TMI Blog2015 (10) TMI 2749X X X X Extracts X X X X X X X X Extracts X X X X ..... me for any assessment year has escaped the assessment. The powers given to the Assessing Officer under this section are very wide but are also attached with certain overriding conditions. The Assessing Officer can assume jurisdiction under the said provision if he has sufficient material before him. It is also settled law that the Assessing Officer cannot form belief on the basis of his whim and fancy and the existence of material must be real. Further, there must be nexus between the material and escapement of income. Also in the present case one of the basis for reopening is the statement of Shri Kapil Kumar recorded at the time of survey. The statement made at the time of survey does not have evidentiary value, therefore, cannot be the basis for reopening. Reliance is placed on the judgment of the hon'ble Supreme Court in the case of CIT v. S. Khader Khan Son [2013 (6) TMI 305 - SUPREME COURT] and also Paul Mathews and Sons v. CIT [2003 (2) TMI 25 - KERALA HIGH COURT]. On this basis also the reopening initiated by the Assessing Officer is held to be bad in law. - Decided in favour of assessee. - I. T. A. Nos. 904 /Chd/ 2012 (assessment year 2003-04) and 905 /Chd/ 2012 (asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent admitted categorically that these receipts represent amounts received from the patients who visited only on the day of survey, whereas cash memos were issued by that time for ₹ 20,280 only. Thus, a sum of ₹ 34,560 was found deliberately unaccounted for up to 1.45 p.m. on March 25, 2010 in the form of daily suppression of receipts. It shows that the assessee is declaring receipt to the extent of only 37 per cent. of the actual receipts and 63 per cent. have been suppressed as the assessee have been showing its receipts of ₹ 20,000 approx. per day at its sweet will and not on actual receipt basis.' From the above facts, the modus operandi of the assessee to suppress receipts is very much clear. Further, during the course of survey operations, statement of Dr.Sandeep Garg, one of the directors, was recorded in which he stated that no patient register/case register has been maintained by the assessee-company. He further stated that the assessee does not maintain any books of account at registered office of the company except cash memos issued to the patients. Even the assessee failed to produce the cash memos for the financial year 2009-10 except for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held that the Assessing Officer had definite reason to believe that the income has escaped assessment in the year concerned. He was of the view that the finding of excess cash at counter, admission by the receptionist that one zero is reduced in the register, non-availability of complete cash memos being issued only on demand and other facts discovered during the course of survey, definitely point towards scheme of tax evasion. Further, it was observed that in the statement recorded during the course of survey of Shri Kapil Kumar, a receptionist of the company, he has explained the modus operandi of mentioning charges received from the patients. Relying on the judgment of the hon'ble Supreme Court in the case of Asst. CIT v. Rajesh Jhaveri Stock Brokers P. Ltd. [2007] 291 ITR 500 (SC) to the effect that at the stage of issue of notice under section 148 of the Act, the only question to be seen is whether there was relevant material on the basis of which a reasonable person could have formed the requisite belief. The learned Commissioner of Income-tax (Appeals) confirmed the reopening so made by the Assessing Officer. 6. Aggrieved by the abovesaid order, the assessee has come ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... form on a piece of paper and no receipts are recorded in the regular books of account. On the basis of these submissions, it was prayed that reopening initiated by the Assessing Officer by issue of notice under section 148 of the Act may be held to be invalid. 9. The learned Departmental representative relied upon the orders of the Assessing Officer as well of the learned Commissioner of Income-tax (Appeals). 10. We have heard the learned representatives of both parties, perused the findings of the authorities below and considered the material available on record. The undisputed facts of the case are that the survey operations were carried out at the premises of the assessee as on March 26, 2010, i.e., relating to the assessment year 2010-11. The material found during the course of survey, whether these are loose slips or the statement recorded by the receptionist, all relate to that year only. The year under consideration before us is the assessment year 2003-04. There is no reference of any material found during the course of survey relating to the said assessment year. Before the action under section 147 of the Act can be taken for reopening the assessment, the Assessing O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment year, the Assessing Officer sought to resort to proceedings of reopening against the assessee in respect of an earlier year, he could not be said to have had reason to believe that the income chargeable to tax had escaped assessment in respect of an earlier year. 12. In other judgment cited by learned counsel for the assessee in the case of India Finance and Construction Co. P. Ltd. v. B. N. Panda, Deputy CIT [1993] 200 ITR 710 (Bom) the hon'ble Bombay High Court has held that before issuing notice under section 148 of the Act, the Assessing Officer must have definite reason to believe that some income had escaped assessment for the assessment year in question, notice issued on mere suspicion would be without jurisdiction. 13. On exactly the same factual matrix as is in the case in hand, we find that there is a judgment delivered by the hon'ble Delhi High Court in the case of CIT v. Gupta Abhushan P. Ltd. [2009] 312 ITR 166 (Delhi). In this case, it was noted that survey was conducted on March 7, 2002, while the case relates to the assessment year 1999-2000. The date of survey was subsequent to the year in question. Certain renovation expenses were not book ..... X X X X Extracts X X X X X X X X Extracts X X X X
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