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TMI Blog2022 (12) TMI 434X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the impugned assessment order passed by the learned assessing officer (Ld. A.0) without having any lawful jurisdiction as a. there were no cogent reasons to believe that the Income had escaped assessment and accordingly the provisions of section 147 & 148 were not applicable to the case, b. the objections raised by & on behalf of the appellant were not at all considered by the ld A.O before assuming the jurisdiction u/s 147 and c. no notices u/s 143(2) or 142(1) were issued or served on the appellant d. The impugned assessment order has been upheld by the Ld. CIT(A) on the basis of perverse and arbitrary finding of facts 2. Without prejudice to above the learned CIT (A) has further erred in sustaining part i.e., 30% disallowanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2013 wherein it was stated that assessee was involved in bogus claim of expenses to the tune of Rs.15,42,20,343/-. And then the AO after taking notice that the AR of the assessee attended before him on 24.03.2014, records in the assessment order that assessee/AR was furnished with the "reason for reopening" along with transaction regarding data of Hawala Purchases received from DGIT (Inv.), Mumbai, viz Copy of AIR (ITS) data; and the AO notes that he confronted the assessee with the adverse material and asked him to explain about the adverse information with supporting evidence if any. However, according to AO, the assessee failed to satisfactorily explain reply to his query/adverse material. Thereafter, the AO taking note of the fact that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. VIJAY P. MARU Income Tax Officer 24 (3)--2 Mumbai. 6. According to the Ld. AR, from a perusal of the aforesaid reasons recorded for reopening u/s 147 of the Act would reveal that the AO has not satisfied the essential condition precedent for reopening the assessment. According to him, based on the information from DGIT (Inv.) the AO has jumped to the conclusion that there is escapement of income i.e only based on the investigation report of the DGIT(Inv.), the AO has concluded that assessee's income has escaped assessment which is bad in law because, the essential condition precedent for re-opening i.e "reasons to believe" that there was escapement of income is absent in this case. And therefore, according to him, the AO could not h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... garding undisclosed income or AO had information in his possession showing escapement of income. As per section 147 of the Act, the AO is empowered to reopen the assessment if he has "reasons to believe escapement of income". "Reasons to believe" postulates foundation based on information and belief based on reason. Even if there is foundation based on information, there still must be some reason warrant holding a belief that income chargeable to tax has escaped assessment. 8. In the present case, when we have to adjudicate the legal issue as to whether the AO had satisfied the condition precedent for validly reopen the assessment, we have to examine the "reasons recorded" as such (supra). The Hon'ble Bombay High Court in the case of Hindu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regarding the assessee's claim of expenses to the tune of Rs.6,16,79,235/-purported to have been transacted with various parties which was bogus. And the AO states in the second line of the reasons recorded that he had "reason to believe that income chargeable to tax of Rs.6,16,79,235/- for AY. 2009-10 has escaped assessment''. From the aforesaid reason to re-open the assessment, we note that the AO only had foundation based on information which was not sufficient to invoke jurisdiction for re-opening the assessment. In this case, next essential condition is found to be absent i.e, the believe based on reason is absent. [At the cost of repetition it should be kept in mind that as per section 147 of the Act, the AO is empowered to reopen the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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