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Judgment
PER VIKAS AWASTHY, JUDICIAL MEMBER:
This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [in short 'the CIT(A)'] dated 27.03.2026, for Assessment Year 2020-21.
Shri Yogesh Harjai, appearing on behalf of the assessee submits that notice u/s.148 of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') dated 27.03.2024 was issued to the assessee to verify cash deposits of Rs.34,91,000/-. The Id. AR stated that the assessment proceedings are liable to be quashed firstly as in the reasons for reopening there is no allegation of income escaping assessment. The only allegation is there were unverified cash deposits of Rs.34,91,000/-. Placing reliance on the decision rendered in the case of Bir Bhadur Singh Sijwali vs. ITO in ITA 3814/Del/2011 for AY 2008-09 decided on 20.01.2015, the AR stated that the reasons for reopening must indicate that income has escaped assessment. The AO cannot reopen assessment to make roving enquiries. Secondly, the assessment is liable to be quashed as no addition has been made by the AO for which the assessment has been reopened. The ld. AR pointed that in the reasons for reopening it is alleged that there were unverified cash deposits of Rs.34,91,000/-, whereas, the AO has made addition on account of: (i) Opening cash balance of Rs.2,85,600/-; (ii) Cash deposits by:
| Date | Name | Amount (in Rs.) |
| 28/11/2009 | Deepika Dewas | 2,50,500 |
| 15/01/2020 | Mohinder Pal Singh Kalra | 26,500 |
| 15/01/2020 | Praval Malhotra | 30,000 |
| 21/01/2020 | Amit Kumar | 2,10,000 |
| 21/01/2020 | Megha Dev | 2,70,000 |
| 22/01/2020 | Amit Kumar | 50,000 |
| TOTAL | 8,36,500 |
Investments Rs.1,04,100/-The case of assessee is squarely covered by the decision of Hon’ble Jurisdictional High Court in the case of Ranbaxy Laboratories Ltd. vs. CIT, 386 ITR 136, CIT (E) vs. Monarch Education Society, 387 ITR 416 (Del.), and CIT vs. Jet Airways India Ltd., 195 Raxman 117 (Bombay)
Per contra, Shri Manoj Kumar, representing the department vehemently defended the impugned order and prayed for dismissing appeal of the assessee. The ld. DR submits that addition of Rs.8,36,500/- is in respect of unverified/unexplained cash deposits, therefore, it cannot be said that addition was not made for the reason for which the assessment was reopened.
Both sides heard, orders of the lower authorities examined. A perusal of the reasons recorded for reopening show that notice u/s.148 of the Act was issued for verification of cash deposits of Rs.34,91,000/- in other than current account of the assessee. There is no allegation in the reasons that the said cash deposits resulted in escapement of income from assessment. The notice u/s.148 of the Act cannot be issued merely for making roving or fishing enquiries. The AO has to allege that the income has escaped assessment based on objective concrete information not for mere verification of bank accounts or books of accounts. The reasons for reopening should be self-contained and are to be examined on a standalone basis. Nothing can be added to the reasons recorded at later stage to fill the gaps when they are tested on judicial principles. The Division Bench of Tribunal in the case of Bir Bhadur Singh Sijwali vs. ITO (supra) held:-
“Learnerd Departmental Representative has referred to several other judicial precedents in support of the proposition that at the stage of initiation of reassessment proceedings, all that is to be seen as existence, rather than adequacy, of the material to come to the conclusion that income has escaped assessment. To us, there cannot be any, and there is no, doubt on the correctness of this proposition but then, as we have elaborately explained earlier in this order, the material must indicate income escaping assessment rather than desirability of further probe in the matter which may or may not lead to income escaping the assessment. On the basis of reasons as recorded in this case, such an inference about income escaping assessment, in our humble understanding, cannot be drawn.” [Emphasized by us]
Thus, issuance of notice u/s.148 of the Act for reopening of assessment for the purpose of verification is unsustainable and cannot be held to be a valid ground for reopening the assessment. Hence, notice issued u/s.148 of the Act is without jurisdiction. Any proceedings arising from notice issued without jurisdiction are void ab initio, hence, liable to be quashed.
In the result, impugned order is quashed and appeal of the assessee is allowed.