9911796707
TMI Blog2013 (7) TMI 476X X X X Extracts X X X X X X X X Extracts X X X X ..... income for the year under consideration on 28.10.2005 declaring total income of Rs.1,84,42,703/- under the provisions of the Act together with computation of income, tax audit report in Form No.3CB and 3CD and notes attaches to the return of income, copy of the annual accounts, copy of grouping of balance sheet and profit and loss account for the year ended on 31.3.2005. The case was taken up for scrutiny and the respondent called for various explanations/details from the petitioner in respect of several issues including the details of expenditure on account of Key-man insurance premium. The Assessing Officer framed assessment under section 143(3) of the Act on 10.4.2007, which came to be challenged by the petitioner before the Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sfied as regards the claim of the petitioner, had allowed the same. According to the learned counsel, though there is no discussion in respect of Key-man insurance premium in the assessment order, it is amply clear that the Assessing Officer had applied his mind to the issue in question in the light of the fact that the specific details had been called for by him in relation to the same. Inviting attention to the reasons recorded for reopening the assessment, it was pointed out that the basis for reopening is the assessment order in respect of the assessment year 2006-07 whereby, the Assessing Officer had, out of a claim of Rs.4.50 crores, allowed only Rs.34,80,000/- in respect of the petitioner's claim for Keyman insurance premium. It was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sue in question. It was submitted that in the circumstances, this is not a case of mere change of opinion inasmuch as, in the original assessment order, the Assessing Officer has not expressed any opinion in this regard. It was further submitted that despite the fact that the assessment order for assessment year 2006-07 has been set aside by the Commissioner (Appeals), it can still be the basis for forming an opinion for the purpose of reopening the assessment in respect of the assessment year in question. It was submitted that in the present case, the assessment has been reopened within a period of four years and the claim as regards Key-man Insurance Premium has not been discussed in the original assessment order and as such no opinion ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... comes to Rs.34.20 lacs as against Rs.4.50 crores claimed by assessee. Therefore, excess claim of Rs.4,15,20,000/- was not allowable as expenses for the detailed reasons discussed in assessment order of A.Y. 2006-07. Therefore, I am satisfied that the income of the assessee has escaped assessment within the meaning and as envisaged by section 147 read with explanation 2(c)(i). Notice under section 148 of the Income Tax Act issued accordingly." 6. On a bare reading of the reasons recorded, it is apparent that the formation of belief that the income has escaped assessment is based upon the assessment order for assessment year 2006-07 whereby out of a claim of Rs.4.50 crores for Key-man Insurance Premium only Rs.34,80,000/- was allowed, whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ased on vague, irrelevant and non-specific information. To that limited extent, the Court may look into the conclusion arrived at by the Assessing Officer and examine whether there was any material available on the record from which the requisite belief could be formed by the Assessing Officer and further whether that material had any rational connection or a live link for the formation of the requisite belief. (See Phool Chand Bajrang Lal v. Income-Tax Officer, (1993) 203 ITR 203). 7. In the facts of the present case, the material on which the Assessing Officer has formed the belief as regards escapement of income is the assessment order for the year 2006-07, which on the date of reopening of the assessment for the year under consideratio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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