Case Law Details
M.R. Enterprises Vs ITO (ITAT Delhi)
Admittedly, in the present case the assessment was reopened on the basis of cash deposited in the bank account and no addition has been made by the Assessing Officer regarding deposit of this amount. It is seen that the assessee has not raised this issue before the learned CIT(Appeals). However, this being a legal ground which goes to the very root of the jurisdiction, therefore, same is admitted and is being adjudicated. I have considered the objections of the assessee regarding framing of the assessment qua the issue other than the issue for which the assessment was reopened. There is no dispute that the assessee had made cash deposits in the bank account. It is categorically recorded by the Assessing Officer that no income-tax return was filed by the assessee. Therefore, at the time of reopening there was no explanation regarding source of cash deposits by the assessee. In my considered view it was sufficient for the Assessing Officer to form a belief that the income chargeable to tax has escaped assessment. Hence, he was justified to reopen the assessment u/s 147 of the Act.
After reopening of assessment, the Assessing Officer can in his wisdom proceed to make assessment regarding other issues as well. There is no prohibition under law that the Assessing Officer is required to confine assessment on the issue for which the assessment was reopened by him.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal, by the assessee, is directed against the order of the learned Commissioner of Income-tax (Appeals)-16, New Delhi, dated 27.05.2019, pertaining to the assessment year 2011-12. The assessee has raised following grounds of appeal:
“1. Ld. AO have to make the addition of such income for which notice u/s 148 was issued then only he can make the addition of any other income, because in wording of section 147, “and” word is mentioned not OR.
2. Case was taken up u/s 147 as there were 300000 cash deposit in the account are from cash already withdraw from same account.
3. Ld. AO made the additions without any show cause notice.”
4. Facts in brief are that the Assessing Officer was in possession of information regarding cash deposit by the assessee in its bank account amounting to Rs. 3,00,000/-. Case of the assessee was reopened for assessment u/s 147 and the assessment u/s 147 read with section 143(3) of the Act was framed vide order dated 25.12.2018. Thereby the Assessing Officer made addition of Rs. 1,89,856/- in respect of the difference between gross profit and net profit, hence assessment income at Rs. 1,90,253/-. Aggrieved against this, the assessee preferred appeal before the learned CIT(Appeals), who after considering the submissions, dismissed the appeal. Now the assessee is in appeal before this Tribunal.
5. No one appeared on behalf of the assessee. It is seen from that from various occasions no one is representing the assessee. Notice sent by speed post has been served upon the assessee as acknowledgement is available on record. Therefore, the appeal was taken up for hearing in absence of the assessee.
6. Ground no. 1 is against validity of the reopening of the assessment. In the grounds of appeal it is stated by the assessee that the Assessing officer was not justified in making the addition other than the item which was recorded in reopening of the assessment.
7. Learned DR opposed the submission and submitted that it is correct that the reason for reopening of the assessment was regarding deposit of cash of Rs. 3,00,000/-. The explanation of the assessee was that the cash was deposited out of cash balance withdrawn from the account, however, no evidence was furnished. Learned DR submitted that so far as the reopening of the assessment is concerned, the Assessing Officer was justified in reopening of the assessment on the basis of the information.
8. I have heard learned DR, perused the material on record and gone through the orders of the authorities below. Admittedly, in the present case the assessment was reopened on the basis of cash deposited in the bank account and no addition has been made by the Assessing Officer regarding deposit of this amount. It is seen that the assessee has not raised this issue before the learned CIT(Appeals). However, this being a legal ground which goes to the very root of the jurisdiction, therefore, same is admitted and is being adjudicated. I have considered the objections of the assessee regarding framing of the assessment qua the issue other than the issue for which the assessment was reopened. There is no dispute that the assessee had made cash deposits in the bank account. It is categorically recorded by the Assessing Officer that no income-tax return was filed by the assessee. Therefore, at the time of reopening there was no explanation regarding source of cash deposits by the assessee. In my considered view it was sufficient for the Assessing Officer to form a belief that the income chargeable to tax has escaped assessment. Hence, he was justified to reopen the assessment u/s 147 of the Act. After reopening of assessment, the Assessing Officer can in his wisdom proceed to make assessment regarding other issues as well. There is no prohibition under law that the Assessing Officer is required to confine assessment on the issue for which the assessment was reopened by him. Hence, ground nos. 1 and 2 of the assessee’ s appeal are devoid of any merit and stand dismissed accordingly.
9. Ground no. 2 is against sustaining the addition of Rs. 3,00,000/-. Learned DR submitted that the contention of the assessee regarding cash deposit in back account out of cash withdrawal is not supported by any evidence. He placed reliance on the finding of the Assessing Officer.
10. I have heard learned DR. It is seen from the record that the Assessing Officer treated a sum of Rs. 1,89,856/- as net profit out of gross receipt of Rs. 18,52,362/-. The assessee has not filed any evidence to controvert the finding of the Assessing Officer. Therefore, I do not see any reason to interfere in the finding of the authorities below. Ground no. 2 of the assessee’ s appeal is dismissed.
11. Ground no. 3 is against making addition without giving notice to the assessee. Regarding this ground, it is seen that the Assessing Officer had given a notice dated 22.12.2018. In response thereto no one attended the proceedings. Therefore, it cannot be inferred that the assessee was not given notice by the assessing Officer. Hence, ground no. 3 of the assessee’ s appeal has no merit and is rejected accordingly.
12. In the result, assessee’s appeal is dismissed.
Order pronounced in open court on 26th April, 2022.
