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2022 (1) TMI 421 - AT - Income TaxReopening of assessment u/s 147 - assumption of jurisdiction u/s 148 - reopening beyond the period of four years from the end of relevant assessment year - eligible reason to believe - verification of claim - assessee having rental income from various properties and the income from such properties was not disclosed by the Assessee - HELD THAT:- It is a settled position that even where an assessment has been only processed under Section 143(1) of the Act, the reopening notice must satisfy the test of having reason to believe that the income chargeable to tax has escaped assessment. The reason to believe has to be arrived at after applying one's mind to the material available and to reach a prima facie view that income chargeable to tax has escaped assessment. Mere receipt of information from any source would not by itself tantamount to reason to believe that income chargeable to tax has escaped assessment - AR has submitted that the property from which the deemed rental income the Revenue proposes to add does not belong to the assessee. When the property does not belong to the assessee, the question of taxing the deemed rental income does not arise. Revenue has not placed any material on record to demonstrate that the submission of the assessee of it not being the owner of the aforesaid properties is false/ incorrect. In the present case the AO prima facie has not done the bare necessary enquiry into the material received before he concluded that income chargeable to tax has escaped assessment. As in case ANKITA A. CHOKSEY VERSUS INCOME TAX OFFICER-19 (1) (1) & OTHERS [2019 (1) TMI 862 - BOMBAY HIGH COURT] reasons to believe that income chargeable to tax has escaped Assessment must be on correct facts. If the facts, as recorded in the reasons are not correct and the assessee points out the same in its objections, then the order on objection must deal with it and prima facie, establish that the facts stated by it in its reasons as recorded are correct. Verification of source of commodity transactions and its income - As per the reasons recorded, the AO wants to verify it. In view of the settled position of law that for a mere verification of the claim, the power of reopening of assessment cannot be exercised - As decided in INDUCTOTHERM (INDIA) PVT. LTD. [2012 (9) TMI 16 - GUJARAT HIGH COURT] For a mere verification of the claim, the power of reopening of the assessment could not be exercised and it further observed that AO under the guise of power to re-open the assessment cannot seek to undertake an undertaking a fishing or roving inquiry or seek to verify the claim as if he is the scrutiny officer. In the present case, notice for re-opening of the assessment u/s 147 of the Act is not as per the mandate of Sec.147 of the Act and therefore the re-opening is not permissible - therefore of the view that the notice issued for reopening has to be set aside and the same deserves to be quashed. - Decided in favour of assessee.
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