9911796707
TMI Blog2015 (12) TMI 1674X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 was never issued prior to completion of the assessment u/s. 143(3) r.w.s. 148 of the I.T. Act, 1961. 3) The assessment order passed is ab-initio void, in as much as notice u/s. 148 of the I.T. Act, 1961 was issued in pursuance of an audit objection dated 11.2.2005 and refuted to by the Assessing Officer vide letter dated 18.10.2005 interalia stating that there was no case of escapement of income. 4) The learned lower authorities have grossly erred in disallowing Rs. 570,086/- out of total expenses claimed at Rs. 6,23,373/-. Reasons assigned for the impugned disallowance are wrong and tainted with arbitrariness. 5) Having regard to the facts of the case, provisions of law and judicial propositions, the impugned disallowances at Rs. 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led its return of income on 3.10.2003, showing income before set off of brought forward unabsorbed depreciation allowance at Rs. 6,12,417/- and after set off of brought forward unabsorbed depreciation allowance at nil. Tax was levied, however, on the basis of provisions contained in section 115JA of the Act. An objection was raised by the ITRAO on 11.2.2005, which was replied to by the Assessing Officer on 18.10.2005. Thereafter a notice u/s. 148 of the I.T. Act was issued on 19.1.2007 i.e. before the expiry of four years period. It was further argued that between the date of filing of return of income i.e. 2.10.2003 and issuance of notice u/s. 148 of the Act on 19.1.2007, no new facts or material came in the possession of the Assessing Off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. The Assessing Officer has recorded his satisfaction in the order sheet on 19.1.2007. It was insisted that significant condition for reopening the case is that the Assessing Officer must be satisfied that the income has escaped assessment. In the instant case prior to assessment u/s. 148 dated 27.11.2007 there was no assessment order passed in the present case. Therefore after recording satisfaction, the Assessing Officer has proceeded against the assessee. 5. We have considered the rival submissions and perused the record. We are of the considered view that the controversy revolves around the basic question of reopening with regard to income escaping assessment. In this connection, provisions of section 147/148 of the Act are very mater ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tire material was before the Assessing Officer and all those facts were disclosed before the Assessing Officer i.e. on 3.10.2003 itself and there is no explanation on the part of the Assessing Officer as to why it take approximately four years to issue notice u/s. 148 of the Act and more particularly when there was no new tangible material in formation of belief. After amendment in the Act w.e.f.1989, only one condition remains viz., reasons to believe that income has escaped assessment has to be recorded in writing i.e. there must be 'tangible material' for the formation of the belief. Hence, after April 1, 1989 the Assessing Officer has power to reopen the assessment, provided there is "tangible material" to come to the conclusion that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eason to believe that there was concealment of income - whether since basis for reopening was essentially product of 'perusal of assessment records', issue of notice under section 148, was not proper - held, (para 10) in favour of the assessee".
7. Therefore considering the totality of the facts, we hold that the reopening of assessment in the present case is bad in law hence we decide the issue of reassessment and accept ground Nos. 1 to 3 of additional grounds raised by the assessee.
8. Since the issue of reassessment is decided as above, there is no need to adjudicate the other grounds of appeal.
9. In the result, appeal filed by the assessee is allowed.
Order has been pronounced in the Open Court on 16.12.2015. X X X X Extracts X X X X X X X X Extracts X X X X
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