TaxTMI 
TaxTMI 
2015 (10) TMI 2633
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....ssed u/s.143(1) of the Act. The case was re-opened u/s. 147 of the Act and a notice u/s.148 was issued on 27.3.2009.the assessment u/s. 143(3) r.w.s 147 of the Act was completed on 31.12.2009 determining the income of the assessee at Rs. 11.16 lacs. 2. Effective Ground of appeal deals with the validity of reopening of assessment u/s. 147 of the Act and the next ground deals with the merits of the case. We would like to adjudicate the jurisdictional issue before deciding ground No.2. The reasons recorded by the AO for reopening the assessment read as under : "In this case, it has been found that assessee had obtained accommodation bills from Manoj Mills Prop. Rakesh Kumar Gupta of Rs. 97,217/- and from Shri Ram Sales and Synth....
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....n the cases of Kelvinator India (228 CTR 488); German Remedies Ltd. (287 ITR 494); GKN Driveshafts (I) Ltd. (259 ITR 19). Considering the objections raised by the assessee, the FAA forwarded the same to the AO for verification and report. The AO, vide letter dated 12.8.2013,submitted his remand repot wherein he stated that the copy of the reason supplied to the assessee was unsigned, that the extract of the reasons recorded was given to the assessee, that the signed copy of the reasons recorded was being submitted, that the re-opening of the assessment was duly approved by the Addl CIT, that as per the satisfaction records the information in possession at the time of reopening was for Rs. 7.52 lacs (Rs.97,217+ Rs. 6,55,098/-),that the JCIT ....
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....condition for issuing notice under section 148 of the Income-tax Act, 1961, is satisfaction in terms of section 147 that an income chargeable to tax has escaped assessment in the relevant AY.....that neither the survey report nor any other material indicated that any income chargeable to tax for the relevant assessment years had escaped assessment. The Assessing Officer, therefore, had nothing before him which would enable him to record his belief that any such escapement had taken place. In the circumstances, the reasons recorded and which pertain to all the assessment years prior and subsequent to the survey could not satisfy the requirement in law. This was not how the power under section 147 should be exercised. It is to be exercised an....
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....those reasons by filing a reply, that it has to be adjudicated upon by the AO by a reasoned order, before he proceeds to make the assessment. In the case of MGM Export (323 ITR 331) the Hon'ble Gujarat High Court, found that upon receipt of the reasons recorded, the assessee preferred objections, both on jurisdiction and on the merits, that the assessee passed the assessment order without disposing the objections. The Hon'ble Court held that the AO was required to decide the preliminary objections and pass a speaking order disposing of the objections raised by the petitioner, that until such a speaking order is passed, the AO could not undertake re-assessment. Accordingly, the reassessment order was quashed and set aside We would also li....
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....n'ble P & H High Court in the case of Varsha Goyal (319 ITR 92) has dealt with the matter where the assessee had filed a return of income which was processed u/s.143(1)(a) of the Act, after search operations were conducted in the residential premises of the assessee. Later on, a notice under section 148 of the Act was issued for re-assessment. The FAA confirmed the order for reopening the assessment, whereas he Tribunal held that the reopening of assessment by the AO u/s.147 of the Act was unjustified. On appeal, the Court held as follow: "...that in spite of the fact that all the documents and material were available with the Assessing Officer when the return of income was filed and processed, no specific items of jewellery and pa....
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....rcle before recording his own satisfaction of escaped income and initiating reassessment proceedings. The Assessing Officer had thus acted only on the basis of suspicion and it could not be said that it was based on belief that the income chargeable to tax had escaped income. The Assessing Officer had to act on the basis of "reasons to believe" and not on "reasons to suspect". The Tribunal rightly concluded that the Assessing Officer had failed to incorporate the material and his satisfaction for reopening the assessment and therefore the issuance of notice under section 148 of the Act for reassessment proceedings was not valid." We find that in the reasons supplied to the assessee, at the time of issuing unsigned reasons the AO had not ....