2012 (7) TMI 523

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....lding that such initiation was invalid?" 2. With the consent of counsel the appeals were heard for final disposal. 3. The assessee, Shonkh Technology Ltd. company was incorporated in 1998 and was engaged in the production of Software. For the assessment year 2000-01 it had filed its return; the same was assessed at Rs.12,35,34,420/-. For the succeeding assessment year, i.e. A.Y. 2001-02, which is the year under appeal, however, no return was filed. On 28.10.2004, the Assessing Officer recorded the following, as reasons under Section 148 of the Income Tax Act, 1961 (hereinafter referred to as the „Act‟) for the purpose of initiating proceedings towards escaped assessment for the year 2001-02 in respect of the present assess....

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....e assessee responded to the notice declaring its total income on a loss of Rs.1,50,16,040/-. The Assessing Officer proceeded to consider the merits and by order dated 30.06.2006, assessed the income at Rs.2,36,09,600/-. The Assessing Officer had also initiated penalty proceeding and passed an adverse order. The assessee carried the matter in appeal to the CIT (Appeals) who affirmed the assessment order on 15.10.2008. Aggrieved by the said order, the assessee appealed further to the ITAT. One of the preliminary contentions made before the Tribunal was that there was no material before the Assessing Officer to have concluded that there were reasons to believe that proceedings should be initiated under Section 147 of the Act. On this aspect th....

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....valid initiation is also bad in law and the same is liable to be quashed. We order accordingly and allow the additional ground raised by the assessee. 17. In the grounds originally taken by the assessee company in this appeal, the various additions made by the AO in the assessment completed u/s 147/143 (3) and confirmed by the learned CIT (A) have been disputed on merits. However, keeping in view our decision rendered on the preliminary issue while deciding the additional ground raised by the assessee quashing the said assessment, these grounds have become only of academic nature. We, therefore, do not deem it necessary to adjudicate upon the same on merits." 5. In view of the above reasoning the Tribunal set-aside the assessment and ....