Reopening for not replying to invalid and non est inquiry letter for cash deposited in bank quashed. Deposit per se cannot be income of assessee.
ABCAUS Case Law Citation:
ABCAUS 3106 (2019) (08) ITAT
Important case law relied upon by the parties:
Tajendra Kumar Ghai Vs ITO
In the instant case the assessee had challenged the reopening of assessment u/s 147 of the Income Tax Act, 1961 (the Act) and addition made for cash deposited in the bank account.
It was contended that cash deposit per se cannot be treated as income of the assessee. Therefore, reopening of assessment was illegal and bad in law.
He has submitted that the issue was covered by the judgment of the Coordinate Bench which quash the reopening of assessment on similar circumstances.
The Tribunal noted that the AO had recorded reasons for reopening of assessment which revealed that as per AIR information. assessee had deposited cash in the saving bank account. However, the assessee did not make compliance to verification letter issued to assessee to examine the said deposits. Since no compliance/explanation was offered by the assessee for the source of the cash deposited and no ITR was found to have been filed by him, the Assessing Officer (AO) harboured belief that on account of failure on the part of the assessee to disclose his correct and true income, the income chargeable to tax had escaped assessment within the meaning of the section 147 of the Act.
The Tribunal further observed that the Coordinate Bench in an identical case had held that since no proceedings were pending before the AO when he issued the letter of inquiry to the assessee, therefore, such inquiry letter was not valid in the eyes of law.
It was further held that the assessee was not required to respond to this invalid and non est inquiry letter issued by the AO. The deposit in the bank account per se cannot be income of assessee.
The Tribunal, following the order of the Coordinate Bench set aside the orders of authorities below and quashed the reopening of assessment.
addition u/s 68 ca misconduct cash deposit in bank cbdt circular CBDT Instruction cbdt notification cbdt order cbdt press release cgst circular cgst notification cit revision 263 concealment penalty covid-19 custom circular demonetisation due date extension e-way bill faq GST circular GST Council Meeting gst faq gstn advisory gstr-1 GSTR-3B GST rates IBBI ibc icai announcement itat mca circular MCA notification order u/s 119 penalty 271(1)(c) penalty u/s 271(1)(c) Press Release reasons recorded reopening 148 Reopening us 147 Search & Seizure sebi circular sebi regulations transfer and postings unexplained cash credits validity of notice u/s 148 Withdrawal of 2000 500 Bank Notes
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