2023 (3) TMI 712 - AT - Income Tax

Reopening of assessment u/s 147 - Reasons to believe - no return has been filed by the assessee - link between the information received from the Investigation Wing and the formation of reason to believe - HELD THAT:- AO grossly erred in mentioning in the column No.8(a) of the format pertaining to approval of the ld.PCIT, Ghaziabad by mentioning that no return has been filed by the assessee. It is pertinent to mention that the copy of the return reveals that the assessee did file the return with ITO-2(1), Ghaziabad and reason has been recorded by the very Income-tax Officer which shows clear nonapplication of mind by the AO.

When the AO has proceeded to initiate reassessment proceedings on the wrong premise that the assessee has not filed return of income for relevant assessment year and, in fact, the assessee did file the return of income, then, this is a clear case of non-application of mind and non-consideration of relevant material by the AO.

When the AO has not created any link between tangible material and the formation of reason to believe that income had escaped assessment, then, the information received from Investigation Wing cannot be said to be tangible material per se without further inquiry being undertaken by the AO. In the present case also the AO initiated reassessment proceedings on the wrong premise that the assessee has not filed return of income for AY 2009-10 and the AO, without verifying and creating a link between the information received from the Investigation Wing and the formation of reason to believe that income has escaped assessment, initiated reassessment proceedings u/s 147 of the Act and issued notice u/s 148 of the Act and, therefore, the issue is squarely covered in favour of the assessee