TMI Blog2023 (1) TMI 281X X X X Extracts X X X X X X X X Extracts X X X X ..... by the CIT-A. No substantial question of law - ITAT/42/2022 IA NO.GA/2/2022 - - - Dated:- 3-1-2023 - THE HON BLE JUSTICE T.S. SIVAGNANAM AND THE HON BLE JUSTICE HIRANMAY BHATTACHARYYA Mr. Smarajit Roychowdhury, Adv. Mr. Soumen Bhattacharjee, Adv. ...for the appellant Mr. J. P. Khaitan, Sr. Adv. Mr. Pratyush Jhunjhunwala, Adv. .. . for the respondent ORDER The Court : This appeal filed by the revenue under Section 260A of the Income Tax Act, 1961 (the Act for brevity) is directed against the order passed by the Income Tax Appellate Tribunal, C Bench, Kolkata (the Tribunal) dated 14th December, 2022 in IT(SS)A No.120/Kol/2018 and cross-appeal in CO No.123/Kol/2018 for the assessment years 2009-10 and 2012-13. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring for the respondent/assessee. Two issues fell for consideration before the learned Tribunal, first of which dealt with by the learned Tribunal was regarding the validity of the reopening of the assessment. The second was on the merits of the matter. As against the order of assessment dated 29th December, 2016, the assessee had preferred appeal before the Commissioner of Income Tax (Appeals)-21, Kolkata (CITA). Before the CITA the respondent/assessee not only raised contention regarding the merits of the matter but also contended that the reopening of assessment was bad in law as there was no reason to believe available with the assessing officer on the date when the notice for reopening was issued i.e., on 31st March, 2016. The CITA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is a legal necessity that a foundation based on information is a must before the AO has reason to believe escapement of income. So, here the appraisal report on which the AO builds the reason to belief was absent when he recorded the reason before invoking the reopening jurisdiction u/s. 147 by issuing notice u/s. 148 of the Act on 31.03.2016. Therefore, on these facts we discuss, we are inclined to uphold the contention of the Ld. AR that the foundation on which the AO based his belief that income chargeable to tax had escaped assessment was absent at the material time when he issued notice u/s. 148 of the Act on 31- 03.2016, and therefore, the basic legal requirement of reopening u/s. 148 of the Act i.e. AO s formation of reasons to belie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... doing as suggested in the appraisal report; and if he had succeeded, in this exercise, then he could have summarised his finding of facts connected the assessee to the alleged wrong doing in his reasons recorded along with the modus-operandi as reported in the appraisal report to re-open, which could have exposed the live nexus and consequent cause and effect of escapement of income, which exercise the AO unfortunately did not do in the present case. Having regard to the aforesaid facts, we find merit in the Ld. AR s contention that there was no tangible material contained in the appraisal report based on which the AO could have validly formed reason to believe that income chargeable to tax had escaped assessment which was completed u/s 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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