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TMI Blog2019 (2) TMI 1196X X X X Extracts X X X X X X X X Extracts X X X X ..... id, hence failed to decide the issue to receipt of share application money/share capital/share premium treated as cash credit by the assessing officer on merits. (iii) The appellant prays to leave, to add, to amend and/or to alter any of the grounds of appeal, if need be. 2. Brief facts of the case are that the assessee is engaged in the business of manufacturing, processing and dealing in civil items and job works, filed its return of income for Assessment Year 2009-10 on 31st March 2010 declaring taxable income at Rs.(-) 33230/-. The return of income was processed under section 143(1) of the Act. The assessment was reopened under section 147 on 29th March 2014. Accordingly, notice under section 148 was issued to the assessee on 29th March 2014. The assessee vide its letter dated November 2014 furnish the copy of acknowledgement of return filed earlier on 31st March 2010. The assessee requested for supply of reasons recorded. The following reasons were recorded by the Assessing Officer: "From the records, it is seen that the assessee is in receipt of huge share premium to Rs. 1,33,77,000/- during the financial year 2008-09 relevant to assessment year 2009-10. As there was no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The assessee filed its reply and contended that section 68 is not applicable in the present case. The assessee filed its detail explanation with regard to source and nature of the proceed from the issue of share and submitted various evidences. The contention of assessee was not accepted by the assessing officer. The Assessing Officer made the addition of entire amount under section 68 of the Act. On appeal before the Ld. Commissioner (Appeals), the reopening was held as invalid. The Ld. Commissioner (Appeals) held that the basic requirement of reopening of the assessment i.e "reason to believe" is not fulfilled at the time of recording the reasons for reopening. Since reopening was held as invalid, therefore the other grounds of appeal raised by assessee was not adjudicated by Ld. Commissioner (Appeals). Thus, aggrieved by the order of Ld. Commissioner (Appeals) the revenue has filed the present appeal before us. On service of notice, the assessee has raised Cross Objection for not adjudicating the grounds of appeal by Ld. Commissioner (Appeals). 5. We have heard the learned DR for the revenue and learned AR of the assessee and perused the material available on record. We have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 2009-10. The assessment was processed under section 143(1). The assessment was reopened on 29.03.2014 without four year from the end of relevant Assessment Year. We have noted that the Assessing Officer nowhere mentioned in the reasons recorded that any tangible material either from assessment record or from other source has come in the notice of Assessing Officer for his reason to believe that any income has escape assessment. Therefore, the basic requirement of reopening of the assessee i.e. reason to believe was not fulfilled at the time of recording the reasons of reopening. 8. The Hon'ble Bombay High Court in case of NIVI Trading Ltd. (supra) held as under: "25. .......The principal condition for issuance of notice is to be found in section of the proceedings under this section, or re-compute the loss or the depreciation allowance or any other allowance, as the case may be. In the present case, the assessment. All that the Revenue desires is verification of certain details and pertaining to the gift. That is not founded on the belief that any income which necessary. That belief is not recorded and which alone would enable the Assessing Officer to proceed. Thus, the reason ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not disclose that the Assessing Officer, in fact, had reasons to believe that any income had escaped assessment. It is not be based on certain reasons. There was no indication as to on what information claim of the assessee required deeper scrutiny. In fact, no new material was on record after the filing of the return till the issuance of notice under section 147. fancy of the Assessing Officer. It has to be seen in every case as to whether the invocation is arbitrary or reasonable one. Merely because the Assessing Officer invoking section 147. It is not belief per se that is a pre-condition for invoking section 147, but a belief founded on reasons. The expression used in section Officer believes'. There must be some basis upon which the belief can be built. there must be some material upon which such a belief can be founded." 12. Further, the Hon'ble Delhi High Court in CIT vs. Orient Craft Ltd. (supra) held it is not permissible to adopt different standards while interpreting the words 'reason to believe' vis-à-vis section 143(1) and section 143(3), the Hon'ble Court had held as under: "13. Having regard to the judicial interpretation placed upon the expre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on to believe" that income chargeable to tax has escaped assessment. In our opinion, the said expression should apply to an would have applied to an assessment made under section 143(3). The argument upon certain observations of the Supreme Court in Rajesh Jhaveri Stock Brokers (P.) Ltd. (supra) would also appear to be self-defeating, because if an "intimation" is not an "assessment" then it can never be subjected to section 147 proceedings, for, that section covers only an "assessment" and we wonder if the revenue would be prepared to concede that position. It is nobody's case that an "intimation" cannot be subjected to section 147 proceedings; all that is down. In other words, the expression "reason to believe" cannot have two was earlier made under section 143(3) and another applicable where an intimation was earlier issued under section 143(1). It follows that it is open to the assessee to contend that notwithstanding that the argument of "change of opinion" is not available to him, it would still be open to him to contest the income chargeable to tax has escaped assessment. In doing so, it is further open to the assessee to challenge the reasons recorded under section 148( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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