TMI Blog2019 (10) TMI 843X X X X Extracts X X X X X X X X Extracts X X X X ..... when the assessment is reopened on a particular issue and no such addition has been made on that very issue, then, the Assessing Officer cannot make other additions which might have come to his notice during the course of completion of such reassessment. He has to issue separate notice. Since, in the instant case, the Assessing Officer has not made any addition for which the case was reopened, therefore, he lacks the jurisdiction to assess such other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of such proceedings. Therefore, on this ground also, the addition made by the Assessing Officer and sustained by the CIT(A) is not justified - Appeal filed by the assessee is allowed. - ITA No.5135/Del/2018 (Assessment Year: 2009-10) - - - Dated:- 26-9-2019 - SHRI R.K. PANDA, ACCOUNTANT MEMBER Assessee by: Shri C.S. Anand, Advocate Revenue by: Shri S.L. Anuragi, Sr.DR ORDER This appeal by the assessee is directed against the order dated 18th May, 2018 of the CIT(A), Meerut, relating to Assessment Year 2009-10. 2. Facts of the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansaction exceeding ₹ 1,00,000/- with M/s Uflex Ltd. and M/s Montage Enterprises which were not verifiable as filing of ITR was not confirmed. On going through the assessment order, I find that in this case the A.O. was having the information that the appellant had made purchases from M/s Uflex Ltd. of ₹ 11,37,031/-, which could not be verified since the aspect of filing of ITR could not be confirmed. Under these facts, I am of the opinion that A.O. was justified in having a belief for prima facie escaped income exceeding ₹ 1,00,000/- in respect of purchases made from M/s Uflex Ltd. The law nowhere provides that at the stage of initiating the reassessment proceedings, the A.O. should have conclusive evidence for the formation of his belief for existence of some escaped income. If the material before him. prima facie, shows that some income appears to have escaped assessment then he is justified in law in initiating proceedings u/s.147of the IT Act. The law also does not mandate that before initiating reassessment proceedings the A.O. should make enquiries from the appellant in respect of the issue under consideration. The case laws referred to by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounds:- 1. That the assumption of jurisdiction to initiate proceedings u/s 147 by the Id. A.O. is illegal and thus the proceedings initiated u/s 147 as well as the assessment order dt.30.11.2016 passed u/s 144/147 in pursuance to the proceedings illegally initiated u/s 147, are liable to be quashed. 2. That the reason recorded by the ld A.O. for initiating proceedings u/s 147, do not justify the initiation of proceedings u/s 147. 3. That on the facts of the case and under the law, the proceedings initiated u/s 147 are liable to be quashed, because it was not the case of escapement of income but was a case of alleged contravention of the provision of sec. 40A (3). 4. That on the facts of the case and under the law, the assessment order passed u/s 144/147 is liable to be quashed, because the ld A.O. had not made out a case of non compliance of the notice issued by him u/s 148 and/or the notices of hearing issued by him u/s 143(2)/142(1). 5. That on the facts of the case and under the law, the addition / disallowance made u/s 40A(3) at ₹ 2,38,000/- is arbitrary, unjust, illegal and without prejudice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... details of payments recorded by M/s Uflex Ltd. in its books of account which was provided by Uflex Ltd. directly to the Assessing Officer in response to the notice u/s 133(6) of the Act has made the addition. Therefore, such addition is not justified. The ld. counsel in his another plank of argument, submitted that as per the provisions of section 147, the Assessing Officer may assess or reassess such income and also other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings. However, in the instant case, the addition proposed to be made was ₹ 11,37,031/- on account of alleged undisclosed purchase made by it from M/s Uflex Ltd. and M/s Montage Enterprises. However, the Assessing Officer has not made any such addition of ₹ 11,37,031/- because such entire purchases were found recorded in the books of account which were maintained and produced by the assessee before the Assessing Officer. Therefore, the Assessing Officer could not have made disallowance u/s 40A(3) which was certainly not the basis for initiating the proceedings u/s 147 of the Act. Therefore, such addition cannot be sustained in l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal assessment was completed u/s 143(3)-However, pursuant to reassessment notice, which was dropped due to technical reasons, and later notice was issued and assessments were taken up afresh-After considering submissions of assessee and documents produced in reassessment proceedings, AO added back a sum of ₹ 1,35,00,000-CIT(A) held against assessee on legality of reassessment notice but allowed assessee's appeal on merits holding that AO did not conduct appropriate enquiry to conclude that share inclusion and advances received were from bogus entities-Tribunal allowed assessee's appeal on merits-Revenue appealed against appellate order on merits-Assessee's cross appeal was on correctness of reopening of assessment- Tribunal upheld assessee's cross-objections and dismissed Revenue's appeal holding that there was no proper application of mind by concerned sanctioning authority u/s Section 151 as a pre- condition for issuing notice u/s 147/148- Held, Section 151 stipulates that CIT (A), who was competent authority to authorize reassessment notice, had to apply his mind and form opinion- Mere appending of expression 'approved' says nothing- It was not ..... 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