INCOME TAX ACT, 1961

Section 147

Reassessment - Reason to believe - Information received as to cash deposits made by AO - Assessee not having filed return prior to issuance of section 148 notice

AO received information that assessee had deposited cash aggregating to Rs. 10 lakhs or more with a bank. The assessee had not filed return of income for assessment year 2010-11. On the basis of information received. AO initiated reassessment proceedings after recording reasons and after seeking approval by competent authority. During the course of reassessment proceedings, the assessee was required to explain the source of cash deposits. However, no one attended in response to statutory notices issued by AO accordingly framed best judgment assessment by invoking section 144 made addition under section 68 holding that concerned deposits as unexplained cash credits. Assessee contended that information with regard to cash deposits in bank account could not lead to the conclusion that there was an escapement of income. Held: Information was received by AO and proper reasoning had been recorded after taking necessary approval as per mandate of section 147. Assessee could not point out that there was lack of reasoning or no necessary approval was taken from higher authorities. Also, assessee had not filed any return prior to issuance of section 148 notice and had not given any details to AO as related to cash deposits. Accordingly, there was no infirmity in reopening proceedings.

Distinguished:Tajender Kumar Ghai v. IT0 in ITA No. 970, 971/Del/2017, Hameeda Begum v. ITO [ITA No. 7403/Del/2018], Saurabh Saini v. ITO (ITA No. 6003/Del/2018) : 2019 TaxPub(DT) 6216 (Del-Trib) Bir Bahadur Singh Sijwali v. ITO [ITA No. 3814/Del/2011]