TMI Blog2015 (12) TMI 985X X X X Extracts X X X X X X X X Extracts X X X X ..... aped assessment. What seems to have been overlooked by the CIT (A) as well as the ITAT is that the original assessment was framed after detailed questionnaires were sent to the Assessee and replies furnished by him thereto giving the details of all the donors as well as their affidavits. These were examined by the AO. The mere fact that the AO may not have mentioned in the assessment order that the above exercise was undertaken need not mean that he did not pay attention to the materials before him. There was no warrant for the ITAT to have drawn such presumption. In fact the affidavits of the donors coupled with the confirmation letters of the Bank, as noted hereinabove, were materials touching upon the aspects of genuineness of the identity of the donors. Unless there was material which controverted the said documents produced by the Assessee in the form of the report of the FTD, it could not be said that there was any adverse material which could justify the formation of ‘reasons of believe’ within the meaning of Section 147/148 of the Act for reopening the assessment. - Decided in favour of assessee. - ITA 33/2004 - - - Dated:- 14-12-2015 - S. Muralidhar And Vibhu Bakhru, JJ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... persons. 4. Gifts whenever received have been declared as per requirement of the law. 5. As far as I know they come and stay with their friends and relations whose particulars I have never asked for. 6. These are not known to me. As far as their particulars are concerned I have got no records. 7. They do not stay with me. 6. The foreign donors had also submitted affidavits before the Assessing Officer ( AO ). Harjinder Singh, resident of Darmstadt, Germany confirmed that he had gifted a sum of ₹ 3,25,000 to the Assessee out of natural love and affection on different dates. This was an affidavit dated 27th December 1993. A letter of confirmation from Deutsche Bank, New Delhi Branch addressed to Vijaya Bank, Bhikaji Cama Place, New Delhi with whom the Assessee had an account confirming the clearance of the cheques issued to the Assessee in his favour from the NRE account of Harjinder Singh was also submitted. There is also an affidavit of Bajrang Bahadur Khare, resident of Nirestein, Germany dated 6th January 1996 regarding gift of ₹ 90,000 in favour of the Assessee to the NRE account maintained by him. The affidavit of Mr. Praveen Kumar Rai, resi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mber 1998 it was inter alia noted by the AO as under: Further the Assessee had during the year under consideration received foreign gifts amounting to ₹ 22,55,000 in his name and in the names of Anil Khosla, Rakesh Khosla, Yogesh Khosla and Virendra Khosla. It is also seen that during the AY 93-94, he had received foreign gifts amounting to ₹ 6,75,000. Enquiries reveal that Shri Khosla is laundering his black money through these NRI gifts and donors are not even remotely related to him. I am therefore satisfied that the income already assessed is under assessed and the income has escaped assessment. Since I am satisfied that this is fit case of understatement and the income has escaped assessment, I seek the approval of DCIT for reopening the case under Sections 147 and for issue of notice under Section 148. 11. The Assessee did point out that all the information in his possession had already been disclosed by him during the original assessment proceeding and that unless some new information had been received by the AO regarding the NRI gifts, he would not file any further details. The CIT (A), however, viewed that as an attempt to block further investig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... left it open to the Assessee to challenge the addition in further appeals to the Commissioner of Income Tax (Appeals) and the Tribunal. 14. The ITAT negatived the plea that the reopening could have been made only on the receipt of adverse material from the FTD. ITAT held that a mistake committed by one Assessing Officer cannot be perpetrated and in case the office note is in direct conflict with a legal provision it cannot bind the successor Assessing Officer, who if he feels that an item of income had escaped assessment, then he bound to act with reference to a provision of law and not allow the proceedings to lapse only because the report of the FTD as in the present case is not receive. 15. This Court has heard the submissions of Dr. Rakesh Gupta, learned counsel for the Assessee as well as Mr. Rohit Madan, learned Senior standing counsel for the Revenue. 16. The reasons for reopening the assessment have been set out in an office note which has been extracted in para 28 of the impugned order of the ITAT. This office note was apparently prepared by the AO at the time of finalizing the initial assessment. It reads as under: Office Note The assessment is comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s there was material which controverted the said documents produced by the Assessee in the form of the report of the FTD, it could not be said that there was any adverse material which could justify the formation of reasons of believe within the meaning of Section 147/148 of the Act for reopening the assessment. 19. This was a case where the original assessment was completed under Section 143 (3). In other words there was a complete scrutiny of the accounts and all the affidavits of the donors furnished by the Assessee pursuant to the questionnaires issued to him by the AO. In the absence of any adverse material, the reopening of the assessment was at best due to change of opinion of the AO that some income had escaped assessment. This was impermissible under Section 147 of the Act. 20. As noted by the decision of this court in CIT v. Multiplex Trading Industrial Co. Ltd. (decision dated 22nd September 2015 in ITA 356/2013), it would be impermissible for the AO to reopen the assessment unless the AO, on the basis of credible and tangible material, which was not in his possession during the initial assessment, believes that income of the Assessee has escaped assessment. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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