The Tax Publishers021 TaxPub(DT) 4581 (Del-Trib) : (2022) 096 ITR (Trib) 0612 Lakhmi Chand Tejoo Mal v. ACIT In Favour of Assessee, Del-Trib, ITA No. 8094/Del/2019, 06-Aug-2021

INCOME TAX ACT, 1961

Secton 147, Proviso

AO's plea that he had applied his mind while framing assessment order did not hold any water because application of mind was required while issuing notice under section 148 and not during assessment proceedings because notice for reopening the assessment when served, set the law into motion.

Reassessment - Non-application of mind by AO while recording reasons for reopening - AO pleading to have applied mind while framing reassessment -

AO based on information received from the Office of the ADIT, Investigation, Wing, reopened assessment and made addition under section 68 of Rs. 75 lakhs on account of unexplained loan credit. Assessee contended that 11 entries had been shown in the information and it could be seen that there was repetition of same entries/amounts and AO had, in fact, considered only 4 entries where total unsecured loan amount came to Rs. 75 lakhs and information was in respect of amount of Rs. 2.05 crores. Thus, AO had not applied his mind before issuing notice under section 148. As per AO, assessment process was a fact finding process and when AO found that there were several entries of the same amount, he restricted addition to actual transacton which showed that AO had applied his mind. Held: AO's plea that he had applied his mind while framing assessment order did not hold any water because application of mind was required while issuing notice under section 148 and not during assessment proceedings because notice for reopening the assessment when served, set the law into motion. The very information itself contained 11 entries where total amount of escaped income was mentioned at Rs. 2.05 crores which was part of the reasons recorded for reopening the assessment. It showed that AO had not applied his mind while issuing notice under section 148 and, therefore, reassessment was quashed as void-ab-initio.

Relied:RMG Poly Viynl India Ltd. ITA No. 29/2017 & CM No. 1009/2017 order dt. 7-7-2017 : 2017 TaxPub(DT) 2034 (Del-HC), ITA No. 4991/Del/2014 and 4853/Del/2014 and Synfonia Trade Links Pvt Ltd. WT(C) 12544/2018 : 2021 TaxPub(DT) 1794 (Del-HC).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2011-12



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