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2016 (9) TMI 709 - AT - Income TaxReopening of assessment - transfer envisaged under section 2(47) has not taken place by virtue of such impugned development agreement - Validity of notice - notice issued in the name of HUF - Held that:- It is the case of the assessee that the notice under section 148 vesting jurisdiction with the Assessing Officer has been addressed to the HUF entity namely Shri Dnyaneshwar Govind Kalbhor (HUF) whereas the PAN Number mentioned in the notice pertains to the Dnyaneshwar Govind Kalbhor obtained in his individual capacity. We also note the contention of the Assessee that the entire basis to proceed for reassessment is founded upon the return of income belonging to the Individual. We observe that the contention put up on behalf of the assessee that the HUF was not in existence at all during the relevant assessment year 2007-08 and no return of income was filed by the HUF at all either before the initiation of reassessment proceedings or subsequent thereto remains un-rebutted. Further, the reasons have been recorded under section 148(2) in the name of the Individual ‘Shri Dnyaneshwar Govind Kalbhor’ whereas the notice has been issued in the name of HUF i.e. ‘Shri Dnyaneshwar Govind Kalbhor (HUF)’. The fact of non existence of HUF is paramount and strikes to the very root of purported jurisdiction sought to be acquired by the AO under S. 147 of the Act. In the background of these discernible facts, it is manifest that the notice issued under section 148 purporting to grant jurisdiction to the Assessing Officer is void ab initio and bad in law. Consequent order passed by the Assessing Officer without jurisdiction thus is a nullity. Assessing Officer has nowhere indicated the quantum of income which has escaped or is likely to have escaped assessment. Thus, the entire process so initiated appears to be vague and listless. The formation of ‘reason to believe’ is expected to be qua the quantum of income that has escaped assessment on prima facie consideration of relevant material. The escapement in generic terms stated to be in millions without formulating any belief thereon is bizarre & inexplicable. On this ground also, the action of the Assessing Officer in issuing notice under section 147 cannot be approved. Needless to say, the assessing officer does not enjoy unbridled or sweeping powers in the matter of reopening an assessment. The provisions of section 147 are structured with inbuilt safeguards and requirements of the provision need to be strictly complied with. From the recorded reasons, we may note that while purported sale proceeds of ₹ 5,76,15,000/- is referred to by the Assessing Officer, the corresponding cost of acquisition of property which is germane to determination capital gain allegedly escaped has not been referred to at all. Apparently, the Assessing officer has pre-supposed the existence of capital gains without acquiring objective knowledge about the cost of acquisition of assets. In the absence of cost of acquisition available, it is nearly impossible to visualize with some degree of certainty as to whether such transaction has resulted in any gain at the first place or not to allege escapement thereof. Thus, the action of the AO is marred on this score also. - Decided in favour of assessee
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