TMI Blog2019 (2) TMI 813X X X X Extracts X X X X X X X X Extracts X X X X ..... roceedings u/s. 143(3) r.w.s. 147 of the Income Tax Act, 1961; in short the Act . Heard both the parties. Case file perused. 2. I advert to assessee s former substantive ground challenging validity of impugned re-opening. It transpires during the course of hearing that Assessing Officer had recorded the following sole reason of re-opening as under:- NAVNEET GOENKA 18, SIR HARIRAMGOENKA STREET, KOLKATA-700 007 PAN: AKDPG 4048D : AY 2009-10 No return filed for AY 2009-10. Information in possession gathered that the assessee had substantial income on account of receipt against which tax was deducted. As the assessee during the year in question had income liable to tax but no return has been filed. I have reason to believe that income escape assessment on the part of the assessee to disclose a true and correct return of income. As the assessee did not file any return of income, I consider this a fit case for invocation of section 147. Issue notice u/s.148 3. Learned Departmental Representative fails to dispute that the Assessing Officer s above recorded reasoning does not even remotely indicate as to the assessee s income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... absence of any reasons for reopening having been recorded prior to reopening of assessment, the reassessment proceedings fail for this short reason alone. Hon'ble Bombay High Court, in the case of Prashant S. Joshi vs. ITO [(2010) 230 CTR (Born) 232.] has observed: The AO must have reasons to believe that such is the case (i.e. any income chargeable to tax has escaped assessment for a particular year) before he proceeds to issue notice under s. 147 . In other words, when no reasons are recorded for reopening the assessment prior to issuance of notice, the reassessment proceedings must fail for that reason alone. However, for the reasons we will set out now, the conclusions will be no different even if it is presumed that this communication, extracts from which are reproduced before, only conveys the reasons already recorded prior to issuance of notice. 7. It is well settled in law that reasons, as recorded for reopening the reassessment, are to be examined on a standalone basis. Nothing can be added to the reasons so recorded, nor anything can be deleted from the reasons so recorded. Hon'ble Bombay High Court, in the case of Hindustan Lever Ltd. vs. R.B. Wadkar [(20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to be some kind of a cause and effect relationship between reasons recorded and the income escaping assessment. While dealing with this aspect of the matter, it is useful to bear in mind the following observations made by Hon'ble Supreme Court in the case of lTO Vs Lakhmani Mewal Das [(1976) 103 ITR 437], 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 bel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g to do with reopening of assessment and this decision cannot, therefore, be taken as an authority on the legal issue which did not even come up for specific adjudication before Their Lordships. As for her reliance on Hon ble Supreme Court s judgment in the case of Phool Chand Bajrang Lal Vs ITO [(1993) 203 ITR 456], that was case in which Their Lordships concluded that the AO rightly initiated the reassessment proceedings on the basis of subsequent information, which was specific relevant and reliable, and after recording the reasons for formation of his own belief that in the original assessment proceedings, the assessee had not disclosed the material facts truly and fully and, therefore, income chargeable to tax had escaped assessment and we are unable to see anything on the facts of the present case which are materially similar to the facts of the said case. As regards her reliance on the decision of a coordinate bench in the case of Mithila Credit Services Limited Vs ITO (ITA No. 1078/Del/2013; order dated 23.5.2014), it is important to bear in mind the fact that it was a case in which the Assessing Officer had reopened the assessment on the basis of receipt of information f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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