Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2022 (5) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (5) TMI 839 - HC - Income TaxReopening of assessment u/s 147 - eligibility of reasons to believe - “tangible material” and “reasons must have a live link with the formation of the belief” - unexplained cash deposits in bank account - HELD THAT:- After the assessing officer had earlier made assessment for the same assessment year and accepted the explanation of the petitioner regarding cash deposits in bank, reassessment proceedings for the alleged escapement of the income from assessment to tax on the ground of cash deposits in bank which were earlier considered by the assessing officer in regular assessment proceedings, would amount to “change of opinion”. Since the assessing officer, during the course of the regular assessment proceedings, consciously applied his mind to the cash deposits in bank by the petitioner, then initiation of the reassessment proceedings on the same set of facts would tantamount to “change of opinion”. Therefore, the assessing officer could not assume jurisdiction to initiate reassessment proceeding in the facts and circumstances of the present case. Apart from above, “reason to believe” recorded by the assessing officer was neither bonafide nor based upon reasonable ground. It was based on vague feeling that there might have been some escapement of income from assessment. Therefore, reason to believe recorded by the Assessing Officer could not give jurisdiction to the assessing officer to issue notice u/s 148. The stand taken by the respondents in the counter affidavit dated 25.04.2022 reveals that the case of the petitioner was selected for reassessment under Section 147/148 on the basis of CBDT Circular dated 04.03.2021 being “potential case” for taking action under Section 148 - AO has blindly applied the aforesaid Circular of the CBDT, without looking into the facts of the present case and in complete ignorance of the direction of the CBDT in paragraph 3 of the said Circular. In paragraph 3 of aforesaid Circular the CBDT has clarified that action under Section 148 of the Act shall be taken by the assessing Officer in respect of the specified categories of cases after forming a reasonable belief that income chargeable to tax has escaped assessment. Thus “reason to believe” recorded by the AO for issuing the impugned notice under section 148 blindly applying the Circular of CBDT dated 04.03.2021 and without forming reasonable belief that income chargeable to tax has escaped assessment, cannot authorise the AO to assume jurisdiction to issue notice to the petitioner under Section 148. There was no material before the AO to hold that the cash deposited by the petitioner in Bank during the Assessment Year in question has escaped assessment to tax, inasmuch as , AO has abruptly and without recording any reason has held Rs. 38,83,000/- as undisclosed income for Assessment Year 2017-18. There is no whisper in the impugned reassessment order as to how the AO has arrived at the aforesaid amount as undisclosed income and that how the aforesaid amount represents undisclosed income of the petitioner/assessee. Thus the reassessment proceeding initiated by the AO against the petitioner for the AY 2017-18 was not only without jurisdiction but also it was abuse of power - Decided in favour of assessee.
|