TMI Blog2010 (2) TMI 931X X X X Extracts X X X X X X X X Extracts X X X X ..... e allowed and both Departmental appeals are dismissed. - IT APPEAL NOS. 833 & 834 and 1052 to 1055 (Ahd.) of 2006 - - - Dated:- 25-2-2010 - Bhavnesh Saini, A.N. Pahuja, JJ. Smt. Neeta Shah for the Appellant. A.C. Shah for the Respondent. ORDER 1. All the cross appeals are directed against different orders of the learned Commissioner of Income-tax (Appeals)-VI, Ahmedabad dated February 27, 2006 for the assessment years 1998-99. 1999-2000, 2000-01 and 2001-02. 2. In all the appeals of the assessee the initiation of reassessment proceedings under section 147 of the Income-tax Act have been challenged along with the additions on the merits on account of bogus purchases, cash credit, part gross profit addition and other disallowances of the expenditure. In the Departmental appeals, the Revenue challenged the deletion of additions on account of bogus purchases and reducing the addition by applying the gross profit rate of 20 per cent. 3. We have heard the learned representatives of both parties, perused the findings of the authorities below and very carefully considered the materials available on record. 4. Briefly, the facts of the case are that the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome-tax Appellate Tribunal, Bench "B", Ahmedabad in IT(SS)A No. 38/Ahd/2004 vide order dated July 25, 2008 dismissed the appeal of the Revenue. The Assessing Officer on the basis of the directions of the learned Commissioner of Income-tax (Appeals) reopened the assessments under section 147 of the Income-tax Act for all the above assessment years and framed the assessments under section 143/147 of the Income-tax Act and made additions on account of bogus purchases, cash credits, disallowances of expenditure, etc. vide separate assessment orders. The reopening of the assessment was challenged before the learned Commissioner of Income-tax (Appeals) along with additions on the merits. The learned Commissioner of Income-tax (Appeals) noted that the assessee has not preferred any appeal against the order of the learned Commissioner of Income-tax (Appeals) dated December 11, 2003 and his findings in paragraph 4.2 are not challenged. Therefore, the Assessing Officer was fully justified in reopening the assessments. The appeal of the assessee on the issue of reopening of the assessments was accordingly dismissed. 6. Learned counsel for the assessee at the outset submitted that init ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded in writing". Learned counsel for the assessee submitted that since in the case of the assessee, the Assessing Officer merely acted on the direction of the learned Commissioner of Income-tax (Appeals) dated December 11, 2003 and has not recorded in the reasons that income escaped assessment, these are the fit cases for quashing of the initiation of the reassessment proceedings under section 147 of the Income-tax Act. 8. On the other hand, the learned Departmental representative relied upon the orders of the authorities below and submitted that since the direction of the learned Commissioner of Income-tax (Appeals) in the block assessment order dated December 11, 2003 has not been challenged by the assessee, therefore, the Assessing Officer was justified in initiating reassessment proceedings under section 147 of the Income-tax Act. 9. We have considered the rival submissions and the material available on record. Section 147 of the Income-tax Act provides as under : "147. Income escaping assessment. If the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een underassessed ; or ( ii ) such income has been assessed at too low a rate ; or ( iii ) such income has been made the subject of excessive relief under this Act ; or ( iv ) excessive loss or depreciation allowance or any other allowance under this Act has been computed. Explanation 3. For the purpose of assessment or reassessment under this section, the Assessing Officer may assess or reassess the income in respect of any issue, which has escaped assessment, and such issue comes to his notice subsequently in the course of the proceedings under this section, notwithstanding that the reasons for such issue have not been included in the reasons recorded under sub-section (2) of section 148." 10. Section 148(2) of the Income-tax Act provides that the Assessing Officer shall before issuing any notice under this section record his reasons for doing so. For reopening of the assessment under section 147 of the Income-tax Act it was, therefore, imperative for the Assessing Officer that he should have reason to believe that any income chargeable to tax has escaped assessment for any assessment year. Such facts should also be recorded in the reasons for reopening of the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that "initiation based on opinion of the Assessing Officer of other party, i.e., lessee is 'borrowed satisfaction', not sufficient reason to believe escapement of income." 11. We may also add here that reopening of the assessment under section 147 of the Income-tax Act as per its plain language provided in the Act provides prerogative to the Assessing Officer to reopen the assessment if the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year. Even if the learned Commissioner of Income-tax (Appeals) has issued a direction in the appellate order dated December 11, 2003 to reopen the assessments, it is the prerogative of the Assessing Officer to reopen the assessment by satisfying the requirements of the law as mentioned above and shall have to record in writing, the reasons to believe that any income chargeable to tax has escaped assessment for any assessment year. However, the reasons recorded by the Assessing Officer in all the above cases do not find mention such facts and the satisfaction of the Assessing Officer for escapement of income. In the absence of the fulfilment of the requirements of section 147 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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