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04-10-2018, A.Sridevi, Section 148, 147, 149, 153, HIGH COURT OF MADRAS

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1 month 11 hours ago #7414 by amit
Section - 148, 147, 149, 153, 139, 142
Order Date - 04-10-2018
Favouring - Set Aside
Appellant - A.Sridevi
Respondent - ITO
Citation - 1018Taxpundit163
Appeal No. - W.M.P.No.17707 of 2016
Asstt. Year - 2009-10



The petitioner is aggrieved against the order of the respondent dated 26.05.2016, in rejecting the objections raised by the petitioner against reopening of the assessment.

2. The case of the petitioner is as follows:

The petitioner is an assessee under the respondent. For the assessment year 2008-09, the return of income was filed on 30.07.2009 declaring the total income of Rs.14,58,174/-. The return was processed under Section 143(1) of the Income Tax Act. The case was reopened by issuing a notice dated 21.02.2011 under Section 148. The respondent was informed that the return already filed on 30.07.2009 has to be treated as the one filed in response to the notice under Section 148 of the said Act. During the course of hearing, the petitioner was asked the details of sources and nature of cash deposits. The petitioner was asked to file the copies of bank accounts and other evidences.

The authorised representative of the petitioner filed copies of Bank statement. The Assessing Officer, on scrutiny of bank accounts, completed the reassessment under section 143(3) read with section 147 on 30.12.2011 by adding the short fall in cash withdrawal of Rs.10,50,000/- as unexplained income. The respondent once again reopened the assessment by issuing notice under section 148 on 25.03.2016. The petitioner filed a reply dated 11.04.2016 to treat the return already filed on 30.07.2009 as the one filed in response to the notice and also requested to furnish the reasons for reopening the assessment. The respondent, vide letter dated 27.04.2016 furnished the reasons by stating that during the financial year 2008-09, one S.Nagarajan has received a sum of Rs.2.75 crores from the deceased L.S.Abinesh, husband of the petitioner, for purchase of property through his bank account and that sources for such advance made require to be verified. The petitioner, through letter dated 06.05.2016, filed their objections to reopen the assessment by stating that during the course of the first reassessment proceedings, copies of bank statements, receipts and payments account were produced including the sources of all deposits made and that the assessment was completed after due verification of all receipts and payments and the sources and therefore, the proposal to reopen to re-verify the source of advance given to S.Nagaraj amounts to change of opinion. It was also informed that there was no material available to conclude that the income has escaped assessment for issuing notice under section 148. The petitioner had also informed the respondent that there had been full and true disclosure of all material facts. However, the respondent through the impugned proceedings rejected the objection. The very reopening of the assessment for the second time beyond four years is barred by limitation.

3. A counter affidavit is filed by the respondent wherein it is stated as follows:

The writ petition is not maintainable since the petitioner is having effective and alternative remedy once the assessment order is passed under the Act. The reopening of the assessment was not barred by limitation. The assessee has not disclosed the advance made to the said S.Nagarajan for a sum of Rs.2.75 crores towards the purchase of property at Adyar, Chennai. Thus, there was failure on the part of the Assessee in no disclosing fully and truly, all material facts. Based on the tangible information available with valid reason existed, the conclusion was arrived that income had escaped assessment. As the assessee has not fully and truly disclosed the material facts, the issuance of notice beyond four years is not barred by limitation. The contention of the assessee hat the assessment has been reopened on the basis of the existing mate ial and that no new information has come to the knowledge of the Assessing Officer is an incorrect statement. The issue during the first reassessment proceedings pertains to the examination of the sources of the cash deposit made by the assessee in its bank account maintained at Axis Bank amounting to Rs.93 lakhs only. It is evident from the return of income filed as well as from the assessment order passed that the issue of advance given to Nagarajan, which was never disclosed, was not examined in the order passed by the Assessing Officer. The Assessee is relying on the fact that she had interalia produced the Bank statement of Tamilnadu Mercantile Bank also before the Assessing Officer wherein the name of Nagarajan figures and therefore, the same tantamount to specific information available in respect of the property purchased dealing with S.Nagarajan. This clarified that the evidence submitted by her including the bank statement can be treated as sufficient and relevant only insofar as the issue of verification of sources for cash deposits and there has been no mention by the Assessee regarding the particulars of purchase of property transaction with S Nagarajan as well as its source as there was no queries regarding the issue in the original reassessment proceedings. Mere production of bank statement etc., does not amount to disclosure made by the assessee on the said issue and the said information was specifically received by the Assessing Officer only after completion of the first re-assessment and the said information was never disclosed by the assessee prior to it. Therefore, it cannot be stated that the reopening of assessment now initiated was on the basis of existing material or amount to change of opinion.

4. The petitioner filed a reply to the counter affidavit wherein it is stated as follows:

The return of income tax filed in Form No.1 and 2 does not contain in production for disclosure of advances given and it contains only the income tax

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