TaxTMI 
TaxTMI 
2018 (4) TMI 1287
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....03-04. 2. Revenue urges the following question of law, for our consideration: "Whether on the facts and in the circumstance of the case and in law, the Tribunal was justified in law in holding that the reopening of Assessment is not sustainable in law?" 3. The Respondent is a company, engaged in Investment and Trading in shares and debentures. For the subject Assessment Year 2003-04, the Respondent filed its return of income, declaring a loss of Rs. 11,736/. The above return of income was processed under Section 143(1) of the Act. 4. Thereafter, on 30th March, 2010, the Assessing Officer issued a notice under Section 148 of the Act, seeking to reopen the Assessment for A.Y. 2003-04. The reasons in support of the impugn....
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....ted u/s. 132 of I.T. act 1961 on 25.11.2009. In the case of Mahasagar Securities Pvt. Ltd., where it is found suspicious transaction taken place in the Bank account of the company and its related company. The copy of said letter which is self explanatory which is forwarded to your honour. From verification of Blue Book it is found that there is no such assessee is assessed in his charge. Similarly, no PAN No. is furnished. However, the assessee have jurisdiction in this charge & the action is going by bar by its of limitation of time. I have reason to believe that there is escapement of the income within meaning of u/s. 147 of the I.T. Act, 1961. As per proviso of section 151(2) of the I.T. Act, no notice u/s. 148 issued by the assess....
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....hanty, learned Counsel for the Revenue submits that in view of the Apex Court's decision in Assistant Commissioner of Income Tax v/s. Rajesh Jhaveri Stock Brokers Pvt. Ltd., 291 ITR 500, the Assessing Officer is entitled to reopen an Assessment for whatever reason. In particular, he places reliance upon the following sentence in para 17 of the above decision i.e. "In other words, if the Assessing Officer for whatever reason, has reason to believe that income has escaped assessment it confers jurisdiction to reopen the assessment." Therefore, this reopening notice cannot be challenged. This for the reason that it will be open to the Assessee during reopened proceeding to establish that seeking to tax the additional income, was not warran....
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....eri Stock Brokers Pvt. Ltd., (supra), the Assessing Officer is entitled to reopen the Assessment for whatever reasons and the same cannot be subjected to jurisdictional review, is preposterous. First of all, taking out a word or sentence from the entire judgment, divorced from the context and relying upon it, is not permissible (see CIT v/s. Sun Engineering Works (P) Ltd., 198 ITR 297). It may be useful to reproduce the context in which the sentence in Rajesh Jhaveri Stock Brokers Pvt. Ltd., (supra) being relied upon by the Revenue to support its case, was made. The context, is as under: "The scope and effect of section 147 as substituted with effect from April 1, 1989, as also sections 148 to 152 are substantially different from the pro....
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....h it was rendered. On so reading the submission, will not survive. 11. Further, a reading of the entire decision, it is clear that the reasonable belief on the basis of tangible material could be, prima facie, formed to conclude that income chargeable to tax has escaped assessment. Mr. Mohanty, learned Counsel is ignoring the fact that the words 'whatever reasons' is qualified by the words 'having reasons to believe that income has escaped assessment'. The words whatever reasons only means any tangible material which would on application to the facts on record lead to reasonable belief that income chargeable to tax has escaped assessment. This material which forms the basis, is not restricted, but the material must lead t....
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....dicate the material (whatever reasons) which form the basis of reopening Assessment and its reasons which would evidence the linkage/ nexus to the conclusion that income chargeable to tax has escaped Assessment. This is a settled position as observed by the Supreme Court in S. Narayanappa v/s. CIT 63 ITR 219, that it is open to examine whether the reason to believe has rational connection with the formation of the belief. To the same effect, the Apex Court in ITO v/s. Lakhmani Merwal Das 103 ITR 437 had laid down that the reasons to believe must have rational connection with or relevant bearing on the formation of belief i.e. there must be a live link between material coming the notice of the Assessing Officer and the formation of belief re....