9911796707
TMI Blog2023 (2) TMI 499X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee filed its return of income on 29/09/2008 declaring total income of Rs.73,978/-. The case of the assessee was selected for scrutiny and assessment was accordingly framed u/s 143(3) vide order dt. 31/12/2010 on total income of Rs.78,980/-. Thereafter, the case of the assessee was reopened u/s 147 of the Act by issuing notice u/s 148 of the Act on 24/02/2015 which was duly served upon the assessee. The Assessing Officer recorded reasons u/s 148 of the Act for reopening the assessment copy of which is filed at page no. 12 of the paper book and finally the assessment was framed u/s 143(3) r.w.s. 147 of the Act dt. 30/03/2016 by making an addition of Rs.25,00,000/- u/s 68 of the Act on account of unexplained cash credit whereas in the reasons recorded, the Assessing Officer noted that the income of the assessee to the extent of Rs.1,80,00,000/- has escaped assessment in terms of provision of Section 147 of the Act qua money received from four companies which were stated to be jamakharchi/shell companies. 4. The ld. CIT(A) in the appellate proceedings, simply dismissed the appeal of the assessee by holding that the reopening of the assessment u/s 147 of the Act on the issue o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under obligation to dispose off those objections first by passing a speaking order dealing therein each and every ground raised by the assessee failing which the order passed by the Assessing Officer is rendered null, void and bad in eyes in law. For this proposition, the ld. A/R relied on the following decisions: Fomento Resorts & Hotels Ltd. vs. ACIT [ITA No.63 of 2007] dated 30/08/2019 Hardware Trading Corporation vs. ACIT [ITA No. 1993/Kol/2014] dated 03/11/2017 7. Lastly, the ld. A/R argued that the assumption of jurisdiction u/s 147 r.w.s. 148 of the Act is bad and so is the assessment framed by the Assessing Officer. The ld AR argued that return of income is filed in response to notice issued u/s 148 of the Act and the Assessing Officer has failed to issue a jurisdictional statutory notice as provided u/s 143(2) of the Act, whereby the Assessing Officer assumes jurisdiction to examine the case of the assessee. The ld. A/R also pointed out that the bench during the last hearing has directed the DR to produce the assessment records in order to verify whether any notice u/s 143(2) of the Act was ever issued to the assessee. The ld. A/R submitted that the said file has be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ipulates that the reopening can only be made if there is a failure on the part of the assessee to disclose all material facts in the return of income or during the original assessment proceedings u/s 143(3) of the Act which has led to escapement of income. We have perused the reasons recorded u/s 148(2) of the Act and find that nowhere the Assessing Officer has stated that there is failure on the part of the assessee to disclose any material fact. The reasons recorded are extracted for the sake of ready reference:- "No. DCIT/CC-2(2)/Kol/AAECS0373H/2015-16/630 Date:30/11/2015 To, The Principal Officer, M/s Suryamukhi vintrade Pvt. Ltd. 37/2,Chinar Park, New Town Road, Kolkata -700157 Sir / Madam Sub: Reason for issue of notice u/s 148 of the lncome Tax Act, 1961, for the A.Y. 2008-09- matter regarding Ref: Your letter dated 09.03.2015 & 07.04.2015. Please refer to the above. As requested the recorded reason as per records for issue of notice u/s 148 for the A.Y. 2008-09 is as under: In this case the assessee company had filed its return on 29/09/2008 showing total was income of Rs. 73,978/-Assessment u/s 143/3) was completed on 31/12/2010 and the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rial which would make him belief, that there is in fact an escapement of income. It is settled by the Hon'ble Supreme Court in Ganga Saran and Sons P. Ltd. v. ITO, [1981] 130 ITR 1 (SC) that the expression "reason to believe" the expression in section 147 'is stronger" then the expression "is satisfied". Therefore the AO has to record his reason to believe escapement of income and if he intends to reopen an assessment which has been framed earlier u/s 143(3) after the expiry of four (4) years from the end of the relevant assessment year, then he has to clearly record the additional condition precedent in the reasons recorded that the escapement of chargeable income was due to the failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment. And it is settled that when there is challenge to the validity of the reasons recorded in the AO to usurp the jurisdiction, then the reasons recorded by the AO should be read as it is i.e, on a standalone basis. No addition or deletion is allowed in the reason recorded. In the light of the aforesaid discussion, a plain reading of the impugned reasons recorded by the AO to reopen (supra) it nowhere m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llen Mills Ltd. v. ITO [1999] 236 ITR 34 for showing that this court, at this stage of issuance of notice, is not to assess the correctness or sufficiency of materials. But this contention cannot be accepted as at this stage not the correctness or sufficiency of the materials but the very existence of the allegation is being considered and that is within the power of the court when the notice is challenged. 8. In respect of the case of Geo Miller and Co. Ltd. and Simplex Concrete Piles (India) Pvt. Ltd. , the learned single judge of this court decided the writ petitions and learned counsel for the respondents states that the reasons in those two cases are identical to the reasons disclosed in the present case, viz., the explanation of law by the apex court in the case of N. C. Budharaja and Co. [1993] 204 ITR 412. But on a perusal of the said judgments, it appears that in the case of Geo Miller and Co. Ltd. , no finding has been arrived at that the second requirement as discussed hereinabove is in the alternative. In the case of Sim-plex Concrete Piles (India) Pvt. Ltd. , the same learned judge came to a finding that both the conditions contained in Section 147 for issuance of n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent there was any omission or failure on the part of the assessee/petitioner in disclosing fully and truly all material facts necessary for its assessment relating to the relevant assessment years or that any new material/information other than those which were already available at the time of regular assessment has come to his knowledge. In view of these admitted factual position I am of the considered opinion that criteria for reopening of assessment under section 147 of the Income-tax Act, 1961, has not been fulfilled in this case. (iii) It appears from the recorded reason itself that the payment on account of 'referral to doctors' was already considered and allowed under section 37(1) of the Income-tax Act, 1961 by the predecessor of the present Assessing Officer at the time of passing regular assessment order under section 143(3) of the Act, dated 28th February, 2014 and the present Assessing Officer himself has recorded in its recorded reason that those materials upon which he has formed his opinion after the expiry of four years from the end of relevant assessment year were already available at the time of regular assessment yet on the self-same material he has fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
