TaxTMI 
TaxTMI 
2015 (6) TMI 382
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.... appeals filed by the assessee and the Revenue for the Asstt.Year 2006-07 against the order of the CIT(A)-IV, Ahmedabad dated 7.2.2013. 3. ITA No.124/RJT/2013 and 168/RJT/2013 are cross appeals filed by the assessee and the Revenue for the Asstt.Year 2007-08 against the order of the CIT(A)-IV, Ahmedabad dated 7.2.2013. 4. In the assesse's appeal, assessee has raised common ground no.2 and 3, challenging the reopening of the assessment by the AO, and the same read as under: "2.0 The learned Commissioner of Income Tax (Appeals)-IV, Ahmedabad [hereinafter referred to as the "CIT(A)"] erred on facts as also in law in holding that, re-opening of assessment u/s 147 of the Act is based on sufficient tangible material which relates to the ye....
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....tt.Year 2007-08, the assessee filed its return on 29.10.2007 disclosing total income at Rs. 70,24,240/-. The assessment was completed under section 143(1) of the Act at the very same figure. 6. Thereafter, the AO issued notice under section 148 of the Act for escapement of income assessable to tax for the Asstt. years 2005-06, 2006-07 and 2007-08 all dated 23.12.2011, and the reasons recorded for reopening of the assessment reads as under. The reasons recorded for all the years are exactly similar. "1. The assessee is engaged in the business of manufacturing of ceramic tiles. The case of the assessee was centralized with this Circle with the sole purpose of assessing the income of the assessee, in light of the various financial irregulari....
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....cted by them in cash from the buyers and such cash amounts are not accounted for in their statutory records, etc. Thus, the allegation is that, the assessee had adopted a fraudulent method to keep the landed cost of tiles at the barest minimum at the destination so that it does not exceed the artificial MRP declared in the Central Excise Invoices. Subsequently, in order to transfer such cash amounts from dealers, different methods were adopted by them viz., in case of transfer from within the State of Gujarat, cash amounts were mostly transferred through angadias and where transfer is from locations outside Gujarat, cash amounts were sometimes collected personally by the authorized representatives or their sales personnel during their visit....
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....ose fully and truly all material facts. Hence, the assessment is required to be reopened." 7. The assessee challenged validity of reopening of the assessment on the basis of the above reasons before the Lower Authorities unsuccessfully. 8. Being aggrieved, the assessee is in appeal before us. 9. We have heard rival submission and perused the recorded reasons under section 148(2) of the Act for issuance of notice under section 148 of the Act. 10. We find that it is an established position of law that when validity of notice issued under section 148 is challenged, the validity of the same has to be judged on the touch stone of the reasons as recorded by the AO under section 148(2) of the Act alone, and no other material can be taken into ....
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....e assessee and the background under which the AO recorded that Director General of Central Excise Intelligence, Ahmedabad (DGCEI) in the case of the assessee found that there was a suppression of sales for the purpose of levy of excise duty, and accordingly, issued show cause notice, a copy of which was received by him from CIT, Central-2, Ahmedabad. Thereafter, the AO recorded the background under which the DGCEI made investigation and search in the case of the assessee and the background under which show cause notice came to be issued in the case of the assessee by the DGCEI. 16. According to the AO, the report contained in the show cause notice of Excise Department is foolproof, and there is substantial material evidence of suppression ....
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....order against the petitioner. We wonder what would happen to the order of reassessment, if ultimately the Excise Department were to drop the proceedings without levying any duty or penalty from the petitioner." 19. Further, the show cause notice issued by the Excise Department contains the allegation of the Excise Department that the assessee has suppressed sales for the purpose of making payment of excise duty. A perusal of recorded reasons does not show that the AO verified the particulars declared by the assessee in its income-tax return. Nowhere in the recorded reasons, the sale declared by the assessee in its income-tax return, has been brought on record. The AO, as per the recorded reasons, has not verified the income-tax return of t....