Jagat Singh Vs ACIT (ITAT Delhi)
Ld. AR submitted that assessee owned two properties, first property is a farm house situated at Dera Mandi, New Delhi and second property is Gobind Mension, Bharatpur. It is submitted that farm house situated at Dera Mandi, New Delhi is self occupied property, and second property at Bharatpur is in dilapidated condition, and not liavable as such. ALV of such property is NIL. The Ld. AR submitted Assessing Officer treated the Bharatpur property as self acquired property and computed the ALV of the Delhi property and brought to tax a sum of Rs. 7,44,055/-. However, the Ld. AR submitted that CIT (A) negated the approach of the Assessing Officer to the extent of treatment by the Assessing Officer of Bharatpur property as self acquired property, by holding that Assessing Officer cannot impose the Bharatpur property as self acquired property, and upheld the contention of the assessee that Delhi property is self acquired property. However, in respect of the Bharatpur property, it was held that merely because the property requires repairs, it cannot be held that ALV of such property is NIL, and hence estimated the ALV at Rs. 1,20,000/-. The Ld. AR submitted that CIT (A) has completely failed to comprehend that such property is dilapidated condition and is not habitable and unless extensive repairs are done, such property is not lettable. It is submitted that no evidence or material has been brought on record to rebut the submissions of the assessee. The Ld. AR submitted that the Assessing Officer is adjudicator as well as investigator and before reaching any conclusion, it is incumbent upon him to make necessary enquiry. The Ld. AR further submitted that in the case of Shree Nirmal Commercial Ltd. Vs. CIT 193 ITR 694, it has been held that to bring an income under section 22, the property should be inherently capable of being let out, and since in the instant case, the property at Bharatpur is in dilapidated condition, as such, same is incapable for let out and hence the ALV of such property cannot be brought to tax. It is therefore submitted that income computed by CIT (A) under income from house property is unsustainable in law.
Held by ITAT
As regards ground No. 6 to 6.1, the issue is relating to Rs. 1,20,000/- inclusion of ALV of Bharatpur Project. The farm house situated at Dera Mandi, New Delhi is self occupied property, and second property at Bharatpur is in dilapidated condition, and not liavable as such as per the submission of the Ld. AR. ALV of such property is NIL. The Assessing Officer treated the Bharatpur property as self acquired property and computed the ALV of the Delhi property and brought to tax a sum of Rs. 7,44,055/-.The Ld. AR relied upon the decision of the Hon’ble Bombay High Court wherein to bring an income under Section 22, the property should be inherently capable of being let out, and since in the instant case, the property at Bharatpur is in dilapidated condition, as such, same is incapable for let out and hence the ALV of such property cannot be brought to tax. But after going through the decision the ratio as appears in the decision of the Hon’ble High Court is on different issue and will not be applicable in the present case. Even the dilapidated property as its ALV and thus, the contentions of the Ld. AR does not sustain as the property always has the value.
FULL TEXT OF THE ITAT JUDGMENT
These appeals are filed by the assessee against the order dated 26/03/2015 passed by CIT (A)-XXIV- for Assessment Years 2001-02, 2005-06, 2006-07, 2007-08 respectively.
2. The grounds of appeal are as under:-
ITA No. 3036/Del/2015 (A.Y. 2001-02)
“1. That the learned CIT(A) has grossly erred both in law and on facts in upholding the initiation of the reassessment proceedings under section 147 of the Income Tax Act, 1961.
1.1. That the learned CIT(A) has failed to appreciate that, in the absence of surfacing of any tangible material, the learned A. O. could not have proceeded to invoke the provisions of section 147 of the Income Tax Act and as such learned CIT(A) ought to have held that the initiation of proceedings u/s 148 of the Income Tax Act was without jurisdiction.
1.2. That the learned CIT(A) has failed to comprehend that, the learned ACIT had no “tangible material” at the time of initiation of proceedings and the alleged “information” which was stated to have been allegedly received from the Addl. CIT, too was without any supporting material and was not available with him, as such, reassessment proceedings initiated without any tangible material and upheld by the learned CIT(A) is unsustainable in law.
1.3. That, the finding of the learned CIT(A) that the A. O. has received ‘authentic’ information from another Statutory Authority about recovery of Pen Drive from Sh. Chetan Gupta during raid conducted by Punjab Vigilance Bureau, Ludhiana, was insufficient to enable the learned A. O. to form his reason to believe, as the learned A. O. was obliged in law to have the “material” and not a mere report before forming his reason to believe that the income of the assessee had escaped assessment.
1.4. That the learned CIT(A) has failed to appreciate the distinction between mere allegation, information and the material. He has failed to appreciate that the information by itself, which is not in the nature of tangible material could not form the basis of the reopening of the assessment as such, the learned CIT(A) has erred in holding that the learned A.O. was justified both on facts and in law in having initiated the reassessment proceedings.
1.5. That the learned CIT(A) has failed to comprehend that, the alleged information was not available with the A. O. and had it been so available and was allegedly received before initiating the proceeding, the same would have found from his record, which was never found to be existing on the record of A. O. and infact, despite assessee’s repeated request, no such material was either supplied to him or was even confronted.
2. That without prejudice to the aforesaid and otherwise too, the learned CIT(A) has failed to appreciate that, the addition made of Rs. 11,53,200/- was unsustainable. The assumption of the learned CIT(A) that the assessee had a clear business link and association between Sh. Chetan Gupta is fallacious, untenable and in any case any such link or association could not be held to be any ground at all to hold that, the assessee had made an investment with Shri Chetan Gupta, even if for the sake of an argument it is accepted that there was a credit in the Pen Drive maintained by Shri Chetan Gupta.
2.1. The learned CIT(A) has failed to appreciate the distinction between unexplained credits falling u/s 68 and unexplained investment u/s 69 of the Income Tax Act. He has failed to appreciate that the learned A.O. made 11,53,200/- u/s 69 of the Act, which had absolutely no application and thus the addition made of Rs. 11,53,200/- was totally unsustainable.
2.2. That the learned CIT(A) has failed to appreciate that, the burden was on the learned AO to establish that the assessee had made an investment and that there were credits in the books of the assessee, and without discharging such a burden, no addition was sustainable u/s 69 of the Income Tax Act.
2.3. That the learned CIT(A) has further failed to appreciate that, despite the assessee’s repeated request to produce Shri Chetan Gupta for the assessee’s cross examination to rebut the allegation that, there was credits in the books of Shri Chetan Gupta, having not been provided, no addition was sustainable in the hands of the assessee.
2.4. That in any case and without prejudice, no reliance could have been placed on the statement of Shri Chetan Gupta since the said statement was allegedly made before Police authorities and had further never been confronted to the assessee and that even otherwise in the absence of any statement made by Shri Chetan Gupta that, the alleged credits appearing in his Pen Drive in any manner belongs to the assessee, there was no justification either on facts or in law to have sustained any such addition.
2.5. That the learned CIT(A) has failed to appreciate that, the burden which was on the revenue has not been discharged and there was not any material to establish that, what was credited in the account of Shri Chetan Gupta was the investment made by the assessee. The mere fact, there were certain credits in some abbreviated form does not lead to a conclusion that the assessee had made any such investment.
3. That the findings recorded by the CIT(A) in his order in para 5.4.7 that, he does not consider the case laws relied upon by the AR have any relevance to the facts of the case, are wholly misconceived and in disregard of the fact that, in identical facts and in identical circumstances, it has consistently been held that, there were no credits made in the Pen Drive of Shri Chetan Gupta by the assessee’s father, his mother and Shri Amrinder Singh, assessee’s uncle and that of Shri Raninder Singh. Thus there was heavy burden on the CIT(A) to bring on record the facts which can distinguish the judgments relied by the assessee.
It is therefore prayed that, it be held that the initiation of proceeding u/s 147 of the Income Tax Act and that the additions sustained of Rs. 11,53,200/- be deleted and it be further held that, no interest accrued to the assessee as there was no contractual obligation in respect thereof.”
ITA No. 3037/Del/2015(A.Y. 2005-06)
That the learned CIT(A) has grossly erred both in law and on facts in upholding the initiation of the reassessment proceedings under section 147 of the Income Tax Act, 1961.
1.1. That the learned CIT(A) has failed to appreciate that, in the absence of surfacing of any tangible material, the learned A. O. could not have proceeded to invoke the provisions of section 147 of the Income Tax Act and as such learned CIT(A) ought to have held that the initiation of proceedings u/s 148 of the Income Tax Act was without jurisdiction.
1.2. That the learned CIT(A) has failed to comprehend that, the learned ACIT had no “tangible material” at the time of initiation of proceedings and the alleged “information” which was stated to have been allegedly received from the Addl. CIT, too was without any supporting material and was not available with him, as such, reassessment proceedings initiated without any tangible material and upheld by the learned CIT(A) is unsustainable in law.
1.3. That, the finding of the learned CIT(A) that the A. O. has received ‘authentic’ information from another Statutory Authority about recovery of Pen Drive from Sh. Chetan Gupta during raid conducted by Punjab Vigilance Bureau, Ludhiana, was insufficient to enable the learned A. O. to form his reason to believe, as the learned A. O. was obliged in law to have the “material” and not a mere report before forming his reason to believe that the income of the assessee had escaped assessment.
1.4. That the learned CIT(A) has failed to appreciate the distinction between mere allegation, information and the material. He has failed to appreciate that the information by itself, which is not in the nature of tangible material could not form the basis of the reopening of the assessment as such, the learned CIT(A) has erred in holding that the learned A.O. was justified both on facts and in law in having initiated the reassessment proceedings.
1.5. That the learned CIT(A) has failed to comprehend that, the alleged information was not available with the A.O. and had it been so available and was allegedly received before initiating the proceeding, the same would have found from his record, which was never found to be existing on the record of A.O. and in-fact, despite assessee’s repeated request, no such material was either supplied to him or was even confronted.
2. That without prejudice to the aforesaid and otherwise too, the learned CIT(A) has failed to appreciate that, the addition made of Rs. 1,84,39,002/- was unsustainable. The assumption of the learned CIT(A) that the assessee had a clear business link and association between Sh. Chetan Gupta is fallacious, untenable and in any case any such link or association could not be held to be any ground at all to hold that, the assessee had made an investment with Shri Chetan Gupta, even if for the sake of an argument it is accepted that there was a credit in the Pen Drive maintained by Shri Chetan Gupta.
2.1. The learned CIT(A) has failed to appreciate the distinction between unexplained credits falling u/s 68 and unexplained investment u/s 69 of the Income Tax Act. He has failed to appreciate that the learned A.O. made Rs. 1,84,39,002/- u/s 69 of the Act, which had absolutely no application and thus the addition made of Rs. 1,84,39,002/-was totally unsustainable.
2.2. That the learned CIT(A) has failed to appreciate that, the burden was on the learned AO to establish that the assessee had made an investment and that there were credits in the books of the assessee, and without discharging such a burden, no addition was sustainable u/s 69 of the Income Tax Act.
2.3. That the learned CIT(A) has further failed to appreciate that, despite the assessee’s repeated request to produce Shri Chetan Gupta for the assessee’s cross examination to rebut the allegation that, there was credits in the books of Shri Chetan Gupta, having not been provided, no addition was sustainable in the hands of the assessee.
2.4. That in any case and without prejudice, no reliance could have been placed on the statement of Shri Chetan Gupta since the said statement was allegedly made before Police authorities and had further never been confronted to the assessee and that even otherwise in the absence of any statement made by Shri Chetan Gupta that, the alleged credits appearing in his Pen Drive in any manner belongs to the assessee, there was no justification either on facts or in law to have sustained any such addition.
2.5. That the learned CIT(A) has failed to appreciate that, the burden which was on the revenue has not been discharged and there was not any material to establish that, what was credited in the account of Shri Chetan Gupta was the investment made by the assessee. The mere fact, there were certain credits in some abbreviated form does not lead to a conclusion that the assessee had made any such investment.
That the learned CIT(A) ought to have deleted the addition made by the learned AO in respect of the alleged low withdrawals. He ought to have held that the findings of the learned Assessing Officer that the appellant’s withdrawals were insufficient and low warranting an addition to be made under section 69C of the Act were erroneous both on fact and in law and were based on no material. He thus ought to have held that the addition was made on the basis of suspicion and without any material and hence such an addition was liable to have been deleted by holding that addition made without any material was unsustainable in law.
4. That the findings recorded by the CIT(A) in his order in para 4.6.7 that, he does not consider the case laws relied upon by the AR have any relevance to the facts of the case, are wholly misconceived and in disregard of the fact that, in identical facts and in identical circumstances, it has consistently been held that, there were no credits made in the Pen Drive of Shri Chetan Gupta by the assessee’s father, his mother and Shri Amrinder Singh, assessee’s uncle and that of Shri Raninder Singh. Thus there was heavy burden on the CIT(A) to bring on record the facts which can distinguish the judgments relied by the assessee.
5. That the learned CIT(A) has grossly erred in sustaining the disallowance made by the learned AO of Rs. 30,000/- being the deduction allowable to the assessee on income from salary under the provisions of section 16(1) of the Income Tax Act, 1961.
It is therefore prayed that, it be held that the initiation of proceeding u/s 147 of the Income Tax Act and that the additions sustained of Rs. 1,84,69,002/- be deleted and it be further held that, no interest accrued to the assessee as there was no contractual obligation in respect thereof.”
ITA No. 3038/Del/2015 (A.Y. 2006-07)
1. That the learned CIT(A) has grossly erred both in law and on facts in upholding the addition made by the learned ACIT of Rs. 1,73,61,108/- under section 68 of the Income Tax Act, 1961.
2. That while sustaining the aforesaid addition, learned CIT(A) has grossly erred in placing reliance on the order of the CIT(A) for the assessment year 2001- 02 and 2005-06.
3. That without prejudice to the aforesaid and otherwise too, the learned CIT(A) has failed to appreciate that, the addition made of Rs. 1,73,61,108/- was unsustainable. The assumption of the learned CIT(A) that the assessee had a clear business link and association between Sh. Chetan Gupta is fallacious, untenable and in any case any such link or association could not be held to be any ground at all to hold hat, the assessee had made an investment with Shri Chetan Gupta, even if for the sake of an argument it is accepted that there was a credit in the Pen Drive maintained by Shri Chetan Gupta.
2.1 The learned CIT(A) has failed to appreciate the distinction between unexplained credits falling u/s 68 and unexplained investment u/s 69 of the Income Tax Act. He has failed to appreciate that the learned A.O. made Rs.1,73,61,108/- u/s 69 of the Act, which had absolutely no application and thus the addition made of Rs.1,73,61,108/- was totally unsustainable.
2.2. That the learned CIT(A) has failed to appreciate that, the burden was on the learned AO to establish that the assessee had made an investment and that there were credits in the books of the assessee, and without discharging such a burden, no addition was sustainable u/s 69 of the Income Tax Act.
2.3. That the learned CIT(A) has further failed to appreciate that, despite the assessee’s repeated request to produce Shri Chetan Gupta for the assessee’s cross examination to rebut the allegation that, there was credits in the books of Shri Chetan Gupta, having not been provided, no addition was sustainable in the hands of the assessee.
2.4. That in any case and without prejudice, no reliance could have been Placed on the statement of Shri Chetan Gupta since the said statement was allegedly made before Police authorities and had further never been confronted to the assessee and that even otherwise in the absence any statement made by Shri Chetan Gupta that, the alleged credits appearing in his Pen Drive in any manner belongs to the assessee, there was no justification either on facts or in law to have sustained any such addition.
2.5. That the learned CIT(A) has failed to appreciate that, the burden which was on the revenue has not been discharged and there was not any material to establish that, what was credited in the account of Shri Chetan Gupta was the investment made by the assessee. The mere fact, there were certain credits in some abbreviated form does not lead to a conclusion that the assessee had made any such investment.
3. That the learned CIT(A) ought to have deleted the addition made by the learned AO in respect of the alleged low withdrawals. He ought to have held that the findings of the learned AO that the appellant’s withdrawals were insufficient and low warranting an addition to be made under section 69C of the Act were erroneous both on fact and in law and were based on no material. He thus ought to have held that the addition was made on the basis of suspicion and without any material and hence such an addition was liable to have been deleted by holding that addition made without any material was unsustainable in law.
4. That the findings recorded by the CIT(A) that the case laws relied upon by the AR have any relevance to the facts of the case, are wholly misconceived and in disregard of the fact that, in identical facts and in identical circumstances, it has consistently been held that, there were no credits made in the Pen Drive of Shri Chetan Gupta by the assessee’s father, his mother and Shri Amrinder Singh, assessee’s uncle and that of Shri Raninder Singh. Thus there was heavy burden on the CIT(A) to bring on record the facts which can distinguish the judgments relied by the assessee.
It is therefore prayed that, it be held that the addition sustained of Rs. 1,73,61,108/- be deleted and it be further held that, no interest accrued to the assessee as there was no contractual obligation in respect thereof.
ITA No. 3039/Del/2015 (A.Y. 2007-08)
1. That the learned CIT(A) has grossly erred both in law and on facts in sustaining the additions of Rs. 11,66,032/- made by the learned ACIT in the order of assessment passed under section 143(3) of the Act.
2. That while sustaining the aforesaid addition, learned CIT(A) has grossly erred in placing reliance on the order of the CIT(A) for the assessment year 2001- 02.
3. That without prejudice to the aforesaid and otherwise too, the learned CIT(A) has failed to appreciate that, the addition made of Rs. 10,46,032/- was unsustainable. The assumption of the learned CIT(A) that the assessee had a clear business link and association between Sh. Chetan Gupta is fallacious, untenable and in any case any such link or association could not be held to be any ground at all to hold that, the assessee had made an investment with Shri Chetan Gupta, even if for the sake of an argument it is accepted that there was a credit in the Pen Drive maintained by Shri Chetan Gupta.
2.1 The learned CIT(A) has failed to appreciate the distinction between unexplained credits falling u/s 68 and unexplained investment u/s 69 of the Income Tax Act. He has failed to appreciate that the learned A.O. made Rs. 10,46,032/- u/s 69 of the Act, which had absolutely no application and thus the addition made of Rs. 10,46,032/- was totally unsustainable.
2.2. That the learned CIT(A) has failed to appreciate that, the burden was on the learned AO to establish that the assessee had made an investment and that there were credits in the books of the assessee, and without discharging such a burden, no addition was sustainable u/s 69 of the Income Tax Act.
3. The main appeal in this matter is for A.Y. 2001-02, therefore, we are taking the facts of the said year. In this case, notice u/s 148 of the Income Tax Act, 1961 was issued on 25/3/2008 with prior approval of CIT (C), New Delhi, after recording reasons to the satisfaction of the Assessing Officer. Information was received from the Investigation Wing that a search and seizure operation was conducted by Punjab vigilance Bureau at Ludhiana pertaining to the Ludhiana City Centre Scam. During this operation, the pen drive was recovered from Shri Chetan Gupta. The Assessing Officer observed that the study of the data in the said computer showed that Sh. Chetan Gupta was maintaining computerized accounts of about 148 odd people whose money and wealth he was administering. One of the names contained in this was that of assessee, as per the observation of the Assessing Officer. The Assessing Officer made an addition of Rs. 11,53,200/- on account of unexplained investments .
4. Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT (A) dismissed the appeal of the assessee.
5. The Ld. AR submitted that the assessee is an individual. The assessment years under consideration are AYs. 2001-2002, 2005-2006, 2006-2007 and 2007-2008. In so far as the AYs. 2001-2002, 2005-2006 and 2006-2007 are concerned, the proceedings have been initiated u/s 148 of the Income Tax Act, whereas for the AY 2007-2008, the assessment has been made on the basis of return of income filed u/s 139(1) of the Income Tax Act. In the appeals filed, the assessee challenged both the initiation of the reassessment proceedings u/s 148 of the Act which are contended to have been initiated without there being the existence of any material for forming a reasons to believe that the income of the assessee has escaped assessment and as well as on the merits of the additions made. The Ld. AR submitted that soon the proceedings had been initiated by invoking the provisions of Section 147 of the Act, the assessee had been seeking such material as were stated by the Assessing Officer in the ‘reasons to believe’ to be his basis for initiating the proceedings. The Ld. AR submitted that the said alleged material had never been supplied to the assessee even till the framing of the order of assessment. The Ld. AR pointed out these facts are emerging from the Assessment Order and the order of the CIT(A) for which written submissions were made during the course of hearing. The Ld. AR submitted that despite the aforesaid requests made by the assessee, the Assessing Officer never supplied any such alleged material, and on the contrary, the Assessing Officer merely stated that his reasons to believe are based on the basis of the information received from the ADIT (inv.). Thus, the Ld. AR submitted that these facts are apparent from the remand report dated 29.10.2013 for assessment year 2001-2002 and 2007-2008 and 25.11.2014 for assessment year 2005-2006 furnished by the Assessing Officer before the CIT (A). For which the Ld. AR pointed out page 81-82 of the paper book for 2001 – 2002 and 53-55 for assessment year 2005-2006 paper book – I. The Ld. AR submitted that, the remand report stated that information had been received from the ACIT, CC-2, New Delhi that a search and seizure operation was conducted by the Punjab Vigilance Bureau pertaining to Ludhiana City Centre Scam. The Ld. AR further submitted that this observation of the Assessing Officer is not supported by any documents. Thus the submission is that proceedings had been initiated not on the basis of any material but on the basis of mere alleged information. The Ld. AR submits that under section 147 of the Act, since the reasons to believe are to be of the Assessing Officer and not of any other person other than him, no valid proceedings could have been initiated by him without there being in existence of any sum tangible material for a formation of Assessing Officer’s reason to believe that the income of the assessee has escaped assessment. The Ld. AR further submitted that even the addition has been made by the Assessing Officer not on the basis of any material but merely on the basis of the alleged information. The Ld. AR further reiterated that even till the assessment had been completed no such alleged material has seen the light of the day.
6. The Ld. AR submitted that it is thus apparent that the Assessing Officer had no material or evidence whatsoever in his possession or on his record but had proceeded to initiate the proceedings u/s 148 of the Act without satisfying the preconditions of the section 147 of the Act. In fact, it was for this reason alone while permitting the assessee to withdraw its writ petition, the Hon’ble High Court permitted the petitioner even to raise all objections including the validity of the initiation of the reassessment proceeding. The Ld. AR submitted the copy of the order of the Hon’ble High Court dated 11.11.2008 for assessment year 2001-2002 and dated 17.04.2012 during the hearing.
The Ld. AR further added that similarly in the case of the father of the assessee, ‘Shri. K. Natwar Singh’, and mother of the assessee ‘Smt. Heminder Kumari’, proceedings were initiated u/s 148 of the Act and additions had similarly been made. The CIT (A) while disposing off the appeals of the said assessees had however deleted the additions since he found that there was no valid material available on record, but had upheld the validity of the initiation of the reassessment proceedings. In fact it was noted by him that Shri. Chetan Gupta who was allegedly found in possession of a pen drive had even denied that he was found in possession with any such pen drive. The revenue being aggrieved from the aforesaid orders had filed appeals before the Tribunal and the Tribunal by its order upheld the deletion of the addition made by the CIT (A), by holding that no addition was warranted, as there existed no valid material for assuming that any investment as alleged had been made and so allegedly reflected in the pen drive, more particularly when even Shri. Chetan Gupta denied the recovery of any such pen drive. The Ld. AR thus submitted that since the facts and circumstances of the case are absolutely identical to the aforesaid cases and there being no evidence or material to support the addition made by the Assessing Officer, the addition made, does not deserve to be upheld and consequently it is the submission of the Ld. AR that even the initiation of the reassessment proceedings u/s 148 of the Act for the AYs 2001-2002, 2005-2006 & 2006-2007 deserves to be held as having not validly initiated. The Ld. AR supported his submissions from the following judicial pronouncements wherein it has been held that in the absence of any tangible material, no valid proceedings could be held sustainable in law:
i. ITO vs. Lakhmani Mewal Das (1976) 103 ITR 437 (SC) at 448
ii. Ganga Saran and Sons P. Ltd. Vs. ITO [1981] 130 ITR 1(SC)
iii. Ashok Kumar Sen Vs ITO 132 ITR 707 (Del.)
7. The Ld. AR further submitted that it is well settled rule of law that existence of the tangible material with the Assessing Officer for the formation of the reasons to believe is pre-condition. In the instant case, in fact till March, 2015 when the Tribunal had disposed off the assessee’s father’s appeal, no material was found available other than the mere alleged information unsupported by any document or supportive evidence. The Hon’ble High Court of Delhi in the case of CIT vs. Supreme Polypropolene Pvt. Ltd. (ITA 266/2011 dated 30.10.2012) had struck down the notice issued to the assessee u/s 148 of the Income Tax Act on the ground that, there was no material on record with the Assessing Officer when he initiated the proceedings u/s 147 of the Act. In the judgment, it has been observed as under:
“This court notices from the extract of the “reasons to believe” reproduced in the earlier part of the order that the A. O. adverted to a list, on the basis of which he was of the opinion that, there was no full and true disclosure of all sources of income by the assessee. There are no details of that list. Even the list is not part of the assessment record which this court had the benefit of considering. More shockingly, the assessment file did not even contain the forwarding letter, much less mention of the date of that list or the date of that letter which allegedly forwarded that list. The complete absence of these facts and any whisper as to even a single detail of that list coupled with the vague mention of a list, which mentions some other material adverted to in other assessment proceedings, in the opinion of this court certainly cannot be said to constitute sufficient “reasons to believe” to warrant a notice u/s 148 during the extended period within the meaning contemplated by law.”
The aforesaid judgment of the Hon’ble High Court was subjected to review petition (Rev. Petition No. 215/2013, in ITA No.266/2011) and the said review petition also got dismissed on 26.04.2013 (reported in [2013] 35 taxmann.com 215 (Delhi)) by holding as under:
“7. We are afraid that once it is conceded on behalf of the revenue that the list was not produced before this Court at the time of the hearing of the appeal and is only being produced along with the review petition after locating the same in other files subsequently, then there is no merit in the review petition. This Court had perused the reasons recorded but the list was not found to be part of the assessment record which was seen by this Court. This Court had also noted – “shockingly” – that the assessment record did not contain even the forwarding letter alleged to have been written by the ADIT to the assessing officer. It was open to the revenue to produce the list when the appeal was heard by this Court, though it would have been even then a matter of debate as to whether, in the absence of the list in the assessment record of the assessee, the reasons for reopening the assessment can be said to have been properly recorded by relying on a list which is not found in the assessment record. The prime requirement for the validity of a notice issued under section 148 of the Income Tax Act is that the reasons recorded should have a live link or nexus with the material on record. This Court on an examination of the assessment record did not find therein the list on the basis of which the reasons were recorded.”
8. The Ld. AR further submitted that apart from the issue pertaining to the initiation of proceedings u/s 148 of the Act, the main issue involved in all the four appeals pertains to the addition made of the following sums:
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