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08-03-2019, Meena Baldua, Section 151, 139(1), Tribunal Jaipur

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2 months 6 days ago #8775 by amit
Section - 151, 139(1), 148, 144, 69C
Order Date - 08-03-2019
Favouring - Assessee
Court - Tribunal Jaipur
Appellant - Meena Baldua
Respondent - ITO
Citation - 319Taxpundit224
Appeal No. - ITA No. 872/JP/2018
Asstt. Year - 2008-09



This appeal by the assessee is directed against the order dated 19.03.2018 of ld. CIT (A), Udaipur for the assessment year 2008-09. The assessee has raised the following grounds:-

“1. That the learned Commissioner of Income Tax (Appeals-2), Udaipur has erred in law and in facts in treating the assessment legally correct.

2. That the learned Commissioner of Income Tax (Appeal-2) has erred in law as well as in facts in sustaining addition made for payment of credit card.

3. That the assessee has right to add, amend or alter any ground of appeal.”

2. The assessee is an individual and did not file return of income U/s 139(1) of the Act for the year under consideration. The AO issued notice U/s 148 of the Act on 25.03.2015 after recording the reasons that the credit card expenditure to the tune of Rs 15,29,050/- and interest received in the saving bank account of Rs. 39,000/- has escaped assessment. The AO completed assessment U/s 148 r.w.w. 144 of the I.T. Act and made the addition on total amount of Rs. 15,68,050/-. The assessee challenged the action of the AO before the ld. CIT(A) and contended that the assessee even does not have any credit card therefore, the reasons recorded by the AO for payment of credit card bills are not valid reasons for reopening of the assessment of the assessee. The ld. CIT(A) called for a remand report and after considering the remand report of the AO rejected the ground challenging the validity of the opening.

3. Before us, the ld. AR of the assessee has submitted that the AO reopened the assessment by recording that as per AIR Information, the assessee has paid Rs. 15,29,050/- for payment of credit card bills and also received interest of Rs. 39,000/- but the assessee has not filed any return of income. The ld. AR has pointed out that the notice issued by the AO U/s 148 of the Act was not received by the assessee and further the assessee has clearly raised this objection before the ld. CIT(A) and pointed out that the assessee does not have any credit card and therefore the question of payment of credit card bills does not arise. In the remand report the AO has accepted that there was no credit card payment by the assessee however, the ld.CIT(A) has treated the same as clerical mistake and sustained the addition made by the AO by considering the same as deposit made in the bank account. The ld. AR of the assessee has relied upon the decision of Hon’ble Bombay High Court in case of Hindustan Lever Ltd. vs. R.B. Wadkar 268 ITR 332 and submitted that the reasons are required to be read as they were recorded by the AO and no substitution or deletion is permissible. Therefore, no amendment, alteration or change can be made to the reasons recorded for reopening of the assessment U/s 148 of the Act. Even it is not open to the AO to improve upon the reasons recorded at the time of issuing the notice either by adding or substituting the reasons. There is no tangible material having nexus with the reasons recorded by the AO to form the belief that income assessable to tax on account of payment of credit card bills has escaped assessee. The ld. AR has submitted that the reasons must provide a live link to the formation of the belief that income has escaped assessment. In support of his contention, he has relied upon the decision of Hon’ble Bombay High Court in case of Infotech Ltd. V/s ACIT 329 ITR 257. The AO in the reasons recorded has stated that the assessee has made payment of credit card bills but subsequently in the remand report he has submitted that it is a clerical mistake in the reasons recorded instead of recording cash deposit in the saving bank account of the assessee. Thus the ld. AR has submitted that the reopening of the assessment and consequently reassessment order is not sustainable and liable to be quashed.

4. On the other hand, ld. DR has submitted that the assessee has not appeared before the AO and reassessment was passed ex-parte. The ld. CIT(A) has recorded the fact that in the notice u/s 142(1) of the Act the AO has mentioned the cash deposit in the bank account and not

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