TMI Blog2017 (9) TMI 588X X X X Extracts X X X X X X X X Extracts X X X X ..... nd November 2011 written by the Director (Vigilance) to the DGIT (Vigilance) does not throw any light on any material relevant to AY 2009- 10. In fact, the concluding paragraph of the said letter a request is made for reopening of the assessment for the AY 2007-08 by invoking Section 263 of the Act. This explains why that route was resorted to for AY 2007-08. This Court is therefore satisfied that the jurisdictional requirement for reopening of the assessment for AY 2009-10 has not been fulfilled in the present case. Consequently, the notice dated 29th March 2016 issued by the AO under Section 148 of the Act as well as the consequent order dated 4th July 2016 of the AO rejecting the Petitioner’s objections, are hereby quashed. - W.P. (C) No. 10507/2016 - - - Dated:- 7-9-2017 - S. MURALIDHAR PRATHIBA M. SINGH JJ. Petitioner Through: Dr. Rakesh Gupta, Mr. Somil Agarwal, Mr. Rohit Kumar Gupta, Ms. Monika Ghai, Ms. Syamalima, Advocates. Respondents Through: Mr. Rahul Kaushik, Senior Standing Counsel for the Income Tax Department. O R D E R Dr. S. Muralidhar, J.: 1. The challenge in this writ petition is to the notice dated 29th March 2016 issued by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could be conducted from the third parties. The ITO (Inv) in his report stated that the Petitioner has neither provided any justification with documentary evidence nor the details of the parties to whom the contract charges were paid. From both the above documents and the report of the ITO (Inv) it was inferred that the modus operandi of the Assessee in the AY 2009-10 is the same as was in AY 2007- 08 and 2008-09 . It was further inferred that the aforementioned sum of ₹ 2,41,79,349/- had been used by the Petitioner for non business purposes , thus concealing its true income. (iii) The third reason was that the Director General of Income Tax (DGIT) (Vigilance) by letter dated 2nd November, 2011 had also suggested that the claim of expenses made by the Petitioner would have to be examined. This was after a detailed inquiry into a complaint against the then AO of Circle 8 (1), New Delhi, who happened to be the AO of the Petitioner. 4. The AO concluded that he had reason to believe that the contractor's charges shown in the Petitioner's P L Account were bogus and the Petitioner had wilfully and knowingly concealed its particulars of income to avoid tax and that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recording of the reasons on 30th March, 2016. Secondly, he points out that the said assessment order for AY 2008-09 was in fact challenged by the Petitioner by filing an appeal before the CIT (A) and, therefore it was incorrect to say that the said order was not challenged. 9. On this issue, it requires to be noted that the settled legal position is that when a challenge is laid to the reopening of an assessment under Section 147 of the Act, the Court has to examine only the reasons recorded by the AO and nothing else. In Northern Exim Pvt. Ltd. v. Deputy Commissioner of Income Tax [2013] 357 ITR 586 (Del), this Court reiterated the well settled legal position that we have to be guided only by the reasons recorded for the assessment and not by the reasons or explanations given by the AO at a later stage in respect of notices of the assessment . After referring to a large number of decisions, this Court explained: The ratio laid down in all these cases is that, having regard to the entire scheme and purpose of the Act, the validity of the assumption of jurisdiction under Section 147 can be tested only by reference to the reasons recorded under Section 148(2) of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r AY 2008-09 may have found the entities to whom the Petitioner issued cheques to be fictitious cannot be looked into for the simple reason that it was an order passed 21 days after the reasons in the present case were recorded for re-opening of the assessment for AY 2009- 10. In any event, this will not answer one of the principal grounds urged by Dr. Gupta that the tangible material that is required to be shown for justifying the re-opening of assessment has to be relevant to the AY in question, i.e. AY 2009-10. 12. In Commissioner of Income Tax v. Gupta Abhushan (P)Ltd. [2009] 312 ITR 166 (Del), it is emphasised that information relating to one AY will not automatically become relevant for re-opening the assessment for another AY. If that would be the position, then the re-opening would be only on the basis of suspicion and not belief . This decision in fact reiterated what was earlier explained by the Bombay High Court in Ramkrishna Ramnath v. Income Tax Officer [1970] 77 ITR 995 (Bom). 13. There is no answer by the Revenue to the Petitioner s contention that the TEP pertained only to two FYs and therefore only corresponded to two AYs, i.e. AY 2007-08 and 2008- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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