2021 (11) TMI 853 - AT - Income Tax

Validity of reopening of assessment u/s 147 - as argued notice u/s 143(2) was not properly served to the assessee - bogus purchases - HELD THAT:- As in the assessee's case, under the guise of reopening of the assessment, the AO wants to have a roving inquiry ; as observed hereinabove. Even as per the AO in the reasons recorded, has specially mentioned that for the purpose of verification of the claim, it is necessary to reopen the assessment. Under the circumstances, it cannot be said that the AO had any tangible material to form an opinion that the income chargeable to tax has escaped the assessment. Under the circumstances, the impugned action of reopening of the assessment in exercise of power under section 148 of the Income-tax Act for the reasons recorded hereinabove cannot be sustained.

As in the assessee's case, the Assessing Officer has initiated proceeding of reopening on the facts that the assessee had not filed return of income and provision of section 147(b) is also not applicable for reopening of assessment proceeding - However, these details are factually incorrect. The assessee had filed his return of income on September 18, 2007 and duly acknowledged by the Assessing Officer in para No. 2 of the assessment order. As the return is originally filed by the assessee and no assessment was made earlier therefore, the assessee's case falls in section 147(b) of the Act. Thus, the case was reopened on incorrect fact which shows non-application of mind by the learned Assessing Officer. Hence, the proceeding is itself bad in law. See RMG POLYVINYL (I) LTD. [2017 (7) TMI 371 - DELHI HIGH COURT].

Thus reasons recorded by the Assessing Officer suffer from an infirmity of being misconceived in law and, therefore, initiation of proceeding thereupon is bad in law. - Decided in favour of assessee.