TaxTMI 
TaxTMI 
2017 (9) TMI 588
X X X X Extracts X X X X
X X X X Extracts X X X X
....- 'AO') under Section 148 of the Income Tax Act, 1961 ('Act') seeking to reopen the Petitioner's assessment for the Assessment Year ('AY') 2009-10. A challenge is also laid to the letter dated 4th July 2016 rejecting the objections filed by the Petitioner to the reopening of the assessment. 2. The facts in brief are that the Petitioner, Sky View Consultants Private Limited, is engaged in the consultancy business and looking after 'product promotion and sales services' of products being marketed by Seagram India Limited, presently known as Pernod Ricard India Limited (PRIL). The Petitioner filed its return for the AY 2009-10 on 24th October 2009 declaring an income of Rs. 13,59,848/-. The said return was processed under Section 143 (1....
X X X X Extracts X X X X
X X X X Extracts X X X X
....etitioner to provide the necessary details so that independent enquiries could be conducted from the third parties. The ITO (Inv) in his report stated that the Petitioner has neither provided any justification with documentary evidence nor the details of the parties to whom the contract charges were paid. From both the above documents and the report of the ITO (Inv) it was inferred that 'the modus operandi of the Assessee in the AY 2009-10 is the same as was in AY 2007- 08 and 2008-09'. It was further inferred that the aforementioned sum of Rs. 2,41,79,349/- had been used by the Petitioner for 'non business purposes', thus concealing its true income. (iii) The third reason was that the Director General of Income Tax (DGIT) (Vigilance) by....
X X X X Extracts X X X X
X X X X Extracts X X X X
....3 ITR 146 (Del) in support of the proposition that 'information received from investigation wing can be used for re-opening of the case.' It was asserted that there was 'live and tangible nexus between the information and belief formed which has been arrived at after independent evaluation of the information by the AO.' 6. This Court has heard the submissions of Dr. Rakesh Gupta, learned counsel appearing for the Petitioner, and Mr. Rahul Kaushik, learned Senior Standing Counsel for the Revenue. 7. In the counter affidavit filed on behalf of the Revenue, reference, inter alia, is made to the fact that the proceedings under Section 147 of the Act for AY 2008-09 resulted in an assessment order under which it was held that none of the en....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ices of the assessment". After referring to a large number of decisions, this Court explained: "The ratio laid down in all these cases is that, having regard to the entire scheme and purpose of the Act, the validity of the assumption of jurisdiction under Section 147 can be tested only by reference to the reasons recorded under Section 148(2) of the Act and the Assessing Officer is not authorized to refer to any other reason even if it can be otherwise inferred and/or gathered from the records. He is confined to the recorded reasons to support the assumption of jurisdiction. He cannot record only some of the reasons and keep the others up his sleeves to be disclosed before the Court if his action is ever challenged in a Court of law." ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....This, again, is impermissible in law. Since the reasons must speak for themselves, a subsequent attempt to supply the omission at the stage of an order disposing of the objections raised by the Assessee or providing them in the counter-affidavit in reply to the writ petition or even worse, making good that defect in the course of arguments before the Court, will simply not suffice...." 11. In the present case, the fact that the assessment order passed after the reopening of the assessment for AY 2008-09 may have found the entities to whom the Petitioner issued cheques to be fictitious cannot be looked into for the simple reason that it was an order passed 21 days after the reasons in the present case were recorded for re-opening of the a....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Ltd. v. Additional CIT (supra) only lays down a general proposition regarding assessments being reopened on the basis of reports of investigation. It does not obviate the need to show that there is tangible material relevant to the AY in question that warrants reopening of the assessment for that particular AY. 14. More importantly, it is not understood how despite being aware of the above orders pertaining to AY 2007-08, the AO in his reasons for reopening the assessment for AY 2009-10 did not refer to them while recording his reasons on 10th March 2016. Clearly this was an instance of non-application of mind by the AO to the relevant material. Since the AO failed to justify his reasons to believe that income has escaped assessment for....