Case Law Details
Harmeet Singh Vs ITO (ITAT Delhi)
At the time of hearing, Ld. Counsel of the assessee has only argued the legal ground and stated that the reopening action of the AO and confirmation thereof by the Ld. CIT(A) is in violation of mandatory jurisdictional conditions stipulated under the Act. It was further stated that the reopening action of AO u/s. 148 of the Act on non existing basis of cash deposits with Centurian Bank of Punjab which was not proved till passing of final order and an unsubstantiated & vague AIR information is sole basis of entire order. It was further stated that in this case reasons recorded are totally silent on a) contents of information available to Ld AO and b) no details whatsoever of any bank ale are mentioned and c) mere cash deposits is treated to be equivalent to income escaping assessment. It was the further contention that reopening in the case u/s 148 of the Act is without legal and valid mandatory service of notice u/s 148 of the Act. There is no nexus between the prima facie inference arrived in the reasons recorded and information available with the office of the AO. He further stated that the information 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 believe that cash deposits represented income of the assessee. It was the further contention of the Ld. Counsel of the assessee that the proceedings initiated are based on surmises, conjectures and suspicion and therefore, the same are without jurisdiction. He further stated that the reasons recorded are highly vague, far-fetched and cannot by any stretch of imagination lead to conclusion of escapement of income and there are merely presumption in nature. He stated that it is a case of mechanical action on the part of the AO as there is non-application of mind much less independent application of mind so as to show that he formed an opinion based on any material that such deposits represented income.
Ld. DR relied upon the order passed 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 Assessee may be dismissed.
Held by ITAT
There is no nexus between the prima facie inference arrived in the reasons recorded and information; the information 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 believe that cash deposits represented income of the assessee; that the proceedings initiated are based on surmises, conjectures and suspicion and therefore, the same are without jurisdiction; that the reasons recorded are highly vague, far-fetched and cannot by any stretch of imagination lead to conclusion of escapement of income and there 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 application of mind so as to show that he formed an opinion based on any material that such deposits represented income. Keeping in view of the facts and circumstances of the present case and the case law applicable in the case of the assessee, I am of the considered view that the reopening in the case of the assessee for the asstt. Year in dispute is bad in law and deserves to be quashed.
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