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2019 (8) TMI 894 - HC - Income TaxReopening of assessment u/s 147 - validity of reasons to believe - original return filed was accepted without any scrutiny - HELD THAT:- A plain look at the reasons so assigned would confirm that no tangible material was in possession of the AO which could constitute any reasons which led to a belief that any part of income chargeable to tax had escaped assessment rather it is in search of such tangible material that the proceedings had been reopened. Income Tax Officer fairly mentions in the ‘reasons’ so supplied that the assessee had not produced certain evidences in support of agricultural income and in absence of which the claim towards agricultural income could not be substantiated. We completely fail to appreciate as to how such admission by the AO regarding absence of material, could lead to a formation of belief that the disclosure was incorrect and chargeable to tax u/s147. In view of the position settled by the Supreme Court in the case of Kelvinator of India [2010 (1) TMI 11 - SUPREME COURT] after taking note of the transitory change in Section 147, the legal position as to the prerequisites for such exercise, has not undergone a change and which is that, there had to be tangible material at the disposal of the AO for reopening of such proceedings and which power cannot be exercised for initiating a roving enquiry. There was no tangible material in possession of the AO for formation of belief of escaped income chargeable to tax. In view of the clear fact situation available on the record where such reopening is simply founded on the advisory dated 10.03.2016 issued by the department and where the reasons so present for the formation of belief is not resting on any tangible material, in possession of AO as confirmed from the discussions above, in our opinion, the entire exercise is illegal and dehors the provisions of Section 147/148. Since the entire exercise is held de hors the statutory prescriptions, we do not consider it necessary to express our opinion on the expanded scope of Explanation 3 attached to Section 147 and leave it open for discussion in an appropriate case. - Decided in favour of assessee.
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