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2015 (10) TMI 2749 - AT - Income TaxReopening of assessment - eligible reason to believe - Held that:- There is no reference of any material found during the course of survey relating to the said assessment year. Before the action under section 147 of the Act can be taken for reopening the assessment, the Assessing Officer must have reason to believe that the income chargeable to tax had escaped assessment. After perusing the reason recorded, we do not find ourselves in agreement with the Assessing Officer or the learned Commissioner of Income-tax (Appeals) that the Assessing Officer had reasons to believe that the income chargeable to tax had escaped assessment in respect of the assessment year 2003-04. Section 147 of the Act defines the power and jurisdiction of the Assessing Officer for making an assessment while section 148 of the Act provides for initiation of reopening by issue of notice. It is a trite law by now that section 147 of the Act empowers the Assessing Officer to assess or reassess the income chargeable to tax if he has reasons to believe that the income for any assessment year has escaped the assessment. The powers given to the Assessing Officer under this section are very wide but are also attached with certain overriding conditions. The Assessing Officer can assume jurisdiction under the said provision if he has sufficient material before him. It is also settled law that the Assessing Officer cannot form belief on the basis of his whim and fancy and the existence of material must be real. Further, there must be nexus between the material and escapement of income. Also in the present case one of the basis for reopening is the statement of Shri Kapil Kumar recorded at the time of survey. The statement made at the time of survey does not have evidentiary value, therefore, cannot be the basis for reopening. Reliance is placed on the judgment of the hon'ble Supreme Court in the case of CIT v. S. Khader Khan Son [2013 (6) TMI 305 - SUPREME COURT] and also Paul Mathews and Sons v. CIT [2003 (2) TMI 25 - KERALA HIGH COURT]. On this basis also the reopening initiated by the Assessing Officer is held to be bad in law. - Decided in favour of assessee.
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