TMI Blog2004 (6) TMI 281X X X X Extracts X X X X X X X X Extracts X X X X ..... sel for the assessee submitted that before issuing notice under s. 148 the AO did not record reasons to justify the issuance of notice under s. 148. He further submitted that there is no application of mind by the AO for initiation of proceedings. The learned counsel also contended that during the assessment proceedings reasons were not supplied by the AO which were later on supplied during the course of appellate proceedings before the learned CIT(A). The learned counsel made reference to the reasons recorded by the AO and submitted that on the perusal of the order-sheet of the AO it is not made out as to on what basis he had reason to believe that the income of the assessee had escaped assessment. According to learned counsel, it appeared ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or reopening the assessment were not communicated or supplied to the assessee. In view of this position this argument carries no force. 7. The emphatic contention of the learned counsel was that reasons recorded by the AO cannot justify a valid initiation of proceedings for reassessment because in the reasons recorded the AO has not recorded any finding that the assessee had concealed particulars of its income or its income had escaped assessment. For proper analysis and appreciation of the issue we deem it necessary to reproduce the reasons recorded which are as under: "An intimation has been received from Asstt. CIT, Company Circle 3(2), New Delhi, wherein it has been stated that M/s RRB Securities Ltd. has invested a sum of Rs. 1,20, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imself did not make any attempt to investigate the facts correctly before initiating proceedings. As mentioned in the order of learned first appellate authority, the version of the assessee was that investment of Rs. 1,20,000 in the shares of M/s Merrygold Investment Ltd. was duly recorded in the books of account and was verified to the AO s satisfaction. In any case, the reopening only for the purpose of verification was not justifiable. 10. The other reason for reopening was that the assessee s claim of exemption of capital gain of Rs. 1,24,66,883 under s. 47(iv) required verification. Again, this was not adequate and sufficient basis for initiating proceedings under s. 147 or for issuance of notice under s. 148. In view of the above, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... misplaced and instead of this the AO should have mentioned "that due to incorrect claim of the assessee under an incorrect head, income has been underassessed". He has further observed that "in fact the words require verification should be substituted with the words "is incorrect/not proper"". Thus, the learned CIT(A) tried to justify the order of the AO by substituting the words which course is not permissible to the appellate authority. The reasons are to be recorded by the AO for initiating proceedings under s. 147/148 and no superior authority can substitute the reasons so recorded by him. In our considered opinion, therefore, the learned CIT(A) was not justified in upholding the order of the AO by substituting the words or sentences ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
