TMI Blog2019 (2) TMI 1196X X X X Extracts X X X X X X X X Extracts X X X X ..... urt in Kelvinator of India Ltd. (2010 (1) TMI 11 - SUPREME COURT OF INDIA ). The "reason to believe" vis-à-vis intimation issued under section 143(1) can cause to the tax regime. There is no whisper in the reasons recorded, of any tangible the issue of the intimation. It reflects an arbitrary exercise of the power conferred under section 147 - Decided against revenue - ITA No. 1462/Mum/2017 And Cross Objection No.132/Mum/2018 - - - Dated:- 26-9-2018 - SHRI G.S. PANNU, JUDICIAL MEMBER AND SHRI PAWAN SINGH, ACCOUNTANT MEMBER For The Appellant :Shri Dharmesh Shah (DR) For The Respondent : Ms. Pooja Swaroop (Sr. AR) ORDER UNDER SECTION 254(1)OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER; 1. The instant appeal by the Revenue is directed against the order of Ld. Commissioner (Appeals)- 12, Mumbai dated 16th December 2016 which in turn arises from assessment order dated 30th March 2015 passed under section 143(3) read with section 147 of the Act. On service of notice of appeal the assessee has filed its cross objections. The revenue has raised following grounds of appeal: (i) Whether on facts and in the circumstances of the case and in law, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /- per share from the following four parties; S. N Name of the person No of shares Face value Issue price Premium per share Money Received towards Share capital, share premium Total (1) (2) (3) (4) (5) (6) (7)=(3)*(4) (8)=(3)*(6) (7)+(8) 1. K.R.C. Trading Co. Pvt. Ltd. 13,400 10 500 490 134000 65,66,000 67,00,000 2. Gyaneshwar Trading Finance Co. Ltd. 1000 10 500 490 10000 4,90,000 5,00,000 3. Oshin Investment Finance P. Ltd. 5300 10 500 490 53000 25,97,000 26,50,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on various case laws referred by lower authorities. The ld. DR for the revenue supported the order of Assessing Officer. The ld. DR further submits that the Assessing Officer supplied the reasons of reopening. The objection of assessee was disposed of. The assessment was completed under section 133(1) on 31.03.2010 and the Assessing Officer has no occasion to examine the issue of share premium received by assessee during the relevant period. 6. On the other hand, the ld. AR of the assessee supported the order of Ld. Commissioner (Appeals). The ld. AR further submits that the reasons recorded by the Assessing Officer were not valid to invoke section 148 of the Act. The reopening is without tangible material available with Assessing Officer for doubting the receipt of share application money. There was no evidence before the Assessing Officer at the time of recording the reasons which could prove that some income had escape assessment. It was further submitted that in case the reasons recorded are insufficient to establish any belief of Assessing Officer, such reason cannot be said to be giving rise to the jurisdiction of the Assessing Officer to reassess the income. Unless any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t be founded on the assessment. Once that is not to be found, then, we are not in a position to sustain the impugned notice. 9. Further, the Hon ble jurisdictional High Court in case of Khubchandani Health parks Pvt. Ltd. (supra) held that notice issued under section 148 would be without jurisdiction for absence of reason to believe that income had escaped assessment even in case where assessment has been completed earlier by intimation under section 143(1). 10. The Hon ble Gujarat High Court in Krupesh Ghanshyambhai Thakkar vs. DCIT (supra) held as under: 11. . as per the reasons recorded, the notice has been issued and assessment is sought to be reopened for deep verification of the claims. Even in verify whether all the criteria are met by the said transaction of ₹ 50 lakhs issued. Even with respect to investment in shares of M/s. Rushil Decor, it has been submitted that whether the investment in shares of M/s. Rushil Decor for A.Y 2009-2010 is sought to be reopened. 12. In case of Inductotherm (India) (P.) Ltd. (supra), Division Bench of this reopening of assessment could not be exercised. It is further observed that the it were a scrut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udicial interpretation placed upon the expression reason to believe , and the continued use of that expression right from 1948 same manner in which it has been understood by the courts. The assumption of the Revenue that somehow the words reason to believe have to be understood in a liberal manner where the finality of an intimation under Section 143(1) is sought to be disturbed is erroneous and misconceived. As pointed out earlier, 143(3) and the intimation issued under section 143(1). Therefore it is not permissible to adopt different standards while interpreting the words reason to believe vis- -vis Section 143(1) and Section 143(3). We are unable to 143(3) cannot apply where only an intimation was issued earlier under Section 143(1). It would in effect place an assessee in whose case the return was processed under Section 143(1) in a more vulnerable position than an assessee in whose case there was a full-fledged scrutiny assessment made under Section 143(3). Whether the return is put to scrutiny or is accepted without demur is matter. The other consequence, which is somewhat graver, would be that the return under Section 143(1) and thereafter issue notices to reopen the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enge the reasons recorded under section 148(2) on the pronouncements. 15. In the present case the reasons disclose that the Assessing Officer reached the belief that there was escapement of income on going through the return of income filed by the assessee after he accepted the return under Section 143(1) without scrutiny, and nothing more. This is nothing but a review of the earlier deprecated by the Supreme Court in Kelvinator of India Ltd. (supra). The reason to believe vis- -vis intimation issued under section 143(1) can cause to the tax regime. There is no whisper in the reasons recorded, of any tangible the issue of the intimation. It reflects an arbitrary exercise of the power conferred under section 147. 13. Considering the above factual and legal discussion that in absence of reason to believe that income had escape assessment. We do not find any illegality or infirmity in the order passed by ld. Commissioner (Appeals) in holding the reopening as invalid. Hence, the grounds of appeal raised by revenue are dismissed. 14. In the result, appeal of the Revenue is dismissed. C.O. No. 132/Mum/2018 15. The assessee has raised the following ground ..... X X X X Extracts X X X X X X X X Extracts X X X X
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