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2014 (7) TMI 291 - ITAT DELHIRe-opening of assessment u/s 148 - Proper reason to believe the escapement of income - non-verification of the suspicious information - Whether the reasons as recorded constitute a tangible and correct and are indicative escapement of income in material terms – Held that:- In Income-Tax Officer, I Ward, Distt. VI, Calcutta, And Others Versus Lakhmani Mewal Das [1976 (3) TMI 1 - SUPREME Court] it has been held that the powers of the ITO to reopen assessment, though wide, yet are not plenary - The words of the statute are ‘reason to believe' and not ‘reason to suspect' - The reopening of an assessment is a serious matter and it should be ensured that these powers are used by the AO properly - the reason to suspect cannot be a basis for reason to believe also in Commissioner of Income Tax, Delhi Versus M/s. Kelvinator of India Limited [2010 (1) TMI 11 - SUPREME COURT OF INDIA] it has been held that for assessing officer to reopen the assessment there should be tangible material to come to the conclusion and should have a live link with the formation of belief to come to a conclusion that there is escapement of income. When assessing officer has recorded in the reasons that all the cash transactions are recorded in the assessee's books of a/cs, entire edifies of the veracity of ED information fails. Besides, in the absence of any information about the non plausible explanation from ED point of view this vague information on its own also cannot be a basis to form a reasoned belief. Thus, in our considered opinion the assessing officer has blindly relied on the suspicion intimated by ED. Assessing officer on one hand gave a reason that transactions are recorded, on the other hand without making any effort recorded reason to believe to reopen the assessment of the assessee. - the reason to believe made by assessing officer are self contradictory and based only on suspicion. - the reason to believe as formed by AO are not in terms as contemplated by sec. 147 - AO did not have valid reason to believe that income had escaped assessment – Decided in favour of assessee.
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