9911796707
TMI Blog2012 (7) TMI 160X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. The Ld. CIT(Appeals)-II, Agra has grossly erred on the facts of the case by misinterpreting the various modifications issued by District Revenue Authorities, Jhansi for the purpose of adopting circle rates and hence determining the Capital gains by taking cost of acquisition of agriculture land which is not a capital asset u/s. 2(14) of the Act. 3. The Ld. CIT (A)-II, Agra has grossly erred on the facts of the case by not giving sufficient opportunity for submitting rejoinder on the comments of the A.O." 2. Briefly, the facts of the case are that the assessee had sold certain agriculture land on 05.08.2003 for a sum of Rs. 19,50,000/-. As per the AO, the assessee had not filed any income tax return showing capital gain arising out of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment within the meaning of sec. 147 of the IT Act, 1961. Accordingly, proceedings u/s. 147 is initiated and issued notice u/s. 148 of the IT Act, 1961." 2.1 The assessee challenged the reassessment proceedings and addition on merits before the ld. CIT(A) and submissions of the assessee have been incorporated in the impugned order. It was explained that the value of land as on 01.04.1981 was higher than the consideration amount. Therefore, no return of income was filed being the income not liable for income-tax. It was explained that the reasons recorded for reopening of assessment are without date. The reasons were recorded on the basis of information received from another officer and the AO has not applied his mind to satisfy himsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which is also reproduced above. Copy of same is also filed at page 11 of the paper book. According to section 147 of the IT Act, the essential ingredient of this section has been that "if the Assessing Officer has reason to belief that any income chargeable to tax has escaped assessment in any assessment year........" Therefore, before invoking jurisdiction u/s. 147 of the IT Act, the Assessing Officer shall have reason to believe that any income chargeable to tax has escaped assessment. The AO for the reasons recorded for reopening of assessment as mentioned above has not mentioned anything in the reasons if he was having reasons to believe that income chargeable to tax has escaped assessment. He has merely received information from ITO 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nformation in a mechanical manner and put the assessee under obligation to file reply to the same. Merely because no reply was filed, the AO acted in haste and initiated proceedings u/s. 147 of the IT Act without recording satisfaction for initiation of proceedings in the matter. Hon'ble Supreme Court in the case of Sheo Nath Singh vs. Appellate Asst. Commissioner of Income-tax, 82 ITR 147 held - "The words "reason to believe" suggest that the belief must be that of an honest and reasonable person based upon reasonable grounds and that the Income-tax Officer may act on direct or circumstantial evidence but not on mere suspicion, gossip or rumour. The Income-tax Officer would be acting without jurisdiction if the reason for his belief that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment, he wrote "yes". Thereafter, the Assessing Officer reassessed the income and charged interest and levied penalty. The Commissioner (appeals) allowed relief partly but the Tribunal concluded the issue in favour of the assessees. On appeal: Held, dismissing the appeals, that the only information was that the assessee had taken a bogus entry of capital gains by paying cash along with some premium for taking a cheque for that amount. The information did not indicate the source of the capital gains which in this case were shares. There was no information which shares had been transferred and with whom the transaction had taken place. The Assessing Officer did not verify the correctness of the information received by him but merely accepte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer had not examined the information received from the survey circle before recording his own satisfaction of escaped income and initiating reassessment proceedings. The Assessing Officer had thus acted only on the basis of suspicion and it could not be said that it was based on belief that the income chargeable to tax had escaped income. The Assessing Officer had to act on the basis of "reasons to believe" and not on "reasons to suspect". The Tribunal rightly concluded that the Assessing Officer had failed to incorporate the material and his satisfaction for reopening the assessment and therefore the issuance of notice under section 148 of the Act for reassessment proceedings was not valid." 4.3 Considering the reasons for r ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
