Excerpt:
The Income Tax Appellate Tribunal, dated 1st January 2021, quashed the appeal regarding the reopening assessment. The Bench directed that the A.O. would not get jurisdiction legally to frame the reassessment under Section 147/148 of the I.T. Act, 1961.
Facts of the Case:
The appeal was regarding the proceedings under section 147 of the I.T. Act, 1961 was initiated based on information that the 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 the assessment year under appeal and no return have been filed.
Therefore, the Assessing Officer proceeded to frame re-assessment for non-compliance of statutory notice, non-cooperation attitude of the 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 of the I.T. Act, 1961 and further made the addition of Rs.756/- on account of interest earned.
Arguments before the Court:
The assessee challenged the reopening of the assessment before the tribunal during the order dated 1st June 2016, wherein it was submitted that the assessee is Maulvi for Arabic Religious and Teacher and teaching Arabic in the Masjid. He has prestige in society and is trustworthy in the community. Also, Assessee gets a salary from the Waqf Board, Delhi.
Analysis:
The Court referred to the case of Shri Abrar Ahmad Qasimi, Delhi vs., ITO, Ward-46, wherein, the case was based on similar facts and the Tribunal held that it was a mere suspicion of the A.O. based on incorrect facts that income chargeable to tax has escaped assessment.
Court’s Observation:
The Tribunal Bench observed that the assessee had not filed ROI for the year under consideration and due to this the commission payments received by the assessee amounting to Rs.11,09,693/- remain unexplained.
Furthermore, the Bench said that commission payments received by the assessee during the year chargeable to tax has escaped assessment, which is in contravention of provisions of Section 149(1) (b) read with Section 151(3) of the I.T Act, 1961.
Furthermore, the Bench observed that A.O. has recorded incorrect, wrong 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 non-application of mind on the part of the A.O. to initiate the reassessment proceedings.
Court’s Decision:
The Tribunal composed of Income Tax Officer, Shri Dheeraj Yadav directed that the A.O. would not get jurisdiction legally to frame the reassessment under Section 147/148 of the I.T. Act, 1961.
Therefore, the Bench quashed the reopening assessment and set aside the orders of the authorities.
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