TMI Blog2017 (1) TMI 779X X X X Extracts X X X X X X X X Extracts X X X X ..... on this count. In the absence of the said jurisdictional fact renders the reopening 'coram non judice' and the assessment 'null' in the eyes of law. We also find that the AO is under obligation to dispose of the objection raised by the assessee for the reopening of the case under section 147 of the Act by way of speaking order in terms of the Hon’ble Supreme Court in the case of GKN Driveshafts (India) Ltd v. Income Tax Officer (2002 (11) TMI 7 - SUPREME Court ). But we find that the AO failed to pass a speaking order on the objections raised by the assessee to the reopening of the assessment. The AO assumed jurisdiction in the instant case on wrong assumption of facts. In view of above, we are of the view that AO has erroneously usurped jurisdiction which law does not permit him to do on the reasons given above, so the entire action of AO is ab-initio void and is quashed. - Decided in favour of assessee - ITA No. 215-218/Kol /2016 - - - Dated:- 11-1-2017 - Shri A.T.Varkey, Judicial Member And Shri Waseem Ahmed, Accountant Member By Assessee : Shri B. Chakraborty, AR By Revenue : Shri Pinaki Mukherjee, JCIT-SR-DR ORDER Per Waseem Ahmed, Accountant Member ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n which is placed on page 60 of the paper book with sole purpose of claiming the refund of the TDS. Even the income corresponding to TDS was not shown in the income tax return filed by the assessee. In this regard the ld. AR further submitted that the income corresponding to TDS was duly shown in the hands of 9 deities/Idols return which are placed on pages 51 to 69 of the paper book. On the other hand the ld. DR vehemently supported the order of authorities below. 5. We have heard the rival contentions and perused the materials available on record. It is well settled in law that reasons, as recorded for reopening the reassessment, are to be examined on a standalone basis. Nothing can neither be added to the reasons so recorded nor anything can be deleted from the reasons so recorded. The Hon'ble Bombay High Court, in the case of Hindustan Lever Ltd. vs. R.B. Wadkar [(2004) 268 ITR 332], has, inter alia, observed that : ..........It is needless to mention that the reasons are required to be read as they were recorded by the AO. No substitution or deletion is permissible. No additions can be made to those reasons. No inference can be allowed to be drawn on the basis o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 76) 103 ITR 437] that, ......the reasons for the formation of the belief must have rational connection with or relevant bearing on the formation of the belief. Rational connection postulates that there must be a direct nexus or live link between the material coming to the notice of the ITO and the formation of this belief that there has been escapement of the income of the assessee from assessment in the particular year because of his failure to disclose fully and truly all material facts. It is no doubt true that the Court cannot go into sufficiency or adequacy of the material and substitute its own opinion for that of the ITO on the point as to whether action should be initiated for reopening assessment. At the same time we have to bear in mind that it is not any and every material, howsoever vague and indefinite or distant, remote and farfetched, which would warrant the formation of the belief relating to escapement of the income of the assessee from assessment. 6.2 Similarly in CIT vs. Kelvinator of India Ltd reported in 320 ITR 561, the Full Bench of Hon'ble Supreme Court held as under :- It is a well settled principle of interpretation of statute that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it was noted by the apex court that the expression reason to believe in section 147 does not mean purely a subjective satisfaction on the part of the Assessing Officer, the belief must be held in good faith ; it cannot be merely a pretence. It is open to the court to examine whether the reasons for the belief have a rational nexus or a relevant bearing to the formation of the belief and are not extraneous or irrelevant for the purpose of the section. To that limited extent, the action of the Assessing Officer in initiating proceedings under section 147can be challenged in a court of law. 6.3 We are therefore of the opinion that section 147 of the Act does not postulate conferment of power upon the Assessing Officer to initiate reassessment proceeding upon his mere change of opinion. It is necessary to examine whether there was any reason to believe to have had such an exercise. The term reason to believe cannot be considered or evaluated in a water tight compartment and scope and applicability may vary from case to case, depending upon the facts and circumstances. The power under sections 147 / 148 comes into existence if he had reason to believe that income has escaped ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so seen that the assessee derives income from rent and interest from FD from banks but the expense claimed are purely personal in nature and deduction are not as per section 57 of the IT Act in the case of income from other sources. Page 4 of AO order On perusal of the reasons to believe we find that the case was reopened under section 147 of the Act on account of two reasons. Firstly the assessee claimed exemption under section 11 of the Act without having registration u/s 12A of the Act. Secondly assessee has claimed personal expenses against the income of other sources which are not allowable under section 57 of the Act. However, on perusal of income tax return we find the fact is that the assessee is not registered u/s 12A of the Act and no exemption u/s 11 of the Act was claimed. Similarly, we find that no expense against the income of other sources was claimed by the assessee and consequently no question of claiming personal expense arises. The fact as emerged from the records is that assessee has just shown the TDS deducted in the name of the assessee in its return which is placed on page 60 of the paper book with sole purpose of claiming the refund of the TDS. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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