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TMI Blog2021 (10) TMI 269X X X X Extracts X X X X X X X X Extracts X X X X ..... /2018 and after the survey, the Assessee has filed it's return of income for the A.Y. 2016-17 on 19/03/2018 admitting total income of Rs. 5,30,57,790/- and paid the self-assessment tax thereon. The AO has issued notice u/sec. 148 on 30/03/2019 calling for the return of income. In response to the notice issued, the Assessee has filed a letter dated 28/09/2019 stating that the return of income filed on 19/03/2019 may be treated as return in response to the notice issued u/s 148. Subsequently, the AO issued notice u/sec. 143(2) and 143(1) and completed the assessment on total income of Rs. 8,46,78,304/-. During the assessment proceedings, the AO found that the Assessee has taken unsecured loan of Rs. 9,14,37,645/- during the year and out of which, for a sum of Rs. 3,16,20,514/-the assessee failed to furnish confirmation letters therefore added back to the returned income u/s 68 of the act. 3. Against the order of the AO, the Assessee went on appeal before the ld. CIT(A) and raised a legal ground stating that notice u/sec. 148 was not valid as there was no tangible material to prove the income escapement of income. The Assessee submitted before the ld. CIT(A) that the notice u/sec. 14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of the ld. CIT(A) and restore back the file to the ld. CIT(A) to adjudicate the issue on merits. 5. Per contra, ld.AR supported the order of the ld. CIT(A) and also requested the tribunal to uphold the order of the ld. CIT(A). 6. We have heard both the parties and perused the material placed on record. In the instant case, the AO has reopened the assessment by issuing notice u/sec. 148 of the Act after recording the reasons. The reasons recorded by the AO was reproduced in ld. CIT(A)'s order which reads as under:- "4. It is observed from the return that the Assessee's gross collections were Rs. 290 crore and excess of income over expenditure was Rs. 5.30 crore. The Assessee has showed unsecured loans of Rs. 23,40,50,450/- which appears to be suspicious and disproportionate to the turnover/gross receipts of the Assessee for the year under consideration. The unsecured loans as showed by the Assessee for the Asst. Years 2009-10 to 2015-16 were found bogus and admittedly the donations wrongly accounted for in the books of account as unsecured loans. 5. In view of the above and also the fact that the return was filed belatedly and only after the survey operation, I have reason t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same as income in the earlier years. For Income tax purpose each year is independent and the issue has to be decided on facts independently. From the above, it is very clear that the AO reopened assessment merely on suspicion and the ld. CIT(A) quashed the notice following the order of this tribunal in the case of Dr. M.J. Naidu (supra). For the sake of clarify and convenience, we extract the relevant part of the order of ld. CIT(A) which reads as under:- "9. In view of the above decision, I hold that the issuance of notice u/s 148 of the Act is not valid as the reopening of the assessment was made basing on the suspicion developed in the mind of the Assessing Officer without having any tangible material in his possession to demonstrate that he has reason to believe that income escaped assessment. In my opinion, there is substantial difference between the words "reason to believe" and the words "appears to be suspicious". If the matter is taken to its logical end, it is to be noted that for issue of notice u/s 148 of the Act, the Assessing Officer himself should be confident that income escaped assessment. But in the case on hand, the position is different as while recording the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he decision of the Hon'ble ITAT, Viskhapatnarn cited by the appellant which is discussed above applies to the appellant's case on all fours as the circumstances prevailing in the appellant's case and the case decided by the Hon'ble ITAT, Visakhapatnam are almost identical. 12. Having regard to the above discussion, I hold that there is no case for issue of a notice u/s 148 of the I.T.Act, 1961 and hence the same is quashed holding that the notice issued u/s 148 of the Act is not valid in view of the circumstances prevailing in this case. Accordingly, the reopening of the assessment by issuance of notice u/s 148 of the I.T. Act, 1961 is held to be void and the same is accordingly quashed. Since the notice issued u/s 148 itself is held to be not valid, the consequential assessment completed u/s 143(3) r.w.s. 147 of the I.T. Act, 1961 on 30/12/2019 also becomes invalid and the same is accordingly cancelled." 8. In the instant case, the ld. CIT(A) has followed the order of this tribunal in the case of Dr. M.J. Naidu (supra) and the tribunal held that on mere suspicion the notice u/sec. 148 cannot be issued and the same is held to be invalid. For the sake of clarity a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng officer did not mention specifically which part of the statement and what material impounded constitutes basis for formation of reasonable belief for escapement of income in the reasons recorded. The nexus of the statement recorded and the impounded material for escapement of income was not brought on record in the reasons. Even the assessing officer did not mention the assessment year and it was left blank which shows the casual attitude of the assessing officer in reopening the assessment. The assessing officer cannot improve the reasons already recorded, subsequently by referring to the books of accounts or the explanations. Hon'ble Gujarat High Court in the case of Hindustan Unilever Ltd. Vs. Army Wadkar, ACIT [268 ITR 332] held that reopening notice is to be justified on the basis of reasons recorded at the time of issuing the impugned notice. The impugned notice must stand or fail on the reasons recorded. Thus, reasons recorded cannot be supplemented by further reasons or filing an affidavit or making oral submissions. The reasons are made on the point of assessing officer and must be self explanatory and should not keep the assessee guessing. It cannot be justified on the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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