2018 (5) TMI 1436

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.... Metal Works. For the assessment year 2010-11, the petitioner had filed the return of income on 15.12.2010 declaring total income of Rs. 1.14 lakhs (rounded off). According to the petitioner, he retired from the said firm with effect from 01.04.2009. The return of the assessee was accepted without scrutiny under section 143(1) of the Income Tax Act, 1961 ('the Act' for short). To reopen such assessment, impugned notice came to be issued. In order to do so, the Assessing Officer has recorded following reasons: "As per Information in the case of Shri Atulkumar Ratilal Makadia received from the DDIT(Inv.), Navsari that the assessee who has been retired from the firm namely Shakti Metal Works, Chikhli, Navsari received share of Rs. 43....

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....rn, "As such, I have a reason to believe that an income of Rs. 37,37,978/as stated above, has escaped assessment in the hands of the assessee for the year under consideration. I am satisfied that the case of the assessee is a fit case for action u/s 147 of the Act by reason of the assessee's failure to disclose fully and truly all the material facts necessary for assessment." 4. The petitioner raised objections to the notice of reopening under a communication dated 26.03.2017. Such objections were however rejected by an order dated 04.07.2017. 5. Appearing for the petitioner, counsel submitted that the notice of reopening was invalid for the following reasons: I. The petitioner having retired from the partnership firm on 31.03.2009....

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....how that the complaint made by the TEP was investigated by the investigation wing. The report was placed before the Assessing Officer who after perusal of the report and other materials on record, formed a belief that income chargeable to tax has escaped assessment. Counsel contended that this was in addition to the reasons already recorded which demonstrate these fact. 7. We may recall, in the present case, the return filed by the assessee was not scrutinized before acceptance. This was thus, the case of non scrutiny assessment. As held by the Supreme Court in case of Assistant Commissioner of Incometax v. Rajesh Jhaveri Stock Brokers P. Ltd. reported in (2007) 291 ITR 500 (SC), the Assessing Officer therefore cannot be stated to have for....

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.... the Assessing Officer. The petitioner's objection in this regard must be rejected. 9. The petitioner's contention regarding that taxing event not falling during the current year and the taxability of the amount in the hands of the petitioner would be substantially in the realm of ascertainment of full facts and applicability of law on such facts an exercise the Court would not undertake at the stage of examining validity of the notice of reopening of assessment. At the stage when the notice of reopening of assessment is being tested, the duty of the Assessing Officer is only to primafacie establish that income chargeable to tax has escaped assessment. It would not be his duty to demonstrate with certainty that invariably upon reas....