Raghubir Singh Punia Vs ITO (ITAT Delhi)
Conclusion: Reassessment order was quashed on cash deposits as AO did not possess any credible information to form a belief that income had escaped assessment and there was non-application of mind for reopening the matter.
Held: Assessee challenged the order of the CIT(A) in upholding the initiation of reassessment proceedings in as much as CIT(A) had failed to appreciate that the reasons recorded to initiate the reassessment proceedings did not meet the requirement of law and therefore reassessment proceedings were invalid. Assessee submitted that in reasons recorded AO stated that an information was received from the office of ITO, Ward 33(1) that assessee had deposited cash of Rs.10 lakhs or more in savings bank account during the FY 2011-12 pertaining to AY 2012-13. AO did not mention on which date assessee had deposited cash and the reasons recorded were completely vague about the transactions of cash deposits. Therefore, the case of assessee was reopened on mere information available from accountable information management system regarding cash deposit of Rs.10 lakhs or more in the savings bank account maintained by assessee without any documentary evidence and enquiry and merely on suspicion therefore, the reassessment order passed u/s 143(3) r.w.s. 147 of the Act was invalid and void ab initio.. It was held that except the information AO did not possess any other information to come to a conclusion that the income of assessee for the AY 2012-13 had escaped assessment. The reasons were general and very vague. It appeared that AO was not even in possession of bank account of assessee before recording reasons for reopening of assessment. The reasons recorded did not specify the exact amount of cash deposit made by the assessee and the name of the bank, the account number of the assessee and also the date of transaction. All these went to show that AO did not possess any credible information to form a belief that income had escaped assessment. Since the reassessment order was quashed on the legal issue of vague reasons and non application of mind and not inclined to go into the other legal issues as well as the merits of the addition/disallowance made in the reassessment order as it would be of only academic in nature at this stage.
