TMI Blog2015 (12) TMI 1468X X X X Extracts X X X X X X X X Extracts X X X X ..... sing Officer should have reason to believe that income chargeable to tax has escaped assessment has clearly not been satisfied. The assumption of jurisdiction on the part of the Assessing Officer by reopening assessment for the year under consideration by issuance of notice under section 148 of the Act is, therefore, without any authority of law. Resultantly, the impugned notice under section 148 of the Act cannot be sustained. - Decided in favour of assessee. - SPECIAL CIVIL APPLICATION NO.3275 of 2014 - - - Dated:- 20-10-2015 - MS. HARSHA DEVANI AND MR. A.G.URAIZEE, JJ. FOR THE PETITONER : MR RK PATEL, ADVOCATE with MR DARSHAN R PATEL, ADVOCATE FOR THE RESPONDENT : MR MR BHATT, SR. ADVOCATE with MRS MAUNA M BHATT, ADVOCATE ORAL JUDGMENT (PER : HONOURABLE MS. JUSTICE HARSHA DEVANI) 1. This petition under Article 226 of the Constitution of India is directed against the notice dated 25th March, 2013 issued by the first respondent under section 148 of the Income Tax Act, 1961 (hereinafter referred to as the Act ) seeking to reopen the assessment of the petitioner assessee for assessment year 2008-09. Having regard to the view that the court is inclined t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed, however, for the reasons that follow, it is not necessary to refer or deal with the same. 4. In response to the oral directions issued by this court, Mr. M.R. Bhatt, Senior Advocate, learned counsel for the respondents has produced the original record relating to the proceedings under section 147 of the Act for the perusal of this court. A perusal of the file shows that the Audit Officer had raised certain objections as recorded in the reasons for reopening the assessment and had called upon the Assessing Officer to submit his remarks thereon. The Assessing Officer by a communication dated 3rd June, 2011 had opined that the objection raised was based on incorrect appreciation of facts and position of law and has requested the Audit Officer to drop the said objection. By a communication dated 4th July, 2011 addressed to the Deputy Accountant General (ITRA), the second respondent had requested that the objection raised by the Audit Department be dropped. However, the Audit Department persisted with the objection whereafter, by a communication dated 5th August, 2011, the Assessing Officer once again opined that the objection was based upon incorrect appreciation of facts and po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry about the adequacy or sufficiency of the material to reach such belief is not open to be scrutinised. However, it is always open to question existence of such belief on the ground that what has been stated is not correct state of affairs existing on record. Undoubtedly, in the face of record, burden lies, and heavily lies, on the petitioner who challenges it. If the petitioner is able to demonstrate that in fact the AO did not have any reason to believe or did not hold such belief in good faith or the belief which is projected in papers is not belief held by him; in fact, the exercise of authority conferred on such person would be ultra vires the provisions of law and would be abuse of such authority. As the aforesaid decision of the Supreme Court indicates that though audit objection may serve as information, the basis of which the ITO can act, ultimate action must depend directly and solely on the formation of belief by the ITO on his own where such information passed on to him by the audit that income has escaped assessment. In the present case, by scrupulously analysing the audit objection in great detail, the AO has demonstrably shown to have held the belief prior to the is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment would be relevant for the purpose of reopening of closed assessment. It is, of course true, as held by the decisions of the apex Court in the cases of P.V.S. Beedies (P) Ltd. (supra) and Indian Eastern Newspaper Society (supra), if the audit party brings certain aspects to the notice of the AO and thereupon, the AO forms his own belief, it may still be a valid basis for reopening assessment. However, in the other line of judgment noted by us, it has clearly been held that mere opinion of the audit party cannot form the basis for the AO to reopen the closed assessment that too beyond four years from the end of relevant assessment year. 6. Thus, while it is an accepted position that the Assessing Officer is not prohibited from acting upon remarks of the Audit Department and reopening the assessment; however, it is for the Assessing Officer to determine for himself as to whether on the basis of the objections raised by the Audit Department it can be said that any income chargeable to tax has escaped assessment. It is only after he independently forms the requisite belief as contemplated under section 147 that the Assessing Officer can assume jurisdiction under section ..... X X X X Extracts X X X X X X X X Extracts X X X X
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