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2023 (3) TMI 1415 - HC - Income TaxReopening of assessment u/s 147 - reasons to believe - as per the information received, the petitioner was engaged in reversal trade resulting in non-genuine business loss or gains - As argued the reasons recorded for re-opening were scanty and non-specific and not indicated that the transactions allegedly referred to resulted into loss or profit - HELD THAT:- When it comes to exercise of powers u/s 147 and 148 there has to be a greater thrust for necessity of recording reasons. The entire exercise of reopening hinges on the reasons recorded by the AO. It is the ‘reasons’ which weigh with him. When the concluded assessment is to be revisited with by the AO recording of reasons for exercise of such powers has to be viewed as vested rights for the assessee. While exercising powers under the Act to reopen the assessment, the AO would harbour reasons to believe that on particular set of facts, the income had escaped assessment and tax was not paid in relation to the year under consideration. All the reasons which hold good in the eye of and with the AO must be made known to the assessee. Assessee has right to refute the reasons for reassessment by filling objections. Unless the AO appropriately delineates and communicates the reasons for reassessment, right of the assessee to file objections would remain an eye-wash. Whether the reassessment powers are adverted to on objective basis, whether the element of assessment of income is noticed from the facts and whether formation of opinion by the AO is based on some relevant facts or not, could be judged provided the reasons are properly recorded and the details are given with regard to reopening of assessment that the reasons to believe with the AO must be reflected in recording of such reasons to be communicated to the assessee. The cryptic way of recording of reasons like found in the instant case, would render the exercise of powers vitiated. With such vague reasons the respondent could be said to have failed to demonstrate that there was any escapement of income chargeable to tax. He could demonstrate such element, if he gives reasons for the same. Notice issued to the petitioner u/s 148 is liable to be set aside on the aforesaid ground alone. Decided in favour of assessee.
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