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TMI Blog2010 (2) TMI 931X X X X Extracts X X X X X X X X Extracts X X X X ..... arefully considered the materials available on record. 4. Briefly, the facts of the case are that the assessee is individual derives income from dalali and commission. The police authorities at Ajmer had seized cash of Rs. 6,65,000 from one person named Ashok Kumar, son of Shri Kewal Ram on November 5, 2000. The cash was requisitioned by the Director of Income-tax (Investigation)-1, Jodhpur under section 132(2A) of the Income-tax Act. Before the police authorities, Shri Ashok Kumar claimed that this cash belong to M/s. Balaji Trading Co. of which the assessee is the proprietor. The statement of Shri Radheshyam Mohanlal Maheshwari, i.e., the assessee was recorded under section 131(1A) of the Income-tax Act on November 20, 2000, wherein he admitted that the cash seized by the police authorities at Ajmer represents the profit of his undisclosed business income. The block assessment proceedings were initiated against the assessee in which the assessee offered the cash as undisclosed income. The Assessing Officer in the block assessment proceedings found purchases of the assessee unverifiable and the source of the investment in the purchases not explained. In the block assessment proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as accordingly dismissed. 6. Learned counsel for the assessee at the outset submitted that initiation of the reassessment proceedings in the matter is clearly unjustified. He has referred to the copy of the reasons for reopening of the assessments, copy of which is filed at page 7A of the paper book which reads as under : "Reg : Shri Radheshyam Mohanlal Maheshwari, Prop : Balaji Trading Co. and Maruti Enterprises, Kalupur, Ahmedabad, Assessment years : 1998-99, 1999-2000, 2000-01 and 2001-02. Reasons for reopening the assessments under section 147 of the Act. The Commissioner of Income-tax (Appeals), Ahmedabad in Appeal No. CIT(A)-VI AC Cir.2/84/03-04, dated December 11, 2003 has directed to reopen the assessments for the assessment years 1998-99, 1999-2000, 2000-01 and 2001-02 under section 147 to carry out investigations as to whether the purchases shown in these assessment years are genuine or not. Accordingly the case is reopened by issuing notice under section 147 of the Income-tax Act. Issue notices under section 147 of the Act for the assessment years 1998-99, 1999-2000, 2000-01 and 2001-02. Date : February 5, 2004. (Sd.) R. R. Meena, dated February 5, 2004, Assis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or recompute the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year) : Provided that where an assessment under sub-section (3) of section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment, for that assessment year : Provided further that the Assessing Officer may assess or reassess su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. Such facts should also be recorded in the reasons for reopening of the assessment. In the present cases, the learned Commissioner of Income-tax (Appeals) vide order dated December 11, 2003 while deleting the addition in the block assessment for bogus purchase directed the Assessing Officer to reopen the assessments for all the above assessment years and to carry out investigation as to whether the purchases shown in these assessment years are genuine or not. The Assessing Officer also reproduced the same directions in the reasons recorded for reopening of the assessments. The hon'ble Punjab and Haryana High Court in the case of Vipan Khanna v. CIT [2002] 255 ITR 220/122 Taxman 1 (Punj. & Har.) and in the case of Amrinder Singh Dhiman v. ITO [2004] 269 ITR 378/[2005] 142 Taxman 322 (Punj. & Har.) held that "reopening of the assessment is not valid for making general enquiries". The hon'ble Madras High Court also in the case of V. Jayaraman (supra) held that "even if effect is given to the orders under section 250 for reassessment, the ingredients of section 147(a) must be satisfied". The hon'ble Supreme Court in the case of Kelvinator of India Ltd. (supra) also held that "after a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lfilment of the requirements of section 147 of the Income-tax Act for initiation of the reassessment proceedings in the above cases, we are of the view that the Assessing Officer instead of complying with the requirements of law merely was swayed by the direction of the learned Commissioner of Income-tax (Appeals) in the appellate order dated December 11, 2003. Considering the above discussions, we are of the view that these are not the fit cases for initiation of the reassessment proceedings because the Assessing Officer failed to make out a case within the four corners of the provisions of section 147 of the Income-tax Act. We may also note that since the reopening of the assessments would have been done by recording the reasons only by the Assessing Officer, therefore, there was no reason for the assessee to have challenged the findings of the learned Commissioner of Income-tax (Appeals) in the appellate order dated December 11, 2003 because ultimately the appeal was decided in favour of the assessee on the merits of the block assessment matter. 12. In view of the above, we set aside the orders of the authorities below and quash the reassessment proceedings under section 147 of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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