Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2021 (5) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (5) TMI 960 - AT - Income TaxReopening of assessment u/s 147 - borrowed satisfaction v/s independent application of mind - additions on different ground - HELD THAT:- Heart of the Section 147 is the formation of belief by the A.O. that income has escaped assessment. The reasons so recorded have to be based on some tangible material and that should be evident from reading the reasons. This is the bare minimum mandatory requirement of the first part of Section 147(1) of the Act. Merely saying that `loan has been advanced’ or `ITR has not been filed’, without disclosing the reasons, which led the A.O. to hold such a belief, does not confer valid jurisdiction on the A.O. to take action u/s 147 and 148 as has already been held by the Hon’ble Gujarat High Court in the case of Birla VXL Ltd. [1995 (9) TMI 45 - GUJARAT HIGH COURT] In the case of ITO v. Lakhmani Mewal Das [1976 (3) TMI 1 - SUPREME COURT] the Hon’ble Supreme Court affirmed the decision of the High Court and held that there was nothing to show in the confession made by a third party related to the loan taken by the assessee much less a loan which was shown to have advanced by that person to the assessee and, therefore, live link or close nexus, which should be there between the material and the belief formed by the Assessing Officer was missing or was too tenuous to provide a legally sound foundation for initiation of assessment proceedings under section 147. If the primary burden u/s 147, lying on AO, remains un-discharged, then the entire proceedings would crumble. No addition being loan given forming the main `reason for escapement of income’ u/s 147 of the Act has been made by the AO and instead, the additions have been made on new different grounds, it can be very fairly said that reasons recorded did not exist and hence the assessment framed u/s 147 read with section 143(3) of the Act deserves to be quashed. A.O. had no jurisdiction to travel beyond the reasons for reopening the assessment. We are of the view that reopening proceedings initiated by the A.O were uncalled for and without jurisdiction, therefore, we quash the same.- Decided in favour of assessee.
|