TMI Blog2009 (10) TMI 904X X X X Extracts X X X X X X X X Extracts X X X X ..... was discharged by the appellant by way of filing of copy of bill and receipt issued by the said party and also by filing of copies of correspondence between the appellant and the said party. F. The learned CIT(A) has erred in law in upholding the chargeability of interest under s. 234B, whereas that appellant was not liable to pay advance tax under s. 208 and as such no interest under s. 234B was chargeable. 3. Thereafter the assessee filed an application dt. 5th Jan., 2009 raising four additional grounds i.e., (g), (h), (i) and (j), which are as under : (g) The notice issued under s. 147 is illegal, bad in law and without unjustified (sic) and the assessment passed under s. 143(3) r/w s. 147 with assessee is illegal and bad in law. (h) As per the reason provided to the appellant, no reason to believe was formed by the AO prior to issuance of notice under s. 148. (i) The reasons to believe are illegal and bad in law as no escaped income is specified in the reasons and it is only pretence to issue notice under s. 148. (j) No reasons were recorded prior to the issuance of notice under s. 148 and as such the notice under s. 148 is illegal, bad in law and without j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s was issued to the assessee. The said intimation under s. 143(1) was later rectified under s. 154 on 11th Dec., 2002 for the purpose of granting credit for TDS claimed by the assessee. 9. On 29th March, 2004, the case was reopened by issuance of notice under s. 148 on the ground that it had come to the notice of the AO that the assessee had disposed of business assets consisting of four industrial units during the relevant previous year. The assessee vide letter dt. 30th Sept., 2004 challenged the validity of reopening of the proceedings under s. 147 but the AO did not agree to the submissions made with reference to Expln. 2(b) to s. 147 and came to the conclusion that because the assessment had been completed under s. 143(1) and that as per the Explanation, no assessment had been made and as such the reopening was justified. Thereafter assessment was completed on an income of ₹ 31,26,26,750 without setting off the carried forward losses, which is in fact less than the returned gross total income. The assessee preferred appeal before the CIT(A). The CIT(A) also confirmed the action of the AO in respect to reopening of the assessment. On merits the appeal was allowed in pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o fresh material or information on which basis the AO could have formed the belief that income has escaped assessment. All the details were filed along with return. The assessee has shown the receipts as revenue receipts whereas the AO has treated the receipts as capital receipts liable for taxation. Attention of the Bench was drawn on the copy of the computation filed along with the original return. It was further submitted that in respect of deduction, all details were appended along with the return; therefore, there was no material with the AO to form a belief that any income has escaped assessment. Reliance was placed on the decision in the case of Asstt. CIT vs. O.P. Chawla (2008) 116 TTJ (Del)(TM) 755: (2008) 114 ITD 69(Del)(TM) and in the case of Aipita Marketing (P) Ltd. vs. ITO (2008) 21 SOT 302(Mumbai). 10.3 On the other hand, the learned Departmental Representative stated that there was sufficient material with the AO to reopen the assessment. The word 'likely' mentioned in the reasons is enough to form an opinion that any income has escaped assessment. Prima facie the AO was of the view that the amount of ₹ 40 lakhs received as subsidy is liable to be t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has escaped assessment for asst. yr. 1999-2000; therefore, he issued notice under s. 148 dt. 29th March, 2004. 13. It is further seen that during the course of reassessment proceedings no such addition has been made by the AO on account of capital subsidy received in respect of the business in the books of account. Since no addition on the basis of reasons recorded has been made by the AO; therefore, in view of the decision of the Hon'ble Rajasthan High Court in the case of Shri Ram Singh (supra) the reassessment has to be quashed. The Hon'ble Court has held that : Once the AO came to the conclusion that the income in respect to which he had entertained 'reason to believe' to have escaped assessment was found to have been explained, his jurisdiction came to stop at that, and he did not continue to possess jurisdiction to put any other income, which subsequently came to his notice, in the course of reassessment proceedings, which were found by him, to have escaped assessment. 14. While holding so, the Hon'ble Rajasthan High Court has taken into consideration the decision of the Hon'ble Punjab Haryana High Court in the case of CIT vs. Atlas Cycle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 19. Similar view has been expressed by the Jaipur Bench of the Tribunal in the case of Heera Lal (supra). 20. Ratio of these decisions are squarely applicable on the facts of the present case also as in the present case, the AO even was not having any belief that any income has escaped as he was under suspicion that if slump sale is taken into consideration then it is likely to increase the taxability of the assessee. The reason does not, in fact, indicate any prima facie belief for escaping assessment; therefore, we hold that there was no material with the AO to form a prima facie belief that any income has escaped assessment. 21. We also find weight in the contention of the learned counsel of the assessee that there was no independent opinion of the AO to form a belief that any income has escaped as he just followed the instructions of his superior and the instructions which were sent by Addl. CIT were made part of his reasons and on the basis of those instructions only the assessment was reopened. Therefore, we hold that when the AO has not applied his mind independently that any income has escaped assessment, reopening of the assessment was bad in law. Therefore, for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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