Anil Chaturvedi ORDER
Anil Chaturvedi, Member (A)
1. This appeal filed by the assessee is directed against the order dated 28.06.2019 of the Commissioner of Income Tax - Delhi - 13, New Delhi relating to Assessment Year 2011-12.
2. The relevant facts as culled from the material on records are as under:
3. Assessee is an individual who is stated to be having income from business, house property, capital gains and other sources. Assessee had filed his original return of income for A.Y. 2011-12 on 27.08.2011 declaring loss of Rs. 8,27,977/-. Subsequently, the AO has noted in the assessment order that information was received from the office of ADIT (Inv.), New Delhi about assessee having rental income from various properties and the income from such properties was not disclosed by the Assessee. Accordingly, notice u/s. 148 of the Act was issued to the Assessee on 29.03.2018 wherein the assessee was inter alia asked to file the return of income. In response to the aforesaid notice, assessee filed the return of income on 22.10.2018 declaring Nil taxable income. Thereafter, the case of the assessee was taken up for scrutiny and consequently, the assessment was framed u/s. 147 r.w.s 143(3) of the Act vide order dated 27.12.2018 and the total income was determined at Rs. 20,77,592/- on account of deemed rental income and after adjusting the loss of Rs. 8,27,977/-, the total taxable income was determined at Rs. 12,49,610/-. Aggrieved by the order of AO, assessee carried the matter before CIT(A) who vide order dated 28.06.2019 in Appeal No. 230/18-19 granted partial relief to the assessee. Aggrieved by the order of CIT(A), assessee is now in appeal and has raised the following grounds:
1) The order passed by AO and confirmed by CIT[A] are bad in law and against the facts of the case.
2) The reopening by AO and further assessment was not in line with apex court, therefore, assessment be annulled.
3) The addition by AO and confirmation by CIT[A] are incorrect and against the provision of section 22/23(1)(a) which is without any basis or cogent evidence, therefore addition of Rs. 400000/- and Rs. 1440000/- sustained, deserves to be deleted.
4) The averments made in order by AO and sustained by CIT[A] are against the principles of natural justice, against the law of evidence completely arbitrary based on whims and fancies, without following the due procedure of law and without proper notice."
4. At the outset, Ld. AR submitted that vide Ground No. 1 & 2, Assessee is challenging the assumption of jurisdiction u/s. 148 of the Act and vide Ground No. 3, assessee is challenging the addition on merits.
5. With respect to challenging the assumption of jurisdiction, Ld. AR at the outset, submitted that the reopening by the AO u/s. 148 of the Act is bad in law and without jurisdiction and therefore, needs to be quashed and set aside. He pointed to the copy of reasons that were recorded for reopening which is placed at Page 1 & 2 of the paper book. Pointing to the recorded reasons, he submitted that the AO had initiated the reopening proceedings on the basis of the information received from ADIT (Inv.), New Delhi about the alleged escapement of rental income from the properties. Referring to the reasons recorded, he submitted that the AO had failed to record the independent findings as to how the income has escaped assessment on a proper application of mind and that the AO recorded his satisfaction only on the basis of the information received from the Investigating wing without any enquiries and hence, he assumed jurisdiction only on the borrowed satisfaction, which is impermissible in law. He submitted that it is a settled law that reopening cannot be initiated on the basis of borrowed satisfaction and for the aforesaid proposition he relied on the following decisions:
(i) PCIT vs. Dharamvir Singh Rao (2017) TIOL 2447 HC Del
(ii) PCIT vs. RMG Polyvinyl (I.) Ltd. MANU/DE/1876/2017 : (2........