INCOME TAX ACT, 1961

Sections 147/148

Reassessment - Reasons recorded for reopening of assessment being based on tangible material - Validity -

AO noted that assessee had deposited cash into his bank account, however, he did not file return for relevant assessment year, therefore, he had reason to believe that income had escaped assessment within the meaning of section 147. Accordingly, notice under section 148 was issued. However, assessee did not file return in response to said notice. Thereafter, AO issued five notices of hearing, however, the assessee did not make the compliance. Thus, in absence of requisite details/explanation, the AO completed best judgment assessment by making addition on account of unexplained money under section 69A. Assessee challenged validity of reopening of assessment contending that AO, although mentioned in assessment order that notice under section 148 was issued, but, no such notice was issued to him. Assessee further contended that reasons recorded for reopening of assessment were bad in law, as he deposited cash in bank account out of his business receipts and the AO ought to have conducted enquiry with regards to the same. Held: AO having gone through information and bank statement concluded that income had escaped assessment. Therefore, it could be said that reasons recorded for reopening of assessment, were based on tangible material. Further, assessee contended that notice under section 148 was not issued to assessee, however, the said contention was not sustainable because AO clearly mentioned in his assessment order that notice under section 148 was issued to assessee on 29-3-2019. Moreover, assessee did not contest the issue of reopening of assessment during assessment stage. Hence, reopening of assessment under section 147/148 was valid.

REFERRED :

FAVOUR : Against the assessee

A.Y. : 2012-13

INCOME TAX ACT, 1961

Section 69A

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