Shri Mohammed Nadeer, Lucknow V. Deputy Commissioner of Income Tax, International Taxation Circle, Lucknow

ITA 748/LKW/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 0188 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 7 month(s) 4 day(s)
• Appeal Type: Income Tax (Transfer Pricing) Appeal
• Pronouncement Date: 27-06-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 22-11-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: C K SINGH
• Keywords: Unexplained investment; Business income; Tangible material; Reason to believe; Reassessment proceedings; Set aside
• Section: 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B , LUCKNOW BEFORE SHRI. A. D. JAIN, VICE PRESIDENT AND SHRI T. S. KAPOOR, ACCOUNTANT MEMBER ITA NO. 748/LKW/2018 ASSESSMENT YEAR: 2011 - 12 SHRI MOHD. NADEER PAIKARAMAU BEHTA, LUCKNOW V. DY. CIT INTERNATIONAL TAXATION, CIRCLE LUCKNOW T AN /PAN : AOCPN9719K (APP ELL ANT) (RESPONDENT) APPELLANT BY: SHRI ABHINAV MEHROTRA, ADVOCATE RESPONDENT BY: SHRI C. K. SINGH, D.R. DATE OF HEARING: 25 0 2 201 9 DATE OF PRONOUNCEMENT: 28 0 2 201 9 O R D E R PER A. D. JAIN, V.P . : THIS IS ASSESSEES APPEAL AGAINST THE ORDER OF THE LD. CIT(A) - 2, NO I DA DATED 29/8/2017 FOR ASSESSMENT YEAR 2011 - 12, TAKING THE FOLLOWING GROUNDS OF APPEAL: - 1. BECAUSE, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIO NER OF INCOME TAX (APPEALS) HAS ERRED IN LAW IN PARTLY ALLOWING THE APPEAL OF THE ASSESSEE WHEREAS THE ASSESSMENT ORDER IS ITSELF BAD IN LAW, BEING WITHOUT JURISDICTION SINCE THE NOTICE U/S 148 OF THE ACT, HAS NOT BEEN ISSUED BY AN OFFICER, WHO HAD JURISDI CTION OVER THE ASSESSEE AND HENCE THE ENTIRE PROCEEDING IS BAD IN LAW AND DESERVES TO BE QUASHED. 2. BECAUSE, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW IN PARTLY ALLOWING THE APPEAL OF THE ASSESSEE WHEREAS THE ASSESSMENT ORDER IS ITSELF BAD IN LAW, BEING WITHOUT JURISDICTION ITA NO.748/LKW/2018 PAGE 2 OF 10 SINCE THE ALLEGED NOTICE U/S 143(2) OF THE ACT, IS TIME BARRED AND ALSO BAD IN LAW BEING WITHOUT TERRITORIAL JURISDICTION. 3. BECAUSE, ON THE FACTS AND IN THE CIRC UMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW IN PARTLY ALLOWING THE APPEAL OF THE ASSESSEE WHEREAS THE ASSESSMENT ORDER IS ITSELF BAD IN LAW, BEING WITHOUT JURISDICTION AS THE AS THE REASONS RECORDED FOR RE - OPENING T HE ASSESSMENT U/S 148 OF THE INCOME TAX ACT DO NOT MEET THE REQUIREMENT OF LAW AND ARE NOT PROPER REASONS WHICH GIVE JURISDICTION TO THE ASSESSING OFFICER TO RE - OPEN THE ASSESSMENT, HENCE THE ORDER OF ASSESSMENT IS BEING WITHOUT JURISDICTION AND DESERVES T O BE QUASHED . 4. BECAUSE, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW IN FAILING TO QUASH THE ASSESSMENT ORDER ITSELF AS THE ENTIRE PROCEEDINGS INITIATED BY THE ASSESSING OFFICER TAKING RECOURSE TO THE PROVISIONS OF SECTION 147 OF THE INCOME TAX ACT ARE WITHOUT JURISDICTION AND BAD IN LAW. THE REASONS RECORDED ARE FACTUALLY INCORRECT. NO QUERY LETTER/NOTICE WAS EVER SERVED ON THE ASSESSEE AND HENCE THE AVERMENTS IN THE STATEMENT OF REASO NS ARE FACTUALLY INCORRECT. 5. BECAUSE, THE IMPUGNED REASSESSMENT PROCEEDINGS ARE BAD IN LAW, AS THE SAME HAVE BEEN INITIATED ON INCORRECT FACTS AND WITHOUT THERE BEING ANY 'FRESH TANGIBLE MATERIAL' IN THE POSSESSION OF REVENUE TO ENABLE IT TO FORMULATE AN HONEST BELIEF THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. 6. BECAUSE, THE IMPUGNED REASSESSMENT PROCEEDINGS ARE FURTHER BAD IN LAW, BEING AN ILLEGAL ATTEMPT BY THE RESPONDENT TO CAUSE CERTAIN VERIFICATIONS AND CAUSE ROVING OR FISHING ENQUIRIE S IN THE GUISE OF REASSESSMENT PROCEEDINGS. SOME STATEMENT IN THE FORM A REPORT CANNOT CONSTITUTE REASONS TO BELIEVE. 7. BECAUSE, BEFORE ISSUING A NOTICE UNDER SECTION 148 OF THE ACT, IT IS A SINE - QUA - NON THAT THE ASSESSING OFFICER MUST HAVE 'REASON TO BE LIEVE' THAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. SUCH 'REASON TO BELIEVE' CANNOT BE A REASON TO MERELY SUSPECT. THERE MUST BE A DIRECT NEXUS BETWEEN THE MATERIAL COMING TO THE NOTICE OF THE ASSESSING OFFICER AND THE ITA NO.748/LKW/2018 PAGE 3 OF 10 FORMATION OF THE BELIEF THAT THERE HAS BEEN ESCAPEMENT OF INCOME OF THE ASSESSEE FROM TAXATION IN A PARTICULAR YEAR. THE RELEVANT MATERIAL, NECESSARY FOR FORMATION OF BELIEF MUST BE RELEVANT AND NOT VAGUE OR FICTITIOUS. THEREFORE, TO CONSTITUTE A VALID 'REASON TO BELIEVE' THERE M UST BE SOME 'NEW TANGIBLE MATERIAL' COMING TO THE POSSESSION OF REVENUE, IN ORDER TO TRIGGER THE ASSESSING OFFICER TO INITIATE ACTION. THIS REQUIREMENT OF LAW IS ABSENT IN THE INSTANT CASE AND HENCE THE PROCEEDINGS ARE LIABLE TO BE QUASHED. 8. BECAUSE, TH E IMPUGNED REASSESSMENT PROCEEDINGS ARE FURTHER BAD IN LAW, AS THE SAME HAVE BEEN INITIATED IN VIOLATION TO PROVISIONS OF SECTION 147,149 & 151 OF THE INCOME TAX ACT AND ARE HENCE LIABLE TO BE QUASHED, PER - SE. 9 . BECAUSE THE HON'BLE SUPREME COURT IN THE D ECISION IN M/S GANGA SARAN & SONS (P) LTD V. ITO (130 ITR 1) HAS HELD THAT THE EXPRESSION 'REASON TO BELIEVE' AS OCCURRING IN SECTION 147 'IS STRONGER' THAN THE EXPRESSION 'IS SATISFIED' AND THESE REQUIREMENTS HAVE NOT BEEN MET IN THE INSTANT CASE AS THERE IS NO TANGIBLE MATERIAL. IT IS MOST RESPECTFULLY SUBMITTED THAT THE RECORDED REASONS DO NOT REFLECT ANY APPLICATION OF MIND BY THE RESPONDENT OR DEMONSTRATE THAT EVEN REMOTELY THERE IS ANY SUGGESTION OF ANY INCOME GETTING ESCAPED FROM BEING TAXED, IT MERE LY SUGGESTS THAT SOME MORE ENQUIRY IS REQUIRED TO BE MADE. 10. BECAUSE, WHOLLY WITHOUT PREJUDICE TO THE AFOREMENTIONED GROUNDS OF APPEAL, THE ADDITION SUSTAINED BY THE LD. CIT(A) FOR RS.12,80, 000 / - IS BAD IN LAW, PARTICULARLY WHEN THE LD. CIT(A) GRANTS PA RTIAL RELIEF TO THE ASSESSEE BY ACCEPTING THE EXPLANATION FURNISHED BY THE ASSESSEE. IT IS SETTLED THAT EXPLANATION CAN EITHER BE ACCEPTED OR REJECTED, WHOLLY. ADDITION OF RS. 12,80.000/ - 11. BECAUSE, WHOLLY WITHOUT PREJUDICE TO THE AFOREMENTIONED GROUNDS OF APPEAL ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW IN FAILING TO APPLY A UNIFORM RATE OF NET PROFIT TO THE BUSINESS RECEIPT EARNED BY THE ASSESSEE, WHENCE IT IS ACCEPTED AND ADMITTED T HAT THE ASSESSEE IS IN THE BUSINESS OF PROPERTY DEALING. ITA NO.748/LKW/2018 PAGE 4 OF 10 12. BECAUSE, WHOLLY WITHOUT PREJUDICE TO THE AFOREMENTIONED GROUNDS OF APPEAL ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD, COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW IN FAIL ING TO CONFIRM THE PEAK CASH CREDIT AS UNEXPLAINED INVESTMENT IN THE HANDS OF THE ASSESSEE. 13 . BECAUSE, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS FURTHER ERRED IN LAW IN REFUSING THE PAY CREDENCE TO THE EXPLANATION FURNISHED BY THE ASSESSEE IN RELATION TO THE DIFFERENT ENTRIES APPEARING IN THE BANK ACCOUNT OF THE ASSESSEE AND FURTHER FAILING TO PLACE RELIANCE ON ITS RETURN OF INCOME. 14 . BECAUSE, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE T HE ORDER PASSED BY THE AUTHORITIES BELOW IS OTHERWISE IS UNSUSTAINABLE IN LAW AND LIABLE TO BE QUASHED. 15. BECAUSE, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT (A) HAS PASSED THE ORDER WITHOUT PROVIDING THE ASSESS E E WITH A DUE AND PROPER O PPORTUNITY OF HEARING AND THEREFORE THE IMPUGNED ORDER DESERVES TO BE SET ASIDE BEING BAD IN LAW. 2 . AT THE OUTSET, THE LD. A.R. OF THE ASSESSEE STATES AT THE B AR THAT HE DOES NOT WISH TO PRESS GROUND NOS.1 AND 2. REJECTED AS NOT PRESSED. 3 . APROPOS GROUND NO. 3, THE ASSESSING OFFICER RECORDED THE FOLLOWING REASONS TO BELIEVE ESCAPEMENT OF INCOME: - 'AS PER AIR INFORMATION SHRI MOHD. NADEER S/O PEER GHULAM, PAIGRAMAU BEHTA , LUCKNOW DEPOSITED RS. 22,95, 000 / - IN CASH DURING F.Y.2010 - 11. QUERY NOTICE WAS SENT TO THE ASSESSEE FOR REQUIRING HIM TO FURNISH THE DETAILS OF THE ABOVE DEPOSITED THE AMOUNT IN CASH IN HIS BANK IN COMPLIANCE TO THIS NOTICE ASSESSEE DID NOT ATTENDED THE OFFICE NOR FILED ANY SUBMISSION IN THIS REGARD. IN VIEW OF THE ABOVE FACT , I HAVE REASON TO B ELIEVE THAT RS. 22,95,000 / - HAS ESCAPED ASSESSMENT FOR A.Y. 2011 - 12, ISSUE NOTICE U/S 148 OF IT ACT, 1961.' ITA NO.748/LKW/2018 PAGE 5 OF 10 4 . THE LD. COUNSEL FOR THE ASSESSEE HAS CONTENDED THAT THE AO HAD NO MATERIAL TO FORM REASON OF BELIEF OF ESCAPEMENT OF INCOME AND SO, THE NOTICE ISSUED U/S 148 OF THE I.T. ACT AND THE PROCEEDINGS PURSUANT THERETO ARE BAD IN LAW; THAT IT IS A CASE OF A ROVING AND FISHING ENQUIRY, WHICH IS NOT PERMISSIBLE IN LAW; THAT MERELY ON THE BASIS OF AIR INFORMATION, IT CANNOT BE CONCLUDED THAT THERE IS ESCAPEMENT O F INCOME. 5 . ON THE OTHER HAND, THE LD. DR HAS CONTENDED THAT IT WAS THE AIR INFORMATION, WHICH FORMED THE BASIS OF THE AOS BELIEF OF ESCAPEMENT OF INCOME OF THE ASSESSEE, AMOUNTING TO RS.22,95,000/ - , REPRESENTING CASH DEPOSIT IN THE BANK ACCOUNT OF THE ASS ESSEE; THAT THE SOURCE OF SUCH DEPOSITS, WAS NOT EXPLAINED; THAT THEREFORE, THE AOS FORMATION OF BELIEF OF ESCAPEMENT OF INCOME IS JUSTIFIED; AND THAT THE AO WAS, AS SUCH, CORRECT IN ISSUING THE NOTICE U/S 148 OF THE ACT TO THE ASSESSEE. 6 . HEARD. THE FACTS ARE NOT DISPUTED. A BARE PERUSAL OF THE REASONS RECORDED FOR ISSUANCE OF NOTICE U/S 148 OF THE ACT, SHOWS THAT THE ONLY MATERIAL AVAILABLE BEFORE THE AO WAS THE AIR INFORMATION OF THE ASSESSEE HAVING DEPOSITED AN AMOUNT OF RS.22,95,000/ - IN HIS BANK ACCOUN T. THE ASSESSEE WAS ISSUED A NOTICE U/S 148 OF THE ACT IN PURSUANCE TO THE AFORESAID REASONS. IN BIR BAHADUR SINGH SIJWALI VS. ITO, WARD - 1, HALDWANI 53 TAXMAN.COM 366 (DEL. - TRIB), LIKE IN THE PRESENT CASE, THE REASONS RECORDED INDICATED THAT CASH DEPO SITS HAD BEEN MADE IN THE BANK ACCOUNT OF THE ASSESSEE. THE TRIBUNAL HELD THAT THE MERE FACTUM OF DEPOSITS HAVING BEEN MADE IN A BANK ACCOUNT DOES NOT INDICATE THAT THESE DEPOSITS CONSTITUTE AN INCOME WHICH HAS ESCAPED ASSESSMENT. IT WAS OBSERVED THAT THE REASONS RECORDED DID NOT MAKE OUT A CASE THAT THE ASSESSEE WAS ENGAGED IN SOME BUSINESS AND THE INCOME FROM SUCH A BUSINESS HAD NOT BEEN RETURNED BY THE ASSESSEE. IN THE CASE AT HAND ALSO, THE REASONS RECORDED DO NOT CONTAIN ANY SUCH ITA NO.748/LKW/2018 PAGE 6 OF 10 RECITAL. THE TRIBUNAL HELD THAT THE FACTUM PER SE, OF DEPOSITS IN THE BANK ACCOUNT OF THE ASSESSEE COULD NOT BE MADE THE BASIS FOR HOLDING THE VIEW THAT INCOME HAD ESCAPED ASSESSMENT, OVER - LOOKING THAT THE SOURCES OF THE DEPOSITS NEED NOT NECESSARILY BE THE INCOME OF THE ASSESS EE; AND THAT AS SUCH, THE REASONS RECORDED WERE NOT SUFFICIENT TO BELIEVE ESCAPEMENT OF INCOME; THAT RATHER, THEY WERE REASONS TO SUSPECT ESCAPEMENT OF INCOME, WHICH WAS NOT ENOUGH FOR ISSUANCE OF A NOTICE U/S 148 OF THE ACT. 7 . SIJWALI (SUPRA) HAS BEEN F OLLOWED IN SH. ASHWANI KUMAR VS. ITO, ORDER DATED 23.02.2016, PASSED BY THE ITAT, AMRITSAR (SMC), IN ITA NO. 129(ASR)/2015, FOR A.Y. 2005 - 06 AND IN KRISHNA KUMAR TRIPATHI VS. ITO, ORDER DATED 31.7.2017, PASSED BY THE ITAT, AGRA (SMC), IN ITA NO. 87/AGR A/2016, FOR A.Y. 2011 - 12. 8 . SIJWALI (SUPRA) WAS ALSO FOLLOWED IN SH. AMRIK SINGH VS. ITO, ORDER DATED 11.05.2016, PASSED BY THE ITAT, AMRITSAR (SMC) IN ITA NO.630(ASR)/2015, FOR A.Y. 2006 - 07, TO HOLD, INTERALIA AS FOLLOWS: - 45. IN BIR BAHADUR SINGH SI JWALI (SUPRA), IT HAS BEEN HELD THAT WHERE THE AO ISSUED A NOTICE U/S 148 ON THE GROUND THAT THERE WAS AN ESCAPEMENT OF INCOME AND THE BELIEF REGARDING SUCH ESCAPEMENT OF INCOME WAS FORMED ON THE FALLACIOUS ASSUMPTION OF THE AO THAT BANK DEPOSITS CONSTITU TED UNDISCLOSED INCOME, OVER - LOOKING THE FACT THAT THE SOURCE OF THE DEPOSITS NEED NOT NECESSARILY BE THE INCOME OF THE ASSESSEE, THE REASSESSMENT PROCEEDINGS CANNOT BE SUSTAINED. IN THE PRESENT CASE, SIMILARLY, THE BASIS OF INITIATION OF THE ASSESSMENT PR OCEEDINGS U/S 147 WAS THE INFORMATION WITH THE DEPARTMENT, OF THE DEPOSITS MADE BY THE ASSESSEE IN HIS BANK ACCOUNT. 46. BIR BAHADUR SINGH SIJWALI (SUPRA), MAKES REFERENCE TO HINDUSAN LEVER LTD. VS. R.B. WADKAR, 268 ITR 332 (BOM.), TO HOLD THAT THE REA SONS RECORDED FOR REOPENING THE ASSESSMENT ARE TO BE EXAMINED ON A STANDALONE BASIS AND NOTHING CAN BE ADDED TO THE REASONS. IT WAS ALSO OBSERVED THAT THE REASONS MUST POINT ITA NO.748/LKW/2018 PAGE 7 OF 10 OUT TO AN INCOME ESCAPING ASSESSMENT AND NOT MERELY NEED OF AN ENQUIRY WHICH MAY R ESULT IN DETECTION OF AN INCOME ESCAPING ASSESSMENT. IT WAS OBSERVED THAT IT IS NECESSARY THAT THERE MUST BE SOMETHING WHICH INDICATES, EVEN IF IT DOES NOT ESTABLISH, THE ESCAPEMENT OF INCOME FROM ASSESSMENT; THAT IT IS ONLY ON THAT BASIS THAT THE AO CAN F ORM A PRIMA - FACIE BELIEF THAT AN INCOME HAS ESCAPED ASSESSMENT; THAT MERELY BECAUSE SOME FURTHER INVESTIGATIONS HAVE NOT BEEN CARRIED OUT, WHICH, IF MADE, COULD HAVE LED TO DETECTION OF AN INCOME ESCAPING ASSESSMENT, THIS CAN NOT BE REASON ENOUGH TO HOLD T HE VIEW THAT THE INCOME HAS ESCAPED ASSESSMENT; AND THAT THERE HAS TO BE SOME KIND OF CAUSE AND EFFECT OF RELATIONSHIP BETWEEN THE REASONS RECORDED AND THE INCOME ESCAPING ASSESSMENT. THE OBSERVATIONS OF THE HONBLE SUPREME COURT IN THE CASE OF ITO VS. LA KHMANI MEWAL DAS, 103 ITR 437 (SC), WERE REPRODUCED, 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 THERE MUST BE A DIRECT N EXUS OR LIVE LINK BETWEEN THE MATERIAL COMING TO THE NOTICE OF THE ITO AND THE FORMATION OF THIS BELIEF THAT THERE HAS BEEN ESCAPEMENT OF THE INCOME OF THE ASSESSEE FROM ASSESSMENT IN THE PARTICULAR YEAR BECAUSE OF HIS FAILURE TO DISCLOSE FULLY AND TRULY A LL MATERIAL FACTS. IT IS NO DOUBT TRUE THAT THE COURT CANNOT GO INTO SUFFICIENCY OR ADEQUACY OF THE MATERIAL AND SUBSTITUTE ITS OWN OPINION FOR THAT OF THE ITO ON THE POINT AS TO WHETHER 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, WHICH WOULD WARRANT THE FORMATION OF THE BELIEF RELATING TO ESCAPEMENT 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 CASE BEFORE US. ALL THAT THE REASONS RECORDED FOR REOPENING INDICATE IS THAT CASH DEPOSITS AGGREGATING TO RS.10,24,100/ - HAVE BEEN MADE IN THE BANK ACCOUNT OF THE ASSESSEE, BUT THE MERE FACT THAT THESE DEPOSITS HAVE BEEN ITA NO.748/LKW/2018 PAGE 8 OF 10 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 OUT A CA SE THAT THE ASSESSEE WAS ENGAGED IN SOME BUSINESS AND THE INCOME FROM SUCH A BUSINESS HAS NOT BEEN RETURNED BY THE ASSESSEE. AS WE DO NOT HAVE THE LIBERTY TO EXAMINE THESE REASONS ON THE BASIS OF ANY OTHER MATERIAL OR FACT, OTHER THAN THE FACTS SET OUT IN THE REASONS SO RECORDED, IT IS NOT OPEN TO US TO DEAL WITH THE QUESTION AS TO WHETHER THE ASSESSEE COULD BE SAID TO BE ENGAGED IN ANY BUSINESS; ALL THAT IS TO BE EXAMINED IS WHETHER THE FACT OF THE DEPOSITS, PER SE, IN THE BANK ACCOUNT OF THE ASSESSEE COUL D BE BASIS OF HOLDING THE VIEW THAT THE INCOME HAS ESCAPED ASSESSMENT. THE ANSWER, IN OUR HUMBLE UNDERSTANDING, IS IN NEGATIVE. THE ASSESSING OFFICER HAS OPINED THAT AN INCOME OF RS.10,24,100/ - HAS ESCAPED ASSESSMENT OF INCOME BECAUSE THE ASSESSEE HAS RS.1 0,24,100/ - IN HIS BANK ACCOUNT BUT THEN SUCH AN OPINION PROCEEDS ON THE FALLACIOUS ASSUMPTION THAT THE BANK DEPOSITS CONSTITUTE UNDISCLOSED INCOME, AND OVERLOOKS THE FACT THAT THE SOURCES OF DEPOSIT NEED NOT NECESSARILY BE INCOME OF THE ASSESSEE. OF COURSE , IT MAY BE DESIRABLE, FROM THE POINT OF VIEW OF REVENUE AUTHORITIES, 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 ASSESSMENT. 48.THE TRIBUNAL CONCLUDED THUS: BUT THEN IN THE CASE BEFORE US THE ONLY REASON FOR REASSESSMENT PROCEEDINGS WAS THE FACT OF DEPOSIT OF BANK ACCOUNT WHICH BY ITSELF DOES NOT LEAD TO INCOME BEING TAXED IN THE HANDS OF THE ASSESSEE. LEARNED DEPARTMENTAL REPRESENTATIVE HAS REFERRED TO SEVERAL OTHER JUDICIAL PRECEDENTS IN SUPPORT OF THE PROPOSITION THAT AT THE STAGE OF INITIATION OF REASSESSMENT PROCEEDINGS, ALL THAT IS TO BE SEEN IS EXIS TENCE, RATHER THAN ADEQUACY, OF THE MATERIAL TO COME TO THE CONCLUSION THAT INCOME HAS ESCAPED ASSESSMENT. THERE CANNOT BE ANY, AND THERE IS NO, DOUBT ON THE CORRECTNESS OF ITA NO.748/LKW/2018 PAGE 9 OF 10 THIS PROPOSITION BUT THEN, AS WE HAVE ELABORATELY EXPLAINED EARLIER IN THIS ORDER, THE MATERIAL MUST INDICATE INCOME ESCAPING ASSESSMENT RATHER THAN DESIRABILITY OF FURTHER PROBE IN THE MATTER WHICH MAY OR MAY NOT LEAD TO INCOME ESCAPING THE ASSESSMENT, IN OUR HUMBLE UNDERSTANDING, CANNOT BE DRAWN. 49. NOW, IN KEEPING WITH BIR BAHADUR SINGH SIJWALI (SUPRA), THIS INFORMATION CANNOT FORM A VALID BASIS FOR INITIATING ASSESSMENT PROCEEDINGS UNDER SECTION 147 OF THE I.T. ACT. AS OBSERVED IN BIR BAHADUR SINGH SIJWALI (SUPRA), THE MERE FACT THAT THE DEPOSITS HAD BEEN MADE IN THE BANK ACCOUN T DOES NOT INDICATE THAT THESE DEPOSITS CONSTITUTE INCOME WHICH HAS ESCAPED ASSESSMENT. 50.THUS, IT WAS A MERE SUSPICION OF THE AO, THAT PROMPTED HIM TO INITIATE ASSESSMENT PROCEEDINGS UNDER SECTION 147, WHICH IS NEITHER COUNTENANCED, NOR SUSTAINABLE IN LA W. TOO, THE AO PROCEEDED ON THE FALLACIOUS ASSUMPTION THAT THE BANK DEPOSITS CONSTITUTED 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 BAHAD UR SINGH SIJWALI (SUPRA), THE REASONS RECORDED TO INITIATE ASSESSMENT PROCEEDINGS UNDER SECTION 147 OF THE ACT AND ALL PROCEEDINGS PURSUANT THERETO, CULMINATING IN THE IMPUGNED ORDER, ARE CANCELLED. GROUND NO.2 IS, ACCORDINGLY, ACCEPTED. 9 . SIJWALI (SUPR A) AND AMRIK SINGH (SUPRA) WERE FOLLOWED IN MUNNI DEVI VS. ITO, ORDER DATED15.09.2016, PASSED BY THE ITAT, DELHI (SMC), IN ITA NO.3534/DEL/2014, FOR A.Y. 2007 - 08, HARMEET SINGH VS. ITO, ORDER DATED 10.02.2017 PASSED BY THE ITAT, DELHI (SMC), IN ITA NO. 1939/DEL/2016 FOR A.Y. 2008 - 09 AND RAVINDER DEO TYAGI VS. INCOME TAX OFFICER, ORDER DATED 30/11/2018, PASSED BY THE LUCKNOW (SMC) BENCH, IN ITA NOS. 123 TO 125/LKW/2017, FOR ASSESSMENT YEARS 2010 - 11 TO 2012 - 13. 10 . NO DECISION CONTRARY TO THE ABOVE DECISIO NS HAS BEEN CITED BEFORE US. ITA NO.748/LKW/2018 PAGE 10 OF 10 11 . IN VIEW OF THE ABOVE, FINDING MERIT IN THE GRIEVANCE RAISED BY THE ASSESSEE, THE REASONS RECORDED BY THE AO FOR ISSUANCE OF NOTICE U/S 148 OF THE ACT ARE HELD TO BE INVALID, BEING REASONS NOT SUFFICIENT TO FORM BELIEF OF ESCAPE MENT OF INCOME, BASED ON VAGUE INFORMATION. ALL PROCEEDINGS PURSUANT THERETO, INCLUDING THE NOTICE ISSUED UNDER SECTION 148 OF THE I.T. ACT, THE ASSESSMENT ORDER AND THE IMPUGNED ORDER ARE THUS ANNULLED AND CANCELLED. NO OTHER ISSUE SURVIVES FOR ADJUDICATI ON, NOR WAS ANYTHING ELSE ARGUED. 12 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 28 / 02 /201 9 . SD/ - SD/ - [ T. S. KAPOOR ] [ A. D. JAIN ] ACCOUNTANT MEMBER VICE PRESIDENT DATED: 28 TH FEBRUARY , 201 9 JJ: 2 502 COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR BY ORDER ASSISTANT REGISTRAR