TaxTMI 
TaxTMI 
TaxTMI 
2017 (10) TMI 1469
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....sessment and merely relied on the information received from AIR, which is vague, incorrect and baseless, hence, the proceedings initiated is illegal, and bad in law and without jurisdiction. 4) That, the assessment order passed under Section 144/147 and the addition made are illegal, bad in law and without jurisdiction. The CIT(A) erred in upholding the same." 2. At the outset, the learned counsel for the assessee Mr. Ankit Gupta, Advocate pointed out at PB 17, the reasons recorded by the AO which are reproduced for the sake of convenience hereinbelow:- "In this case as per information available with his office the assessee has purchased an immovable property for Rs. 1,15,00,000/- during F.Y. 2007-08 relevant to A.Y. 2008-09. To verify the source of investment in the property, letters dated 27.01.2015 & 06.02.2015 were issued to the assessee requesting therein to submit the copy of ITR of the relevant year filed by him. Further, Inspector of this ward has served the letter on the above assessee personally for fixing the date 10.03.2015 for compliance but on the date fixed assessee neither submitted the reply nor attended the office, which shows that the assessee is delib....
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....elieve that income to the tune of Rs. 2,47,468 has escaped assessment because the assessee has failed to disclose full and true particulars of his income. Issue notice u/s 148 of the I.T. Act, 1961. Sd/- (RANJITISSAR) INCOME TAX OFFICER WARD 33(4), NEW DELHI" 6. From the reasons recorded it is apparent that the AO proceeded to initiate proceedings and to issue notice u/s 147/148 of the act on the basis of AIR information and without verifying the same from the relevant assessment record of the assessee wherein the assessee filed copies of the letters submitted to the DCIT, Banglore on 8.10.2007 in reply to notice u/s 142(1) of the Income Tax Act, 1961 (for short the Act) dated 15.9.2007 wherein the assessee informed that the payments are made out of his current account in the name of Mohan Brothers which is debiter to personal A/c in the firm M/s. Mohan Brothers. The Ld. AR has not disputed that copies of these notices and reply of the assessee to DCIT Banglore was placed on the record during original assessment proceedings. 7. In the light of above noted facts it is amply dear that the AO proceeded to take action and to issue notice u/s 148 of the Act without application of ....
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....sessment. The Supreme Court disagreed and observed that the AO "had not even come to a prima facie conclusion that the transactions to which he referred were not genuine transactions. He appeared to have had only a vague felting that they may be' "bogus transactions'." It was further explained by the Supreme Court that: "Before issuing a notice under S. 148, the ITO must have either reasons to believe that by reason of the omission or failure on the part of the assessee to make a return under S. 139 for any assessment year to the ITO or to disclose fully and truly all material facts necessary for his assessment for that year, income chargeable to tax has escaped assessment for that year or alternatively notwithstanding that there has been no omission or failure as mentioned above on the part of the assessee, the ITO has in consequence of information in his possession reason to believe that income chargeable to tax has escaped assessment for any assessment year. Unless the requirements of cl. (a) or cl. (b) of S. 147 are satisfied, the ITO has no jurisdiction to issue a notice under S. 148." The Supreme Court concluded that it was not satisfied that the ITO had any materi....
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....ssessee has escaped assessment on account of failure on the part of the Assessee to make a return or to disclose fully and truly all material facts necessary for his assessment. Thus, in order to reopen an assessment which is beyond the period of four years from the end of the relevant assessment year, the condition that there has been a failure on the part of the Assessee to truly and fully disclose all material facts must be concluded with certain level of certainty. It is in the aforesaid context that this Court in M/s Haryana Acrylic Manufacturing Co. (P) Ltd. (supra) explained that the ratio of the decision in Phool Chand Bajrang Lai (supra) may not be entirely applicable since the same was in respect of Section 147(a) as it existed prior to the amendment. " 12. In the present case, after setting out four entries, stated to have been received by the Assessee on a single date i.e. 10th February 2003, from four entities which were termed as accommodation entries, which information was given to him by the Directorate of Investigation, the AO stated: "I have also perused various materials and report from Investigation Wing and on that basis it is evident that the assessee company ....
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....ument of the revenue that an intimation cannot be equated to an assessment, relying upon certain observations of the Supreme Court in Rajesh Jhaveri (Supra) would also appear to be self-defeating, because if an "Intimation"is not an "assessment" then it can never be subjected to section 147 proceedings, for, that section covers only an "assessment" and we wonder if the revenue would be prepared to concede that position. It is nobody's case that an "intimation" cannot be subjected to section 147 proceedings; all that is contended by the assessee, and quite rightly, is that if the revenue wants to invoke section 147 it should play by the rules of that section and cannot bog down. In other words, the expression "reason to believe" cannot have two different standards or sets of meaning, one applicable where the assessment was earlier made under section 143(3) and another applicable where an intimation was earlier issued under section 143(3) and another applicable where an intimation was earlier issued under section 143(1). It follows that it is open to the assessee to contend that notwithstanding that the argument of "change of opinion" is not available to him, it would still be open t....