The Income Tax Appellate Tribunal (ITAT), Delhi Bench quashed the assessment since the reasons recorded were wrong, non-existing, and incorrect facts.
The proceedings under section 147 of the Income Tax Act, 1961 was initiated on the basis of information that assessee, Dheeraj Yadav had deposited cash amounting to Rs.11,07,160 with ICICI Bank and also earned commission payment amounting to Rs.2,533 from Karvat Healthcare Services Pvt. Ltd., in the assessment year under appeal and no return has been filed.
The AO, therefore, proceeded to frame re-assessment for non-compliance of statutory notice, non-cooperation attitude of the assessee and passed ex-parte assessment order under section 147 or 144 of the Income Tax Act, 1961 and made additions of Rs.11,07,160 on account of unexplained money under section 69A and further made the addition of Rs.756 on account of interest earned. The income was computed at Rs.11,07,916. The CIT(A) dismissed the appeal of the assessee.
The assessee on the basis of the bank statement and bank flow statement to show that in ICICI Bank there are cash deposits contended that the AO has recorded incorrect facts in the reasons for reopening of the assessment that there was a cash deposit of Rs.11,07,160.
On the other hand, the respondent authority urged that AO has correctly recorded reasons for reopening of the assessment because there was a cash deposit in the ICICI Bank Account of the assessee, therefore, reopening of the assessment is justified in the matter.
The Coram consisting of Anil Chaturvedi and Bhavesh Saini held that there was clearly non-application of mind on the part of the AO to initiate the reassessment proceedings. The AO would not get an assumption of jurisdiction legally to frame the reassessment under section 147 or 148 of the Income Tax Act, 1961.
Therefore the ITAT set aside the Orders of the authorities below and quash the reopening of the assessment. Resultantly, all additions stand deleted.
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