TaxTMI 
TaxTMI 
2014 (11) TMI 215
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.... only to the reasons of escapement of income of Rs. 4,51,000/- even though there is no such bar under the Income Tax Act but if he found any material during the course of reassessment proceedings, he can assess accordingly." 3. "On the facts and in the circumstances of the case, the Ld. CIT(A) has erred on facts and in law in holding that assessee was not provided any opportunity and thus suffers severely from the violation of natural justice and hence vitiates the reassessment disregarding the fact that assessee was provided as many as 14 (fourteen) opportunities as details given on page No. 2 & 3 of assessment order, but mostly he either did not attend the proceedings or no relevant details filed, thus deliberately tried to avoid/ delay the proceedings throughout." 4. "On the facts and in the circumstances of the case, the Ld. CIT(A) has erred on facts and in law in giving relief of Rs. 98,80,100/- thus reducing the assessee's income to NIL as against income of Rs. 3,06,245/ - declared by the assessee himself in his return of income and is contrary to the Hon'ble Supreme Court's decision in the case of CIT vs Shelly Products and another (2003) 261 ITR 367 wherein th....
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.... the entire reassessment proceedings. Since the CIT(A) noted that the opening of assessment was not valid and the same was quashed by accepting the legal grounds and objections of the assessee, therefore, the CIT(A) refrained form adjudicating the appeal of the assessee on other grounds pertaining to the additions on merits. 5. Now, the aggrieved revenue is before this Tribunal with the grounds as reproduced herein above. 6. We have heard arguments of both the sides and carefully perused the relevant material placed on record, inter alia reassessment order, impugned order and ratio of the decisions relied by both the parties. 7. Ld. DR submitted that the CIT(A) has erred on facts and circumstances of the case in annulling and quashing the assesssment even though after the amendment in section 147 w.e.f. 1-4-1989, the only requirement before issue of a notice u/s 148 is that the Assessing Officer should have reason to believe that income had escaped assessment. Ld. DR also contended that the CIT(A) has also erred on factual matrix and in law in holding that the AO has proceeded beyond jurisdiction available with him u/s 147 of the Act which was limited only to the reason of escap....
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....rightly annulled and quashed the notice u/s 148 of the Act and entire assessment proceedings conducted thereunder. Ld. Counsel has placed his reliance on the following decisions:- 1. CIT Vs. Kamdhenu Steels & Alloys Ltd. & Ors., SLP No. 15640/2012.(SC). 2. CIT Vs. Kamdhenu Steels & Alloys Ltd. & Ors., (2012) 248 CTR (Del) 33., (DHC) 3. CIT vs. SFIL Stock Broking Ltd.,(2010) 325 ITR 285.,(DHC). 4. Sarthak Securities Co. Pvt. Ltd. Vs. ITO.,(2010) 329 ITR 110.,(DHC). 5. Signature Hotels Pvt. Ltd. Vs. ITO & Anr., (2011) 338 ITR 51.,(DHC). 6. Recent decision of Hon'ble Jurisdictional High Court of Delhi in the case of CIT vs Insecticides (India) Ltd. 2013 357 ITR 330 (Del). 7. Decision of ITAT Delhi Bench in the case of ITO vs On Exim Pvt. Ltd. (2013) 157 TTJ 633 (ITAT Delhi). 9. On careful consideration of above submissions and ratio of the decisions relied by both the parties, and careful reading of the impugned order, specially operative para no. 5 & 6, we observe that the CIT(A) has quashed the reassessment proceedings initiated u/s 147 and 148 of the Act with following observations and conclusions: "5. I have carefully considered the contentions of the Ld. AR and perused t....
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....only to the reasons of escapement of income of Rs. 4,51,000/-. As per the amended provisions of section 147 with effect from 01.04.1989, the scope of section 147 still remains restricted to the escaped income proposed to be taxed in the reasons recorded u/s 148 of the Income Tax Act, 1961. As brought out by the Ld. AR above, such situations have been sufficiently discussed by the courts like the Apex Court in the case of CIT Vs. Sun Engineering Work Pvt. Ltd. (Supra) and the Jurisdictional High Court in the case of Vipin Khanna Vs. CIT and Amrinder Singh Dhiman Vs. ITO (Supra). All these judgments have been fully re-elucidated and affirmed not only by the Kerala High Court in the case of Travancore Cement Ltd. Vs. ACIT (Supra) but also recently by the Hon'ble Delhi High Court in the case of Jai Bharat Maruti Ltd. Vs. CTT(Supra). The amended provisions of section 147 only justify those same additions to be made as are mentioned in the reasons recorded but also those which are found to be identical or central or key to the issues additions referred to in the reasons u/s 148(2). But here in this particular case all the additions except that of Rs. 4,51,000/-, are wholly unrelated ....
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....on of closing stock against the assessee company, therefore, it was held that court can only consider whether there was a prima facie case for reassessment; sufficiency of material cannot be considered. 14. In the case of Rajesh Zhaveri (supra), Hon'ble Apex court held that formation of belief within subjective assessment of AO is required. In this case, the claim of the assessee towards bad debts was examined during the reassessment proceedings. In this case, the return of income was processed u/s 143(1) of the Act. 15. In the light of facts and circumstances of the present case, we respectfully hold that the benefit of the ratio of the above decisions are not available for the revenue in the present case as the AO proceeded to record reason to believe as required for issuance of notice u/s 148 of the Act in a mechanical manner only after mentioning detailed reason from Investigation Wing of the Department in a CD Form without applying its independent mind and even without mentioning the date of recording of reason to believe that the income has escaped assessment. 16. We further proceed to consider the ratio of the decisions relied by the ld. Counsel of the assessee in the rec....