Smt. Sapna Chauhan Vs ITO (ITAT Agra)
It is settled position in law that the question of Jurisdiction is not a matter of acquiescence. The proprietary of Notice under section 148, based upon ‘reasons recorded’ is not dependent upon the objection or no objection by the assessee at the stage of assessment. If the Reasons recorded, independently can withstand the test of judicial scrutiny, only such reasons will confer jurisdiction to issue Notice and frame assessment in pursuance thereto. However, if the reasons recorded, upon being challenged at any stage of proceedings fails to withstand the test of judicial scrutiny, in that eventuality, upon such recorded reason no valid Notice can be issued and any assessment framed consequent thereto even taking shelter of ‘No objection’ from the assessee could save the assessment from being held to be declared void-ab-intio. In this background of the case the objection raised by the Ld. Sr. D.R is rejected being devoid of substance.
From the perusal of the reasons recorded it is evident that escapement is assumed on account of alleged non furnishing of sources of investment in policy premiums of Birla Sun Life Insurance Co. Limited , which was allegedly questioned vide Letter dated 14.08.2015. Letter dated 14.08.2015 has been filed which was issued under section 133(6) of the Act (APB-1 7) which nowhere requires the assessee to prove the sources of investment in premiums paid against policy of Birla SunlifeInsurance. Vide this notice the learned Assessing officer has only called upon the assessee to furnish year wise and policy wise break up of premiums paid against policy of Birla Sunlife Insurance. In fact this notice refers to a notice dated 05.06.2015 which was issued by the learned Assessing officer in past and remained non-complied with. Copy of notice dated 05.06.2015 is also placed in paper book (APB-1 6) evenin this notice assessee was only required to furnish year wise and policy wise break up of premiums paid against policy of Birla Sunlife Insurance. Therefore, it is clear that assumption of jurisdiction based on the reasons that assessee was asked to explain the source of investment vide letter dated 14.08.2015 and he has not furnished the sources of investment leading to formation of satisfaction regarding escapement of income is found to be wrong, which seriously prejudices the validity of reasons recorded.
Fact of investment in premium paid is akin to cash deposits in saving bank account as both being Investment and are assessable under section 69 of the Act, and such fact alone cannot be a reason for ‘escapement of income’ and to clothe the learned Assessing officer with jurisdiction to issue notice under section 148 of the Act.
The text of the reasons recorded do proves that virtually there has been no application of mind by the learned Assessing officer so as to form ‘satisfaction’ that any income has escaped assessment. The text of the reasons recorded do virtually proves that the reasons recorded in the case in hands are no reasons in the eye of law. The so called ‘reasons’ instead of being ‘reasons to believe’ are solely ‘reasons to suspect’. The investment in premium paid need not necessarily come from the income. It may be out of past savings, loans, gifts, liquidation of investment or sale of another property etc. Notice under section 148 cannot be issued for verification of information, but here the jurisdictional satisfaction of the essential requirement has to be shown that there has been ‘reason to believe’ that there was income ‘chargeable to tax’. The ‘reasons’ recorded by the learned Assessing officer should speak his mind and the basis for coming to conclusion that investment in premiums had been sourced from income, which should have been disclosed and had not been shown therefore, there was escapement of income. There must be direct nexus between the material and belief of escapement. This mental exercise must be self-evident from the reasons recorded. Reasons must be self-speaking and self-defending. The purported reasons do not show any such exercise by the learned Assessing officer and hence he wrongly acquired the jurisdiction in the matter.
In view of the reasons as above andfactual matrix of the case, we are of the considered view that the reasons recorded by the Assessing officer, are no reasons in the eye of law for assuming jurisdiction in this case.
