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2016 (4) TMI 311 - HC - Income TaxReopening of assessment - non filing of Form No.10 resolution on or before the time allowed under section 139 of the Act as per section 11(2)(a)- Held that:- In view of the clear language of sub-sections (2) and (3) of section 11 of the Act, sub-section (3) of section 11 of the Act would be applicable only in case certain funds have been set apart or accumulated in terms of the provisions of clauses (a) and (b) of sub-section (2) of section 11 of the Act. In the absence of any funds having been set apart under rule 17 of the Income Tax Rules, 1962 by filing Form No.10 in assessment years 2002-03, 2003-04, 2004-05 and 2006-07, such amount cannot be considered to be the deemed income of the petitioner after the lapse of a period of five years thereof in the assessment years under consideration. In the aforesaid premises, in the opinion of this court, on the reasons recorded by the Assessing Officer, he could not have formed the belief that income chargeable to tax has escaped assessment in the assessment years under consideration. The assumption of jurisdiction by the Assessing Officer under section 147 of the Act by issuing the impugned notices under section 148 is, therefore, without any authority of law. Consequently, the impugned notices cannot be sustained. Insofar as assessment year 2008-09 is concerned, there is an additional factor which renders the impugned notice unsustainable. As pointed out by the learned counsel for the petitioner, for assessment year 2002-03, the petitioner had filed computation showing surplus of ₹ 95,917 only and for this it had filed Form No.10. Evidently, therefore, the Assessing Officer has not properly verified the facts from the record of assessment. This court in Sagar Enterprises v. Assistant Commissioner ( 2001 (12) TMI 18 - GUJARAT High Court ) has held that when the officer concerned has taken into consideration an irrelevant fact, it cannot be said with certainty as to which factor would have weighed with him for the purpose of arriving at the belief that income chargeable to tax has escaped assessment and to what extent the decision is vitiated. The Assessing Officer, having taken into consideration facts which are contrary to the record for the purpose of forming the belief that income chargeable to tax has escaped assessment, for this reason also it cannot be said that he could have formed the belief that income chargeable to tax has escaped assessment so as to assume jurisdiction under section 147 of the Act. - Decided in favour of assessee
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