TaxTMI 
TaxTMI 
2018 (8) TMI 266
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....the I .T. Act. 1961 as escaped assessment for A.Y.2009-2010 under appeal, reopening proceeding under section 147 of the I .T. Act.1961 were initiated with the approval of the Competent Authority. Notice under section 148 of the I.T. Act. 1961 was issued to the assessee. In compliance to the notice. The assessee submitted that return originally filed for A.Y. 2009-2010 on 30.07.2009 may be treated as return filed in compliance to the notice under section 148 of the I.T. Act, 1961. The A.O. issued statutory notices and called for explanation of assessee. The assessee submitted before A.O. that the flat situated at A-1/404, Purvanchal Silver City, Sector- 93, Noida was purchased for Rs. 1,00,96,750/- by the assessee along with her husband and sale deed was executed on 30.12.2008. The expenses on account of purchase of stamp duly and related expenses of Rs. 4,99,200/- was incurred. It was also submitted that all the payments for purchase of flat were made by the husband of the assessee Shri Nagender Kishore Verma in A.Y. 2009-2010. His case is also reopened for verification o f payments and order under section 147 r.w.s.143(3) dated 12lh March 2015 was passed by the O/o. Assessing Offi....
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....essment in the matter. 6. On the other hand, Ld. D.R. relied upon the Orders of the authorities below and submitted that assessee purchased the property. The A.O. issued notices under section 133(6), for which, no compliance was made. In the absence of PAN and other information, A.O. rightly came to the belief that the said investment in purchase of the immovable property has escaped assessment. 7. I have considered the rival submissions. It is well settled law that validity of initiation of re-assessment proceedings is to be determined on the basis of the reasons recorded for reopening of the assessment. The assessee has filed copy of reasons recorded under section 147 of the I.T. Act at page-59 of the paper book and the same is reproduced as under: "Office of the Income Tax Office, Ward-3(4), Noida. 1. Name & address of the assessee Smt. Swati Verma A-1/404, Block-2, Purvanchal Silver City, Sector-93, Noida - 201 301. 2. Status Indl. 3. PAN Not available 4. Assessment Year 2009-10 Reasons for initiating proceedings u/s. 147 of the I.T. Act, 1961 for A.Y. 2009-10. AIR information in case of Smt. Swati Verma who p....
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.... by conceiving a fact that the assessee failed to respond to the query raised about this investment. As noticed in the submissions of Ld. Counsel for the assessee, I am of the view that there was no proceedings pending before the AO when he sought the clarification of the assessee vide alleged query notice dated 23rd January, 2012. The ITAT Amritsar Bench has dealt with this issue elaborately and recorded a finding that under the income tax Act, there is no such procedure to conduct an enquiry for collecting the information without pendency of assessment proceedings. If this reasoning is being excluded from the copy of the reasons given by the AO, then, nothing will remain with the AO except the information transmitted by AIR Wing. Apart from the above, it is to be seen that in the reasons the AO has nowhere alleged escapement of income. The thrust of the reasoning would show that he want to make an enquiry about the investment. No doubt, for reopening of an assessment, he has to just form a prima facie opinion and not to arrive at a firm conclusion, but, the formation of a prima facie opinion should also depict escapement of income. It is also pertinent to observe that when all th....
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....reasons recorded, that the Assessing Officer issued notice only on the basis of information received from the Investigation Wing but without coming to an independent conclusion for reason to believe that income had escaped assessment and allowed the appeal of the assessee. On appeal : Held, dismissing the appeal, that once the date on which the so-called accommodation entries were provided was known, it would not have been difficult for the .Assessing Officer, if he had in fact undertaken the exercise, to make a reference to the manner in which those very entries were provided in the accounts of the assesses, which must have been tendered along with the return, which was filed on November 14, 2004 and was processed under section 143(3) of the Act. Without forming a prima facie opinion, on the basis of such material, it was not possible for him to have simply concluded that it was evident that the assessee company has introduced its own unaccounted money in its bank by way of accommodation entries. The basic jurisdictional requirement was application of mind by the Assessing Officer to the material produced before issuing the notice for reassessment. Without analyzing and f....
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....dation entry and had not even mentioned the date of recording the reasons. It further held that the Assessing Off icer had not appl ied his mind at the time of initiating the proceedings for reassessment under section 147 and accordingly allowed the appeal of the assessee. On appeal: Held, dismissing the appeal that while the report of the Investigation Wing might have constituted material on the basis of which the Assessing Officer formed the reasons to believe, the process of arriving at such satisfaction could not be a mere repetition of the report of investigation. In the assessee's case, the crucial link between the information made available to the Assessing Officer and the formation of belief was absent. The "reasons to believe" recorded were not reasons but only conclusions and a reproduction of the conclusion in the investigation report received from the Director (Investigation). It was a "borrowed satisfaction". The expression "accommodation entry" was used to describe the information set out without explaining the basis for arriving at such a conclusion. The basis for the statement that the entry was given to the assessee on his paying "unaccounted cash " wa....
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....ded a sum of Rs. 1.13 crores and the basis for such addition had not been explained. No error was committed by the Appellate Tribunal in holding that reopening of the assessment under section 147 was bad in law. No question of law arose." 7.5. The Hon'ble Delhi High Court in the case of Ranbaxy Laboratories Ltd., vs. CIT (2011) 336 ITR 136 (Del.) has held as under : "The assessee-company was engaged in the business of manufacture and trading of pharmaceuticals products. The Assessing Officer accepted the returned income of the assessee but initiated reassessment proceedings under section 147 of the Income-tax Act, 1961, in respect of club fees, gifts and presents and provision for leave encashment. While completing the reassessment however, he did not make additions on account of these items but instead reduced the deductions under sections 80HH and 80-1. The Commissioner (Appeals) held that in the original assessment the powers of the Assessing Officer were limited to the extent of prima facie adjustment only. On the merits of the additions, the Commissioner (Appeals) followed his order of assessment year 1996-97. On appeal the Tribunal held that the assumption of juri....
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....issible. The Tribunal was right in holding that the Assessing Officer had the jurisdiction to reassess issues other than the issues in respect of which proceedings were initiated but he was not justified when the reasons for the initiation of those proceedings ceased to survive." 7.6. The reasons recorded for reopening of the assessment shows that A.O. received the information that assessee purchased immovable property for which verification is required for Non-PAN financial transaction related to A.Y. 2009-2010. The A.O. in order to verify the transaction, issued notice to the assessee. However, in the absence of any reply from the side of the assessee, A.O. noted that same established that assessee has willfully concealed her income by way of not disclosing the source of the investment. The A.O. in the reasons did not record if he has reason to believe that income chargeable to tax has escaped assessment which is mandatory condition for reopening of the assessment. The A.O. also noted in the reassessment order that assessee, in reply to the notice under section 148, submitted that return originally filed for assessment year under appeal on 30.07.2009 may be treated as return f....