TaxTMI 
TaxTMI 
2019 (1) TMI 659
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....I) Whether on the facts and circumstances in law, the Hon'ble Tribunal erred in setting aside the reassessment notice overlooking the crucial fact that the assessee's case is squarely covered by Explanation-1 to section 147 of the I.T. Act, 1961. (II) Whether on the facts and circumstances the case and in law, the Hon'ble Tribunal erred in setting aside the reassessment notice overlooking the fact that the facts material to the computation of income were not disclosed fully and correctly by the assessee and the property purchased and sold by the assessee within one year of its acquisition was correctly brought to tax by the Assessing Officer as Short Term Capital Gain." 3. The brief facts of this case would show that the respondent - assessee had filed its return of income as "NIL" after claiming exemption under Section 11 of the I.T. Act, 1961. The original assessment of the respondent - assessee was completed on 13th February, 2006 under Section 143(3) of the I.T. Act, 1961. Thereafter, the Assessing Officer (for short "A.O.") recorded reasons for reopening the assessment under Section 147 of the I.T. Act, 1961 and notice under Section 148 was issued on 25th ....
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....stification for reopening the assessment. 6. Being aggrieved by this order of the CIT(A), the revenue approached the ITAT. The ITAT after hearing the revenue as well as the assessee, confirmed the order passed by the CIT(A) and dismissed the revenue's appeal. This is how the present appeal has come up before us under Section 260A of the I.T. Act, 1961. 7. In this factual backdrop, Mr. Suresh Kumar, learned advocate appearing on behalf of the appellant - revenue submitted that the ITAT erred in setting aside the re-assessment notice overlooking the crucial fact that the assessee's case was squarely covered by Explanation (1) to Section 147 of the I.T. Act, 1961. He submitted that the assessee had not disclosed fully and correctly computation of income and hence the property purchased and sold by the assessee within one year of its acquisition was correctly brought to tax by the A.O. as a Short Term Capital Gain. For all the aforesaid reasons, he submitted that the questions of law as reproduced earlier are substantial questions of law that need consideration by us and hence the appeal be admitted. 8. We are unable to agree with the submissions of Mr. Suresh Kumar. It is n....
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....r, 2010. In the reasons recorded, there is not even an allegation that there was any failure on the part of the assessee to disclose any material facts which in turn lead to escapement of income, let alone the details thereof. 10. It is now well settled that the reasons which are recorded by the A.O. for reopening the assessment are the only reasons which can be considered. No substitution or deletion is permissible. No addition can be made to those reasons. No inference can be allowed to be drawn based on reasons not recorded. This being the position in law, and admittedly there being no allegation in the reasons that there was any failure on the part of the assessee to disclose fully and truly any material fact, we find that the Tribunal was not incorrect in upholding the order of the CIT(A) and dismissing the appeal filed by the revenue. 11. In the view that we take, we are supported by a decision of Division Bench of this Court (to which one of us was the party, B. P. Colabawalla J.) in the case of City and Industrial Development Corporation of Maharashtra Ltd. Vs Assistant Commissioner of Income Tax-10(3) and Ors. [Writ Petition No. 1568 of 2013 decided on 24th March, 2014].....
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....Court in the case of Hindustan Lever Ltd. Vs. R B Wadkar, Asst Commissioner of Income Tax and Others reported in [2004] 268 ITR 332 (Bom) is well founded. At page 338 of the report, this Court held as under: "It is needless to mention that the reasons are required to be read as they were recorded by the Assessing Officer. No substitution or deletion is permissible. No additions can be made to those reasons. No inference can be allowed to be drawn based on reasons not recorded. It is for the Assessing Officer to disclose and open his mind through reasons recorded by him. He has to speak through his reasons. It is for the Assessing officer to reach the conclusion as to whether there was failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for the concerned assessment year. It is for the Assessing Officer to form his opinion. It is for him to put his opinion on record in black and white. The reasons recorded should be clear and unambiguous and should not suffer from any vagueness. The reasons recorded must disclose his mind. The reasons are the manifestation of the mind of the Assessing Officer. The reasons recorded should b....