Bank Statement Needs to be Obtained Before Issuing Notice for Reassessment u/s 148: ITAT Deletes Income Tax Addition [Read Order]

The Delhi bench of Income Tax Appellate Tribunal (ITAT) held that the revenue authorities are expected at least to obtain the bank statement before issue of notice under Section 148 of the Income Tax Act, 1961 and completion of the assessment proceedings under Section 144 of the Income Tax Act, since the revenue could not bring anything on record with regard to the alleged deposits (bank statement) the addition made by the AO was deleted.

The assessee in this case is Manveer Singh, contended that the addition of Rs. 10,90,380 made under Section 69 of the Income Tax Act to the income of the Appellant is not tenable under the facts of the case since the same has been made in gross ignorance of the fact that the source of cash deposited in the bank account were either from the withdrawals made from the relevant bank account or receipts generated during the course of agricultural business.

The assessee further stated that Assessing Officer (AO) has erred in relying only on the information of the Annual Information Report without making independent enquiries and framing the best judgment assessment without verifying the complete bank account of the Appellant.

Aggrieved by the order, the assessee filed an appeal before the Commissioner of Income Tax (Appeals) [CIT(A)].

It was stated that the CIT(A) erred on facts and in law in not appreciating that the initiation of reassessment proceedings, and not holding that impugned order as void ab-initio on the ground that the same was concluded without any service of jurisdictional notice under Section 148 of the Income Tax Act.

The bench comprising of Dr. B. R. R. Kumar, Accountant Member observed that the AO made addition of Rs.10,90,380  on the alleged cash deposits based on AIR information even without obtaining the bank statement and keeping in it on record.

The revenue authorities are expected at least to obtain the bank statement before issue of notice under Section 148 of the Income Tax Act and completion of the assessment proceedings under Section 144 of the Income Tax Act.

Hence, the Tribunal held that Since, the revenue could not bring anything on record with regard to the alleged deposits (bank statement) the tenets of “Best judge assessment” are grossly flouted. Thus, the addition made by the AO was hereby deleted.

To Read the full text of the Order CLICK HERE

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