TMI Blog2019 (11) TMI 345X X X X Extracts X X X X X X X X Extracts X X X X ..... eproduction of information received from the Investigation Wing. The said information is also incomplete as regards the details of the purchases and the parties from whom such purchases were made by the assessee. Thus the reasons recorded by the AO manifest that there is no application of mind and the averments as recorded in the reasons are very vague and general and rather inconsistent with the facts available on record so far as the filing of return of income by the assessee. The formation of belief on such incorrect and vague reasons would lead the reopening of the assessment as invalid. Making the wrong statement in the reasons recorded and ignoring the relevant and correct facts available on record established that the AO has not a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... believe, and is violation of section 147, 148, 149 151 of the Act and the entire proceedings of reassessment deserves to be quashed. 2. that on the facts and in the circumstances of the case, the ld. CIT (Appeals) grossly erred in restricting the trading addition to the extent of ₹ 3,23,575/- and in rejecting the books of account. 3. The appellant craves leave to add, alter, modify or amend any ground on or before the date of hearing. Ground No. 1 is regarding validity of reopening of assessment. 2. The assessee is an Individual and proprietor of M/s. Rawat Jai Corporation carrying on business of trading, import and export of precious and semi precious stones ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the reasons is factually incorrect as the assessee filed his original return of income on 29.10.2007. the return was filed on-line which was subsequently accepted by the AO that the assessee has filed the return of income. Therefore, the formation of belief by the AO on the basis of incorrect facts recorded in the reasons renders the reopening invalid and liable to be quashed. He has further submitted that even in the objections filed by the assessee against the notice issued under section 148 the assessee has specifically raised this objection about the wrong and incorrect information mentioned in the reasons which clearly shows that the AO has not applied his mind while forming the opinion/belief that the income assessable to tax has es ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmissions as well as the relevant material on record. The AO has reopened the assessment by recording the reasons as under :- As per information, the assessee has made bogus purchases of ₹ 24,02,235/- during the year under consideration as per information provided by DGIT (Inv.), vide his office letter dated 14.03.2014. Since assessee has not filed the return of income, purchases amounting to ₹ 24,02,235/- are not verifiable. In view of above given facts, I have reason to believe that ₹ 24,02,235/- has escaped assessment in term of section 47 of I.T. Act, 1961. It is a fit case for issuance of notice u/s 148 of I.T. Act, 1961. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of mind and the averments as recorded in the reasons are very vague and general and rather inconsistent with the facts available on record so far as the filing of return of income by the assessee. The formation of belief on such incorrect and vague reasons would lead the reopening of the assessment as invalid. The Hon ble Gujarat High Court in case of Mumtaz Haji Mohmad Memon vs. ITO (supra) while considering an identical issue has observed in para 10 11 as under :- 10. We are conscious that in the present case, the return filed by the assessee was not taken in scrutiny. Nevertheless, in such a case also the requirement that the Assessing Officer must have reason to believe that income chargeable to tax ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sons recorded and ignoring the relevant and correct facts available on record established that the AO has not applied his independent mind while forming the opinion. The Chandigarh Bench of the Tribunal in case of Baba Kartar Singh Dukki Educational Trust vs. ITO (supra) has also considered an identical issue and held that the AO proceeded for reopening of the assessment for non-existent and factually incorrect reasons and has not applied his mind. The Tribunal has concluded in para 19 as under :- 19. In view of the above discussion, I hold that the AO had taken an irrelevant fact into consideration and reopened the assessments on the basis of suspicion. Further more, the Assessing Officer proceeded for re-opening ..... X X X X Extracts X X X X X X X X Extracts X X X X
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