Section 148 – Assessment completed pursuant to a notice u/s 148 of the Act issued mechanically without application of mind is void and bad in law

9. Omvir Singh vs. ITO (Delhi) N.K.
Billaiya (A.M.) and Ms Suchitra Kamble (J.M.) ITA No. 7347/Delhi/2018 A.Y.: 2009-10 Date of order: 11^th June, 2020

Counsel
for Assessee / Revenue: Rohit Tiwari / R.K. Gupta

Section 148 – Assessment completed pursuant
to a notice u/s 148 of the Act issued mechanically without application of mind
is void and bad in law

FACTS

The A.O., based on AIR information that the
assessee has deposited a sum of Rs. 19.19 lakhs in his savings bank account
maintained with Bank of India, Mehroli, Ghaziabad, issued a notice u/s 148 of
the Act along with other statutory notices. No one attended the assessment
proceedings and no return was filed in response to the notice u/s 148. The A.O.
proceeded to complete the assessment ex parte. Cash deposit of Rs.
19,19,333 was treated as unexplained and added to the returned income of the
assessee.

Aggrieved,
the assessee preferred an appeal to the CIT(A) and questioned the validity of
the notice u/s 148, and furnished some additional evidence invoking Rule 46A of
the I.T. Rules. The CIT(A) did not admit the additional evidence and confirmed
the addition made by the A.O.

Aggrieved,
the assessee preferred an appeal to the Tribunal raising two-fold grievances,
viz. the issuance of notice u/s 148 is not as per the provisions of law and the
addition of Rs. 19,19,333 made by the A.O. in respect of cash found to be
deposited in the savings bank account is incorrect.

HELD

The Tribunal
noted that the undisputed fact is that in the proforma for recording reasons
for initiating proceedings u/s 148, under Item No. 8A the question is ‘Whether
any voluntary return had been filed’ and the answer is mentioned as ‘No’.
Whereas Exhibit Nos. 6 and 7 show that the return of income was filed with Ward
2(1), Ghaziabad on 30^th March. 2010 and the notice u/s 148 is dated
3^rd February, 2016.

This clearly
shows that the A.O. issued the notice mechanically without applying his mind.
Such action by the A.O. did not find any favour with the Hon’ble High Court of
Delhi in the case of RMG Polyvinyl [I] Ltd. (396 ITR 5).

The Tribunal,
having noted that the facts of the instant case were identical to the facts of
the case before the Delhi High Court in RMG Polyvinyl (I) Ltd. (Supra)
followed the said decision and held that the A.O. wrongly assumed jurisdiction,
and accordingly it quashed the notice u/s 148 of the Act, thereby quashing the
assessment order.

The appeal
filed by the assessee was allowed.