S. Gurdev Singh, Ludhiana V. ITO, W-6(5), Ludhiana

ITA 706/CHANDI/2019

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 9137 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 year(s) 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-08-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 07-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Source of fund; Set aside
• Section: 148

Judgement Text

आयकर अपीलȣय अͬधकरण,चÖडीगढ़ Ûयायपीठ “एकल” चÖडीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “SMC” CHANDIGARH Įी संजय गग[, ÛयाǓयक सदèय BEFORE: SH. SANJAY GARG, JUDICIAL MEMBER आयकर अपील सं./ ITA No.706/CHD/2019 Ǔनधा[रण वष[ / Assessment Year : 2011-12 S.Gurdev Singh, S/o Shri Dharam Singh, 100-C, B.R.S. Nagar, Ludhiana. बनाम The ITO, Ward-6(5), Ludhiana. èथायी लेखा सं./PAN NO: AFIPS7534Q अपीलाथȸ/Appellant Ĥ×यथȸ/Respondent Ǔनधा[ǐरती कȧ ओर से/Assessee by : Shri Parikshit Aggarwal, CA राजèव कȧ ओर से/ Revenue by : Smt. Amanpreet Kaur, Sr.DR स ु नवाई कȧ तारȣख/Date of Hearing : 08.08.2022 उदघोषणा कȧ तारȣख/Date of Pronouncement : 08.08.2022 आदेश/ORDER The present appeal has been preferred by the assessee against the order dated 25.03.2019 of the Commissioner of Income Tax (Appeals)-3, Chandigarh [hereinafter referred to as ‘the CIT(A) ] pertaining to 2011-12 assessment year. The assessee in this appeal has taken following grounds of appeal : 1. That the Learned Commissioner of Income Tax (Appeals)-3, Ludhiana has erred in upheld the order passed by the learned Assessing Officer as the notice issued u/s 148 of the Income Tax Act, 1961 is without Jurisdiction and illegal and has been issued in the status of HUF. That the Learned Assessing Officer has admitted in his Assessment Order that notice issued is illegal, without jurisdiction and Bad in the Eyes of Law. Therefore, assessment framed by the Learned Assessing ITA-706/CHD/2019 A.Y. 2011-12 Page 2 of 6 Officer and Assessment Order upheld by the Learned Commissioner of Income Tax(Appeals)-3, Ludhiana is illegal and bad in the Eyes of Law. 2. That the Learned Commissioner of Income Tax (Appeals)-3, Ludhiana has erred in upheld the order passed by the learned Assessing Officer as notice u/s 148 or of the Income Tax Act, 1961 issue on the reasons recorded at the time of N.A. reopening of case, whereas the assessment framed is beyond the reasons recorded at the time of re- opening of case. Therefore assessment framed by the Learned Assessing Officer and Assessment Order upheld by the Learned Commissioner of Income Tax(Appeals)-3, Ludhiana is illegal and bad in the Eyes of Law. 3. That the Learned Commissioner of Income Tax (Appeals)-3, Ludhiana has erred the confirming the addition of Rs. 13,71,000/- on account of Cash Deposited in Savings Account with Capital Local Area Bank Limited without considering the submissions made by the assessee during the assessment proceedings. However, source of cash deposited by the assessee was duly explained to the Assessing Officer Vide his Letter Dated 26/11/2018. Therefore, addition of Rs.13,71,000/- made by the Learned Assessing Officer and Confirmed by the Learned Commissioner of Income Tax (Appeals)-3, Ludhiana is Illegal, Unwarranted, Uncalled for and needs to be deleted. 4. That the Learned Commissioner of Income Tax (Appeals)-3, Ludhiana has erred the confirming the addition of Rs.3,00,000/- on account of Investment made in Reliance Mutual Funds, without any basis and without mentioned any reasons in his order. Therefore, addition of Rs.3,00,000/- made by the Learned Assessing Officer and Confirmed by the Learned Commissioner of Income Tax (Appeals)-3, Ludhiana is Illegal, Unwarranted, Uncalled for and needs to be deleted. 5. That the Learned Commissioner of Income Tax (Appeals)-3, Ludhiana has erred the confirming the addition of Rs. 2,50,000/- on account of Cash deposited in Punjab and Sind Bank, whereas source of cash deposited by the assessee was duly explained by the assessee during the course of assessment proceedings. Therefore, addition of Rs.2,50,000/- made by the Learned Assessing Officer and Confirmed by the Learned Commissioner of Income Tax (Appeals)-3, Ludhiana is Illegal, Unwarranted, Uncalled for and needs to be deleted.” 2. The assessee through the above grounds of appeal inter-alia has contested the validity of the re-opening of the assessment u/s 147 read with 148 of the Income Tax Act, 1961 ( hereinafter referred to as ‘the Act’). ITA-706/CHD/2019 A.Y. 2011-12 Page 3 of 6 3. At the outset, the ld. counsel for the assessee has invited my attention to page 34 of the Paper Book which is the copy of the reasons recorded by the Assessing Officer (in short “the AO”) for re-opening of the assessment. The ld. counsel for the assessee has pointed out that there were no sufficient reasons for the AO to form the belief that the income of the assessee has escaped assessment. He, in this respect has pointed out that in para 1 of the reasons recorded wherein the AO has pointed out “this is a case of HUF”. The ld. counsel for the assessee has submitted that whereas the assessee is an ‘individual’, the ld. counsel has further pointed out that the sole reason for the AO to suspect that the income of the assessee has escaped assessment was that there were cash deposits in the bank account of the assessee of Rs.13,71,000/- and further a term deposit of Rs.5,00,000/- with UCO Bank and that since the assessee had not filed the return of income for the assessment year under consideration i.e. assessment year 2011-12, hence it could not be gathered by the A.O that the abovesaid transactions were made from his disclosed sources of income. The AO has also based his suspicion on the ground that though the assessee had filed all Income Tax Returns for other assessment years except the relevant assessment year 2011-12, therefore, the AO formed the belief that the aforesaid deposits were out of the income of the assessee which had escaped assessment. The ld. counsel has invited my attention to page 36 ITA-706/CHD/2019 A.Y. 2011-12 Page 4 of 6 of the Paper Book which is copy of acknowledgement of the Income Tax Return filed for assessment year 2011-12. The ld. counsel for the assessee has submitted that the re-opening in this case has been made on the basis of mere suspicion which was based on wrong assumption of fact that the assessee did not file the return for assessment year 2011-12 whereas the assessee had duly filed his return for assessment year 2011-12. The ld. counsel, therefore, has submitted that the re-opening in this case has been done in a mechanical manner and on the basis of wrong assumption of the facts. 4. The ld. DR, on the other hand has submitted that so far as the mentioning of the words “that the present is a case of a HUF” is concerned, that is a typographical mistake on the part of the AO, however, the notice has been issued in the name of the assessee as “individual’. So far as the observation that the assessee did not file his return of income for the year under consideration, the ld. DR in this respect has submitted that as per the information available to the AO at that time, it was not found from the record that the assessee had not filed any return for the said year. 5. I have considered the rival submissions of the ld. representatives of the parties. It has been time and again held that for the re-opening of the assessment by the AO, there must ITA-706/CHD/2019 A.Y. 2011-12 Page 5 of 6 be reasons to believe that the income of that year has escaped assessment. The reasons to believe cannot be construed as “reasons to suspect”. In the case in hand, there was no convincing information or material available to the AO to form the belief that any income of the assessee has escaped assessment. The only information available to the AO was that there were certain deposits in the bank account of the assessee. It had also been held time and again by various Courts that mere deposit in the bank account itself would not construe an information to believe that the same are out of unaccounted income of the assessee. The AO suspected that the income of the assessee has escaped assessment on the ground that the assessee did not file return of income for the assessment year under consideration whereas he had had filed all his returns relating to other assessment years. He, therefore, suspected that income of the assessee in respect of the aforesaid year had escaped assessment. However, as pointed out by the ld. AR, the assessee had duly filed his return of income for the assessment year under consideration, therefore, the AO formed the belief of the escapement of income on wrong facts and that too on the basis of mere suspicion which cannot take place of “reasons to believe’. In view of this, the re- opening of the assessment is held bad in law and the same is quashed. The consequential additions made in the re-assessment order are, therefore set aside. ITA-706/CHD/2019 A.Y. 2011-12 Page 6 of 6 6. In the result, the appeal of the assessee stands allowed. Order pronounced on 08 th August, 2022. Sd/- ( संजय गग[) (SANJAY GARG ) ÛयाǓयक सदèय/ Judicial Member “Poonam” आदेश कȧ ĤǓतͧलͪप अĒेͪषत/ Copy of the order forwarded to : 1. अपीलाथȸ/ The Appellant 2. Ĥ×यथȸ/ The Respondent 3. आयकर आय ु Èत/ CIT 4. आयकर आय ु Èत (अपील)/ The CIT(A) 5. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय आͬधकरण, चÖडीगढ़/ DR, ITAT, CHANDIGARH 6. गाड[ फाईल/ Guard File