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2014 (7) TMI 680 - ITAT DELHIReopening of assessment u/s 147 r.w 148 – Reopening only on the on the basis of retracted statement – No further enquiry made – Held that:- There may be a substantive assessment without any protective assessment but there cannot be any protective assessment/addition without a substantive assessment/addition - there has to be some substantive assessment/addition first which enables the AO to make a protective assessment/addition - the AO proceeded to make protective assessment by way of reopening of assessment of the assessee appellant company without being a substantive assessment on the date of assumption of jurisdiction u/s 147 of the Act which is not permissible as decided in M.P. Ramachandaran vs DCIT [2009 (5) TMI 121 - ITAT BOMBAY-E]. Following the decision of CIT vs Dr. R.N. Thippa Shetty [2008 (4) TMI 452 - KARNATAKA HIGH COURT] - if the very basis on which reopening was ordered did not exist, then there was no question of reopening the assessment and thus, notice u/s 148 of the Act deserves to be held as illegal and without jurisdiction - the AO assumed jurisdiction to initiate and reopen reassessment u/s 147 of the Act on the basis of retracted statement of Shri Subodh Gupta which was recorded during the survey on Shri Subodh Gupta in his individual capacity and the AO also proceeded to make a protective assessment/addition without any substantive assessment/addition and without making any further investigation and inquiry about the material and information before him at the time of recording reasons. The AO assumed jurisdiction for reopening of assessment u/s 147 of the Act and for issuing notice u/s 148 of the Act on wrong premise and without any justified, cogent and legal reason - there existed no good or sufficient ground or reason for reopening of the case and issuance of notices u/s 148 of the Act against the assessee company - the condition precedent for valid initiation of reassessment is not being satisfied as the belief that income chargeable to tax has escaped assessment does not exist on the date of assuming jurisdiction u/s 147 of the Act – thus, all subsequent proceedings including issuance of notice u/s 148 of the Act were illegal and bad in law – Decided in favour of Assessee.
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