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2023 (11) TMI 708 - DELHI HIGH COURTReassessment proceedings u/s 147/148 - Reason to believe - increase in the source of funds from the previous AY in the form of share capital, security premium, share application money, and long-term unsecured loans without corroborating evidence - HELD THAT:- As because AO realized that the information received by him from ITO (Nahan) via letter dated 12.03.2018 concerned the preceding period, he attempted to commence reassessment proceedings under Section 147/148 of the Act by simply comparing the ‘source of funds’ reflected under various heads in the balance sheets for the preceding AY and the AY in issue. Furthermore, that there was a gap in the enquiry is evident from the following. First, the respondent/revenue emphasized the fact that information was sought from the petitioner/assessee via notice dated 20.03.2018 before it issued the impugned notice on 31.03.2018. The notice dated 20.03.2018 could not have reached the petitioner/assessee [and nothing to the contrary has been placed on record by the respondent/revenue] as concededly, it did not bear the complete address of the petitioner/assessee. Second, the AO did not even have the list of shareholders of the petitioner/assessee, as indicated in the ‘reason to believe’. AO did not have the tangible material on record that could have persuaded him to form a belief that income, otherwise chargeable to tax, had escaped assessment. The AO did not carry forward the enquiry process once he had received communication from ITO (Nahan). As noticed above, the AO did not furnish either the letter dated 12.03.2018 received from ITO (Nahan) or the relevant intimation received from the ADIT(Inv)/Unit-4(2) New Delhi, along with the document containing ‘reason to believe.’ Had the AO furnished the documents, he would have been able to reach a firmer conclusion that crossed the threshold of suspicion and conjecture. Thus we are inclined to quash the impugned notice issued to the petitioner/assessee u/s 148 - Decided in favour of assessee.
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