TaxTMI 
TaxTMI 
2016 (7) TMI 67
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....he business of diamond trading. For the assessment year 2008-09, the petitioner had filed return of income on 08.08.2008, declaring total income of Rs. 1,93,970/- . Such return was taken in scrutiny by the Assessing Officer who framed assessment under section 143(3) of the Income Tax Act, 1961 ('the Act' for short) on 30.08.2010. To reopen such assessment, the Assessing Officer issued said impugned notice. He had recorded following reasons for issuing the notice. "This case is received on transfer from ITO, Ward 3(3)(4), Surat wherein report on the FIUIND reference STR No.1000000768 in the case of Gem Traders of the ITO(Inv), Surat was received on 18.03.2015. In the report, it was mentioned that commission u/s. 131(1) of the Act ....
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....ear. Under such circumstances, in addition to the Assessing Officer forming a reason to believe that income chargeable to tax has escaped assessment, additional requirement to be satisfied would be that the same was due to the assessee failing to disclose truly and fully all material facts for such assessment. 6. In this background, we may peruse the reasons recorded by the Assessing Officer minutely. As per the reasons, reference was made regarding the gems traders. It was reported that in case of M/s. Sai Export, notice under subsection (1) of section 131 of the Act was issued to verify the bank transactions made by the said proprietary concern with Ing Vysya bank at Nariman point branch, Mumbai. Such notice was issued at the address m....
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....is whereabouts at the given address when called upon to explain such bank entries were not known. The income tax authorities therefore could not verify whether transactions through such bank account were duly reflected in the books of accounts. 9. In terms of subsection (1) of section 131 of the Act, the Revenue authorities undoubtedly have the powers of discovery, inspection, enforcement of attendance, compelling production of books of accounts and other documents and to issue commissions same as those vested in the court under the Code of Civil Procedure. Under section 133 of the Act, the Revenue authorities also have wide powers of requiring any person to furnish information concerning the tax implications. However, before reopening a....
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.... at his command to form a belief that income chargeable to tax has escaped assessment. In the present case, this requirement was not satisfied. The Assessing Officer made no effort to find out the assessee and to serve him at his permanent address given to the department which was also mentioned in his PAN card. Thus, the reasons were based on mere suspicion and unverified details. Reopening may not be permitted for mere verification purpose. If full and sincere efforts were made to trace the assessee by issuing notice for production of materials either in terms of powers under subsection (1) of section 131 or 133 of the Act, but such efforts failed for nonavailability or nonappearance of the assessee, a different situation may arise. Howev....