Case Law Details
Dheeraj Yadav Vs ITO (ITAT Delhi)
Conclusion: AO had recorded incorrect, wrong and non-existing reasons for reopening of the assessment and also failed to verify the information received by him before recording the reasons for reopening of the assessment. Thus, there was clearly non-application of mind on the part of AO to initiate the re-assessment proceedings. Thus, the reopening of assessment could not be sustained in Law.
Held: AO initiated proceedings under section 147 on the basis of information that assessee had deposited cash amounting to Rs.11,07,160/- with ICICI Bank and also earned commission payment amounting to Rs.2,533/- from Karvat Healthcare Services Pvt. Ltd., in assessment year under appeal and no return had been filed. AO, therefore, proceeded to frame re-assessment for non compliance of statutory notice, non-cooperation attitude of assessee and passed ex-parte assessment order under section 147/144 of the I.T. Act, 1961 and made additions of Rs.11,07,160/- on account of unexplained money under section 69A and further made addition of Rs.756/- on account of interest earned. It was held that the validity of the reopening of the assessment is to be determined with reference to the reasons recorded for reopening of the assessment. Assessee had clearly explained that AO had wrongly assumed that entire cash deposited in the ICICI Bank account was income of assessee as there were deposits and withdrawals multiple times throughout the year for business purposes as assessee was in the business of Hardware, Sanitary and Sanitary-ware at Chawdi Bazar, Delhi. These facts clearly showed that total cash deposited in the Bank Account of assessee with ICICI Bank Ltd., per se might not be the income of assessee. Thus, it was a mere suspicion of the AO based on incorrect facts that income chargeable to tax had escaped assessment. AO had recorded wrong and non-existing and incorrect facts in the reasons for reopening of the assessment. AO had also not applied his mind to the facts of the case and merely based on information without verifying the same recorded reasons for reopening of the assessment. Thus, the reopening of assessment could not be sustained in Law.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal by assessee has been directed against the Order of the Ld. CIT(A)-16, New Delhi, Dated 28.05.2019, for the A.Y. 2011-2012, challenging the reopening of the assessment under section 147/148 of the I.T. Act, 1961 and addition of Rs.11,07,160/-.
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