IT IS NOT NECESSARY IN SUCH A CASE FOR ASSESSING OF FICER TO COME ACROSS SOME FRESH TANGIBLE MATERIAL TO FORM 'REASONS TO BELIEVE' THAT INCOME HAS ESCAPED ASSESSMENT 9. KRISHNA DEVELOPERS AND CO VS DCIT (2018-TIQL-51-SC -IT) WHERE HONBLE SUPREME COURT HELD THAT REOPENING ON THE BASIS OF VERY SAME REASONS ON WHICH THE AO INITIALLY DESIRED TO MAKE A DDITIONS BUT HAD FAILED, WAS JUSTIFIED, IF THE ORIGINAL ASSESSMENT WAS DECLARED AS INVALID AS HAVING BEEN COMPLETED WITHOUT SERVICE OF NOTICE ON THE ASSESSEE WITHIN THE STATUTORY PERIOD. 10 THAKORBHAI MAGANBHAI PATEL VS ITO [2017] 78 TAXM ANN.COM 201 (SC)/ [2017] 245 TAXMAN 333 (SC) WHERE HONBLE SUPREME COURT DISMISSED SLP AGAINST H IGH COURT'S RULING WHERE REOPENING OF ASSESSMENT U/S 147 WAS HELD TO BE VALI D DESPITE THE AO NOT PASSING SPEAKING ORDER AGAINST OBJECTIONS FILED BY THE ASSE SSEE. ITA NO.3817/DEL/2018 8 THAKORBHAI MAGANBHAI PATEL VS ITO [2017] 79 TAXMANN .COM 409 (DELHI)/[2017] 392 ITR 444 (DELHI) WHERE HONBLE DELHI HIGH COURT HELD AS FOLLOWS: IT IS TRUE THAT IN THE COMMUNICATIONS, THE PETITIO NER HAS REQUESTED FOR SUPPLY OF DOCUMENTS. HOWEVER, THE PETITIONER ALSO RAISED THE OBJECTIONS TO THE ASSESSING OFFICER EXERCISING THE POWERS OF REASSESSMENT. IN T RUE SPIRIT IF THESE COMMUNICATIONS WERE EXAMINED, THE ASSESSING OFFICER WOULD HAVE REALISED THAT THE ASSESSEE WAS OBJECTING TO THE PROCESS OF REOPEN ING. IN TERMS OF DECISION OF SUPREME COURT IN CASE OF GKN DRIVESHAFTS (INDIA) LT D. V. ITO [2003] 259 ITR 19/[2002] 125 TAXMAN 963, THE ASSESSING OFFICER OUG HT TO HAVE DISPOSED OF THE OBJECTIONS. ORDINARILY, WE WOULD HAVE INSISTED ON A SSESSING OFFICER DOING SO. HOWEVER, FACTS IN THE PRESENT CASE ARE SOMEWHAT PEC ULIAR AND NO USEFUL PURPOSE WOULD BE SERVED IN ENSURING ONLY COSMETIC PURPOSE O F COMPLETION OF FORMALITY AND THEN INVITING A FRESH LITIGATION. UNDER THE CIR CUMSTANCES, WE HAVE EXAMINED THE MERITS OF THE PETITIONER'S CHALLENGE TO THE REO PENING ALSO 11. MOHAMMEDALLY NOORBHOV BANDUKWALA TRUST VS ITO (2017 -TIQL-341- HC-MUM-IT) WHERE HONBLE MUMBAI HIGH COURT HELD THAT ASSESSMEN T CANNOT BE TERMED AS INVALID FOR NON CONSIDERATION OF ASSESSEE'S OBJECTI ONS, IF THERE WAS UNDUE DELAY ON THE PART OF ASSESSEE IN OBJECTING TO THE REASONS. 12. ARAVALI INFRAPOWER LTD. VS DCIT (2017-TIOL-42-SC-IT ) WHERE HONBLE SUPREME COURT CONFIRMED THE DECISION OF HIGH COURT, WHEREBY IT WAS HELD THAT REOPENING OF ASSESSMENT IS JUSTIFIED, WHEN THE BANK STATEMENTS AS WELL AS THE ITR FORM DISCLOSING RETURNS, RAISES MOR E QUESTIONS THAN SATISFYING THE QUERIES ALREADY RAISED. ARAVALI INFRAPOWER LTD. VS DCIT [2017] 77 TAXMANN.C OM 322 (DELHI)/[2017] 390 ITR 456 (DELHI) WHERE HONBLE DELHI HIGH COURT HELD THAT WHERE ASSE SSEE-COMPANY FURNISHED ONLY CHEQUE NUMBERS, BUT FAILED TO PROVIDE BANK DET AILS OF SHARE APPLICANTS AND IT WAS FOUND THAT SHARE APPLICANTS HAD MEAGRE INCOME W HILE INVESTING HUGE SUM OF RS. 8 CRORES, RE-OPENING NOTICE WAS JUSTIFIED 13. YOGENDRAKUMAR GUPTA VS ITO (51 TAXMANN.COM 383) (SC )/[2014] 227 TAXMAN 374 (SC) WHERE HONBLE SUPREME COURT HELD THAT WHERE SUBSEQU ENT TO COMPLETION OF ORIGINAL ASSESSMENT, ASSESSING OFFICER, ON BASIS OF SEARCH CARRIED OUT IN CASE OF ANOTHER PERSON, CAME TO KNOW THAT LOAN TRANSACTIONS OF ASSESSEE WITH A FINANCE COMPANY WERE BOGUS AS SAID COMPANY WAS ENGAGED IN P ROVIDING ACCOMMODATION ENTRIES, IT BEING A FRESH INFORMATION, HE WAS JUSTI FIED IN INITIATING REASSESSMENT PROCEEDING IN CASE OF ASSESSEE. ITA NO.3817/DEL/2018 9 14. RAYMOND WOOLLEN MILLS LTD. V. ITO AND OTHERS [236 ITR 34] WHERE HONBLE SUPREME COURT HELD THAT IN DETERMININ G WHETHER COMMENCEMENT OF REASSESSMENT PROCEEDINGS WAS VALID IT HAS ONLY T O BE SEEN WHETHER THERE WAS PRIMA FACIE SOME MATERIAL ON THE BASIS OF WHICH THE DEPARTMENT COULD REOPEN THE CASE. THE SUFFICIENCY OR CORRECTNESS OF THE MATERIA L IS NOT A THING TO BE CONSIDERED AT THIS STAGE 15. R.K. MALHOTRA ITO VS KASTURBHAI LALBHAI [1977] 109 ITR 537 (SC) WHERE HONBLE SUPREME COURT HELD THAT THE INTIMATIO N WHICH THE INCOME-TAX OFFICER RECEIVED FROM THE AUDIT DEPARTMENT WOULD CO NSTITUTE 'INFORMATION' WITHIN THE MEANING OF SECTION 147(B). 16. CIT VS P.V.S. BEEDIES (P.) LTD. [I999] 103 TAXMAN 2 94 (SC/[999] 237 ITR 13 (SC)/[1999] 155 CTR 538 (SC) WHERE HONBLE SUPREME COURT HELD THAT AUDIT PARTY H AD MERELY POINTED OUT A FACT WHICH HAD BEEN OVERLOOKED BY ASSESSING OFFICER AND THIS WAS NOT A CASE OF INFORMATION ON A QUESTION OF LAW. REOPENING OF CASE UNDER SECTION 147(B) ON BASIS OF FACTUAL INFORMATION GIVEN BY INTERNAL AUDI T PARTY WAS VALID IN LAW 17. ACIT VS RAIESH JHAVERI STOCK BROKERS (P.) LTD [2007 ] 161TAXMAN 316 (SC)/[2007] 291 ITR 500 (SC)/[2007] 210 CTR 30 (SC) WHERE HONBLE SUPREME COURT HELD THAT SO LONG AS TH E CONDITIONS OF SECTION 147 ARE FULFILLED, THE ASSESSING OFFICER IS FREE TO INI TIATE PROCEEDINGS UNDER SECTION 147 AND FAILURE TO TAKE STEPS UNDER SECTION 143(3) WILL NOT RENDER THE ASSESSING OFFICER POWERLESS TO INITIATE REASSESSMENT PROCEEDI NGS, EVEN WHEN INTIMATION UNDER SECTION 143(1) HAS BEEN ISSUED. ADANI EXPORTS V. DCIT[1999] 240 ITR 224 (GUJ) WAS DISTINGUISHED. 18. YUVRAJ V. UNION OF INDIA [315 ITR 84] (SC) (COPY EN CLOSED) WHERE HONBLE SUPREME COURT HELD THAT POINTS NOT DE CIDED WHILE PASSING ASSESSMENT ORDER UNDER SECTION 143(3) WAS NOT A CAS E OF CHANGE OF OPINION. IT WAS HELD THAT ASSESSMENT WAS REOPENED VALIDLY. 19. PARAMOUNT INTERCONTINENTAL PVT LTD VS ITO (2017-T1 OL-376-HC-DEL-IT) WHERE HONBLE DELHI HIGH COURT HELD THAT WHEN ASSES SEE HIMSELF IS UNABLE TO SATISFACTORILY EXPLAIN CORRECTNESS OF THE ENTRIES M ADE IN HIS BOOKS, HE CANNOT CHALLENGE THE REASSESSMENT NOTICE ISSUED U/S 147. 20. AJANTA PVT LTD VS ACIT (2017-TIOL-126-HC-AHM-IT) WHERE HONBLE GUJARAT HIGH COURT HELD THAT REOPENIN G IS JUSTIFIED ON THE BASIS THAT WHILE CLAIMING DEDUCTION U/S 80IA, THE ASSESSE E HAD NOT DEBITED ANY FINANCIAL CHARGES AND ADMINISTRATIVE EXPENSES TO TH E WINDMILL DIVISION WHILE COMPUTING PROFITS FROM WINDMILL DIVISION, THEREBY F AILING TO DISCLOSE TRUE FACTS NECESSARY FOR ASSESSMENT. ITA NO.3817/DEL/2018 10 21. MURLIBHAI FATANDAS SAWLANI VS ITO (2016-TIQL-370-HC -AHM-IT) WHERE HONBLE GUJARAT HIGH COURT HELD THAT IT IS NO T OPEN TO THE ASSESSEE TO OBJECT TO THE REOPENING BY ASKING THE AO TO PRODUCE THE SOURCE FROM WHERE THE AO HAS GATHERED THE INFORMATION FOR FORMING A BELIE F THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. 22.GREENWELL ORCHARD VS ITO [2017] 82 TAXMANN.COM 4 61 (GUJARAT) WHERE HONBLE GUJARAT HIGH COURT HELD WHERE IN A SU BSEQUENT YEAR ASSESSEE COULD NOT PROVE AGRICULTURAL INCOME BY WAY OF SALE OF TEAKWOOD AND, THUS, DISCLOSED UNACCOUNTED INCOME, IN VIEW OF FACT THAT INCOME FOR EARLIER YEAR UNDER CONSIDERATION WAS FROM SIMILAR SOURCE, REOPENING OF ASSESSMENT WAS JUSTIFIED. 23. DR CHHANQUR RAI VS CIT (2017-TIOL-660-HC-ALL-I T) WHERE HONBLE ALLAHABAD HIGH COURT HELD THAT NON-DI SCLOSURE OF CORRESPONDING INCOME BY THE ASSESSEE SO AS TO PROVE THE SOURCE OF INVESTMENT IN RESIDENTIAL PROPERTY, IS SUFFICIENT FOR BELIEF OF ESCAPED ASSES SMENT. 24. AMSA INDIA PVT LTD VS CIT (2017-TIOL-603-HC-DEL -IT) WHERE HONBLE DELHI HIGH COURT HELD THAT THE DEPART MENT CAN REASSESS THE RETURNS FURNISHED BY THE ASSESSEE IF THE AO HAS A R EASON TO BELIEVE THAT THE FACTS HAVE A PROXIMATE LINK WITH THE ASSESSEE'S CONCEALED INCOME. 6. SO FAR AS THE MERIT OF THE CASE IS CONCERNED, TH E LD. DR SUBMITTED THAT THE ASSESSEE DID NOT APPEAR BEFORE THE ASSESSING OFFICE R AND NEVER FILED ANY DETAILS TO EXPLAIN THE SOURCE OF SUCH HEAVY CASH DEPOSITS. BE FORE THE CIT(A), THE ASSESSEE NEVER MADE ANY APPLICATION UNDER RULE 46A FOR ADMISSION O F SUCH ADDITIONAL EVIDENCES. THEREFORE, AT THIS JUNCTURE, THE ASSESSEE CANNOT TA KE THE PLEA THAT THE DEPOSITS ARE OUT OF SALE OF AGRICULTURAL LAND. HE ACCORDINGLY SUBMITTED THAT THE ORDER OF THE LD.CIT(A) BE UPHELD. 7. I HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS AN ADMITTED FA CT THAT THE ASSESSEE IS NOT A TAX PAYER AND HAS MADE HUGE DEPOSITS IN HER BANK ACCOUNT MAIN TAINED WITH SYNDICATE BANK. THE ABOVE INFORMATION WAS RECEIVED FROM THE CIB KAN PUR. THE ASSESSING OFFICER HAD ITA NO.3817/DEL/2018 11 GIVEN DUE OPPORTUNITY TO THE ASSESSEE TO EXPLAIN TH E SOURCE, BUT, THERE WAS NO COMPLIANCE FOR WHICH THE ASSESSING OFFICER, AFTER R ECORDING THE REASONS AND AFTER OBTAINING DUE PERMISSION FROM THE PR. CIT, MEERUT I SSUED NOTICE U/S 148 OF THE IT ACT. UNDER THESE CIRCUMSTANCES, THE REASSESSMENT PROCEED INGS INITIATED BY THE ASSESSING OFFICER CANNOT BE HELD AS INVALID. THE VARIOUS DEC ISIONS RELIED ON BY THE LD. COUNSEL FOR THE ASSESSEE IN THE INSTANT CASE ARE NOT APPLIC ABLE SINCE IN ALL THOSE CASES EITHER THE ASSESSEES WERE REGULARLY FILING INCOME-TAX RETURNS OR THE REOPENING WAS MADE ON ONE ISSUE AND ADDITION WAS MADE ON SOME OTHER ISSUE. T HEREFORE, THOSE DECISIONS ARE NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. IF THE PLEA OF THE LD. COUNSEL FOR THE ASSESSEE THAT IN CASE OF A NON-FILER OF TAX RETURNS, ASSESSM ENTS CANNOT BE REOPENED ON THE BASIS OF AIR INFORMATION THAT ASSESSEE HAS MADE HUGE CASH DEPOSITS IN THE BANK ACCOUNT IS ACCEPTED, THEN THE PROVISIONS OF SECTION 147 AND 14 8 IN THE STATUTE WILL BECOME REDUNDANT. ACCORDINGLY, THE GROUNDS RELATING TO VA LIDITY OF REASSESSMENT PROCEEDINGS ARE DISMISSED. 8. SO FAR AS THE MERIT OF THE CASE IS CONCERNED, I FIN D THE ASSESSEE ADMITTEDLY DID NOT APPEAR BEFORE THE ASSESSING OFFICER. HOWEVER, BEFORE THE CIT(A) THE ASSESSEE EXPLAINED THE REASONS FOR NON-APPEARANCE WHICH WAS DUE TO DEATH OF THE FATHER OF THE COUNSEL OF THE ASSESSEE. UNDER THESE CIRCUMSTANCES , THE LD.CIT(A) SHOULD HAVE ACCEPTED THE ADDITIONAL EVIDENCES FILED BEFORE HIM SHOWING THAT SUCH DEPOSITS WERE OUT OF SALE OF CERTAIN AGRICULTURAL LANDS ON DIFFERENT DATES AND COULD HAVE OBTAINED A REMAND REPORT FROM THE A.O. SINCE THERE WAS NON-CO MPLIANCE BEFORE THE ASSESSING ITA NO.3817/DEL/2018 12 OFFICER AND LD.CIT(A) DID NOT ACCEPT THE ADDITIONAL EVIDENCES, THEREFORE, CONSIDERING THE TOTALITY OF THE FACTS OF THE CASE AND IN THE IN TEREST OF JUSTICE, I DEEM IT PROPER TO RESTORE THE ISSUE TO THE FILE OF THE ASSESSING OFFI CER WITH A DIRECTION TO GRANT ONE FINAL OPPORTUNITY TO THE ASSESSEE TO SUBSTANTIATE HER CAS E. THE ASSESSEE IS ALSO HEREBY DIRECTED TO APPEAR BEFORE THE ASSESSING OFFICER AND FILE THE NECESSARY DETAILS AND SUBSTANTIATE THE SOURCE OF SUCH BANK DEPOSITS FAILI NG WHICH THE A.O. SHALL PASS APPROPRIATE ORDER. THE ASSESSING OFFICER SHALL DEC IDE THE ISSUE AS PER FACT AND LAW, AFTER GIVING DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. I HOLD AND DIRECT ACCORDINGLY. THE GROUNDS RAISED BY THE ASSESSEE AR E ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSES. 9. IN THE RESULT, THE APPEAL FILED BY THE ASS ESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. THE DECISION WAS PRONOUNCED IN THE OPEN COURT ON 1 2.12.2018. SD/- (R. K. PANDA) ACCOUNTANT MEMF BER DATED: 12 TH DECEMBER, 2018 DK COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASSTT. REGISTRAR, ITAT, NEW DELHI