AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2016 (7) TMI 970
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....ant Shri Asharamji Ashram Ahmedabad based assessee. The DDlT(lnv.), Unit2( 2), Ahmedabad has issued the summons and served on 30/03/2015, asking the assessee to explain the documents which were received from the Surat authorities and the assessee was specifically asked to explain, if the investment of Reliance Mutual Fund of Rs. 25 lacs were recorded in the regular books of account and the sources were accounted for. However, the assessee neither appeared nor submitted the details as per summons issued. In view of the above facts and circumstances, this office has received the information from the DDIT(lnv.), Unit2( 2), Ahmedabad regarding the investment made of Rs. 25,00,000/- in Reliance Mutual Fund on 28/01/2008 i.e. F .Y.20072008 in the above named assessee Sant Shri Asharamji Ashram, Motera, Sabarmati, Ahmedabad. The assessee has not attended nor submitted any details regarding the said transaction. Hence, the sources of investment remain unexplained and needs to be verified. The above points required to be examined in details, after obtaining evidence from the assessee. I have therefore reason to believe that income chargeable to tax has escaped assessment for A.Y.20....
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....t tenable without any substance and as such rejected." 5. Learned counsel for the petitioner submitted that the reasons recorded by the Assessing Officer would show that he had borrowed satisfaction of the investigation wing for issuing the notice and had not independently applied his mind. He further submitted that the reasons are vague and would not permit the Assessing Officer to reopen the assessment on such basis. For examining the details, the assessment cannot be allowed to be reopened. In short, the Assessing Officer cannot be stated to have reasons to believe that income chargeable to tax had escaped assessment. Drawing our attention to the documents filed by the petitioner trust along with the return for the assessment year in question, he submitted that audited accounts included an entry of investment of Rs. 25 lacs in Reliance Mutual Funds which is the bone of contention in the reasons recorded by the Assessing Officer. Thus verification of the records would have enabled the Assessing Officer to ascertain whether the investment was reflected in the books of assessee or not. Counsel further submitted that the notice under section 131A for production of evidence was....
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....essment year. (iii) Such reasons must be recorded and if the reasons recorded by the Assessing Officer do not disclose satisfaction of these two conditions, reopening notice must fail. (iv) There is no set format in which such reasons must be recorded. It is not the language but the contents of such recorded reasons which assumes importance. In other words, a mere statement that the Assessing Officer had reason to believe that certain income has escaped assessment and such escapement of income was on account of nonfiling of the return by the assessee or failure on his part to disclose fully and truly all material facts necessary for assessment would not be conclusive. Nor, absence of any such statement would be fatal, if on the basis of reasons recorded, it can be culled out that there were sufficient grounds for the Assessing Officer to hold such beliefs. (v) Such reasons must emerge from the reasons recorded by the Assessing Officer and cannot be supplied through an affidavit filed before the Court. However, Gujarat High Court in the case of Aayojan Developers v. Income Tax Officer [Supra] has accepted the view that to elaborate such reasons already recorded, reference w....
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.... Section 147 of the Act permits the Assessing Officer to assess, reassess the income or recompute the loss or depreciation if he has reason to believe that any income chargeable to tax has escaped assessment for any assessment year. This power to reopen assessment is available in either case, namely, while a return has been either accepted under section 143(1) of the Act or a scrutiny assessment has been framed under section 143(3) of the Act. A common requirement in both of cases is that the Assessing Officer should have reason to believe that any income chargeable to tax has escaped assessment." 9. Bearing in mind these principles, if we revert back to the case on hand, all that the Assessing Officer in the reasons recorded has referred to is the notice issued to assessee for production of details regarding investment of Rs. 25 lacs made in Reliance Mutual Funds; that the assessee did not attend or submit the details regarding the transaction. He was therefore, of the opinion that investment remained unexplained and needed to be verified. Such points are required to be examined in detail after obtaining evidence from the assessee and it was for this purpose that the Assessing ....