TaxTMI 
TaxTMI 
2012 (4) TMI 48
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....material facts at the time of the original assessment?" 2. Having heard learned counsel for the parties on merits, we proceed to pronounce our decision. 3. The assessee is a company and for the assessment year in question had filed return on 25th October, 2001 showing income of Rs.38,73,870/-. An assessment order under Section 143(3) dated 9th December, 2002 was passed determining, the total income at Rs.39,73,739/. Pursuant to the first appellate order and after giving appeal effect the income was revised to Rs.39,47,552/-. 4. Subsequently, a notice under Section 148 of the Act dated 28th March, 2008 was issued and the assessee filed a letter dated 10th June, 2008 stating that the original returned filed may be treated as the return filed in response to the said notice. The allegation against the assessee was that they had received accommodation entries of Rs.42,03,250/- as per information received from the Investigation Wing. The reasons recorded by the Assessing Officer have been mentioned in the order passed by the tribunal and read as under:- "1. In this case, the assessment was completed u/s 143(3)(i) on 25.10.2001 as a total income of Rs.39,73,740/- agains....
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.... preferred second appeal before the tribunal in ITA No. 2338/Del/2010. The assessee preferred cross-objection, which was registered as C.O. No. 194/Del/2010. 7. By the impugned order, the tribunal has examined the cross-objection and has allowed the same. It does not deal with the appeal of the Revenue against the order of the CIT(Appeals) deleting the addition on merits. Therefore, we are only required to examine whether or not the reasoning given by the tribunal to quash the reassessment proceedings on the ground that jurisdictional pre-conditions are not satisfied, is correct or not. The exact reasoning given by the tribunal reads as under:- "6.1 In the present case also reopening has been done on the basis of information received from Investigation Wing. As referred above the Hon'ble Delhi High Court has observed that the condition that there was failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment has got to be satisfied, and the Assessing Officer has to prove and establish that assessee has failed to disclose fully and truly material facts necessary for the assessment and he has to state so in the reasons record....
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....ons is for initiation of the reassessment proceedings, which is the starting point. Referring to the said aspect in AGR Investment Limited versus Additional Commissioner of Income Tax and Another, (2011) 333 ITR 146 (Del.), it has been observed that the phrase "reasons to believe" would mean the cause or justification for the Assessing Officer to know or suppose that income had escaped assessment. It does not mean that the Assessing Officer should have finally ascertained the fact by legal evidence or conclusion. At that stage, the final outcome of the proceedings is not relevant. The only question is whether there was relevant material on which a reasonable person could have formed a requisite belief. Whether or not the material would conclusively prove escapement is not the aspect or concern at that stage but this aspect has to be examined subsequently in the reassessment proceedings. Further, we have to ascertain whether the Assessing Officer had applied his mind to the information and independently arrived at the belief on the basis of the material which was produced before him. In AGR Investment Limited (supra), the Division Bench had referred to an earlier decision in Sarthak....
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....nderstood by the Assessing Officer and there is material on the basis of which the notice was issued. As has been held in Phool Chand Bajrang Lal [1993] 203 ITR 456 (SC), Bombay Pharma Products [1999] 237 ITR 614 (MP) and Anant Kumar Saharia [1998] 232 ITR 533 (Gauhati), the court, in exercise of jurisdiction under article 226 of the Constitution of India pertaining to sufficiency of reasons for formation of the belief, cannot interfere. The same is not to be judged at that stage. In SFIL Stock Broking Ltd. [2010] 325 ITR 285 (Delhi), the Bench has interfered as it was not discernible whether the Assessing Officer had applied his mind to the information and independently arrived at a belief on the basis of material which he had before him that the income had escaped assessment. In our considered opinion, the decision rendered therein is not applicable to the factual matrix in the case at hand. In the case of Sarthak Securities Co. Pvt. Ltd. [2010] 329 ITR 110 (Delhi), the Division Bench had noted that certain companies were used as conduits but the assessee had, at the stage of original assessment, furnished the names of the companies with which it had entered into trans- actions a....