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2021 (3) TMI 909 - GUJARAT HIGH COURTReopening of assessment u/s 147 - validity of reasons to believe - undisclosed profit - No approval sought from the Additional Commissioner/Commissioner of Incometax for issuance of notice under section 148 - HELD THAT:- There is no live link between the information received and reasons recorded so as to enable the Assessing Officer to form a reason to believe that income has escaped assessment for AY 2011-12. On perusal of the material on record, it also appears that the Assessing Officer has nowhere found that how amount earned as profit by the petitioner and the same was not offered to tax for A.Y.201112. Therefore, the reasons recorded are only based upon the assumption and presumption. The petitioner is engaged in trading/broking of shares/ securities/ commodities including derivatives transactions and has carried out number of transactions and earned profit as well as losses with respect to them and as per Income Tax Act, loss is computed and reflected in the statement of income and after considering the materials on record, return was processed under section 143(1). On perusal of the report at Annexure R/1, it pertains to contrived losses claimed by the beneficiaries on the alleged modus operandi adopted by manipulative practices done at the NMCE. AO has failed to form his own opinion with regard to the petitioner for alleged escapement of income by merely stating that such amount pertains to profit earned for A.Y. 2011 12 though in the reasons recorded, it is mentioned for A.Y. 201011. No reference to approval sought from the Additional Commissioner/Commissioner of Incometax for issuance of notice under section 148 as provided in section 153 of the Act, 1961. Inspite of the fact that the petitioner raised the objections against the reopening of the assessment on the issue of approval from Additional Commissioner/ Commissioner of Incometax, the same is brushed aside in the impugned order rejecting the objections on the ground that such discrepancy is in nature of human error while typing. The impugned order rejecting the objections, the Assessing Officer has recorded that the mistake has happened in mostly all the cases reopened during the year because the cases were reopened on the information based and also of nonfilers which depicts that the Assessing Officer has mechanically recorded the reasons without properly appreciating the facts of the case. Taking into consideration the reasons recorded, the Assessing Officer cannot be said to have formed the reason to believe that the income has escaped assessment. - Decided in favour of assessee.
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