The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has held that reassessment u/s 147 of the Income Tax Act,1961 simply relied on the Non-PAN AIR information is not valid.
Shri Kadir Ahmed, the assessee filed a return of income declaring income of Rs.1,27,521/- on 28.09.2017 which complies with notices issued under section 142(1) dated 22.05.2017 and 14.08.2017. The Department has received Non-PAN AIR information regarding a cash deposit of Rs.21,55,000/- in the savings bank account of the assessee during the financial year 2009-10 and the case of the assessee was reopened under section 147 of the Income Tax Act, 1961.
In compliance with the said notice, the assessee stated that he has sold a property which is located near Surajpur, Greater Noida and the cash sale proceed was deposited in the bank account. On perusal of the sale deed, the A.O. noted that the assessee sold a plot measuring 100.33 metres on 03.06.2009 for a consideration of Rs.6,00,000/-.
The A.O. issued a notice under section 142(1) of the Income Tax Act, 1961 and asked the assessee to furnish the complete source of the cash deposit. The assessee filed his written replies on 25.09.2017 and 09.10.2017. The A.O made the addition of the same under section 68 of the Income Tax Act, 1961 on account of an unexplained cash deposit and determined the total taxable income of the assessee at Rs.16,82,520/- and also initiated penalty proceedings under section 271(1)(c) of the Income Tax Act, 1961 separately. The CIT(A) dismissed the appeal of the assessee.
A Single member bench of ITAT consisting of Shri Chandra Mohan Garg, a judicial member observed that the case of the assessee was reopened under section 147 of the Income Tax Act, 1961 by recording the reasons and after obtaining approval from the JCIT and the PCIT based on the information received by the A.O. from the Non-PAN AIR of the Department that the assessee deposited a sum of Rs.21,55,000/- in the saving bank account during the financial year 2009-10.
The ITAT bench observed that the A.O. has not applied his independent mind while reopening the assessment under section 147 and simply relied on the Non-PAN AIR information. While allowing the appeal, the bench quashed the reopening of the assessment made by the A.O. and the addition made by the A.O. and confirmed by the CIT(A) was deleted.
Shri Anoop Sharma & Shri Sanjay Parashar, Advocates appeared for the assessee and Shri Anuj Garg appeared for the revenue.
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