All facts when considered with reasons recorded for reopening of the assessment would lead to only one conclusion that the reasons recorded for reopening the assessment are devoid of any application of mind. In our considered opinion, such reopening cannot be upheld. We, accordingly, quash the notice u/s 148 of the Act thereby quashing the assessment order so framed. Since we have quashed the assessment order, we do not find it necessary to dwell into the merits of the case.
FULL TEXT OF THE ITAT JUDGMENT
This appeal by the assessee is preferred against the order of the CIT(A), Noida dated 31.10.2016 pertaining to A.Y 2010-11.
2. The grievances of the assessee read as under:
“1. The CIT (A) has grossly erred in law in not adjudicating all the grounds of appeal taken before him and passing a non-speaking order Which is against the law, so the order passed requires to be quashed.
2. The CIT (A) has erred in law in upholding the addition of Rs. 14,50.000/- made by AO under the head undisclosed income without adjudicating the ground no 1 of Appeal taken before him.
3. The CIT (A) has erred in law in upholding excess addition of Rs. 45,36,000/- made by AO under the head short term capital gain as ground no 2 taken before him without adjudicating.
1) The CIT (A) has grossly erred in law in upholding the arbitrary addition of Rs. 36,84,000/- made by AO under section 50C of the income tax Act, 1961 without discussing why the submission of the assessee are not acceptable, whether these were against the law.”
3. Before us, the assessee sought to raise the following additional ground of appeal:
“That the impugned assessment so framed is bad in law and on facts, in as much as, the initiation of proceedings under section 147 of the Act and, further completion of assessment under section 143(3)/ 147 of the Act was without satisfying the statutory pre-conditions (with non application of mind and without any tangible material) as envisaged in aforesaid section and was without jurisdiction and was liable to be quashed, as such.”
4. The issue raised vide additional ground [supra] goes to the root of the matter. In the light of the decision of the Hon’ble Supreme Court in the case of NTPC 229 ITR 383, the additional ground is admitted.
5. The reasons for reopening the assessment read as under:
“Reasons u/s 147 of the Act
As per AIR information the assessee sold/ purchase a immovable property of Rs 10395000/- as on 30/05/2009. The letter dated 06.01.2015 was issued to assessee but the assessee has not replied.
The .assessee is not assessed to tax. Cconsidering the above facts, I have reason to believe that assessee has escaped the income to Rs. 10395000/- which is chargeable to tax A. Y. 2010-11 within the meaning of section 147 of the I.T. Act.
(Ajay Kumar Gupta)
Income Tax Officer
6. All that we find to consider is whether the Assessing Officer has applied his mind before issuing notice u/s 148 of the Act or not?
7. From the above, it is clear that the Assessing Officer has mentioned that the assessee is not assessed to tax. This is factually incorrect as Exhibit 1 shows that the assessee has filed return of income on 29.09.2010 electronically.
8. Exhibit 12 is a letter issued by the ITO, Ward 1(2), Noida asking the assessee to furnish details in respect of purchase of immovable property stating that the assessee has purchased the said property without quoting PAN. Exhibit 13 is the reply filed by the assessee explaining the financial transactions.
9. Exhibit 16 is another notice by the ITO, Ward – 1(2) asking the assessee to furnish information in respect of financial transactions. Surprisingly, this notice contains PAN of the assessee. In the earlier notice, as mentioned elsewhere, the same ITO observed that the assessee has entered into transaction without quoting PAN. Exhibit 17 is the reply filed by the assessee.
10. Exhibit 18 is again a notice by the same ITO asking the assessee to once again furnish information regarding financial transactions. Exhibit 19 is the reply filed by the assessee.
11. All these facts when considered with reasons recorded for reopening of the assessment would lead to only one conclusion that the reasons recorded for reopening the assessment are devoid of any application of mind. In our considered opinion, such reopening cannot be upheld. We, accordingly, quash the notice u/s 148 of the Act thereby quashing the assessment order so framed. Since we have quashed the assessment order, we do not find it necessary to dwell into the merits of the case.
12. In the result, the appeal of the assessee in ITA No. 6616/DEL/2016 is allowed.
The order is pronounced in the open court on 31.10.2018.