TaxTMI 
TaxTMI 
2017 (2) TMI 1528
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.... AO initiated re-assessment proceeding u/s 147 of the Act and notice u/s 148 of the Act was issued on 28.02.2013. The assessee after receiving the copy of reasons recorded, filed return of income and also filed objections against the initiation of the proceedings. However, the AO without passing any speaking order proceeded further. As per the reasons recorded during the year under consideration assessee had claimed solicitors fees paid to Chitnis Vaithy & Co. amounting to Rs. 11,00,000/- and an amount of Rs. 8,39,475/- on account of professional charges paid to M.R.Patil Consulting. On perusal of the bill it was noticed that the same was not allowable in the assessment year under consideration. Moreover, on both these amounts, the assessee had not deducted TDS. Since the assessee's income for Asst. Year 2006-07 has been escaped assessment in respect of above two payments, proceedings u/s 147 was initiated. In response to the notice u/s 148, 143(2) and 142(1) of the Act, the assessee furnished relevant details through its authorized representative. After hearing the assessee the A.O added an amount of Rs. 19,39,475/- to assessee's total income. During the financial year relevant to....
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....ny occupancy certificate was issued by the local authority for claiming the said deduction. 4. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in directing the A.O to allow deduction claimed u/s 80IB(10) of Rs.25,94,15,537/- ignoring the fact that the assessee has not complied with the conditions laid down for claiming deduction u/s 80-IB(10) of the Act. 5. On the other hand the assessee has filed cross objection against the order of the Ld. Commissioner of Income Tax (A)- 34, Mumbai, raising the following effective grounds : 1. On the facts and circumstances of the law, the Ld. CIT(A) has erred in confirming initiating of reassessment proceeding u/s 147 of the I.T. Act, 1961. 2. On the facts and circumstances of the law, the Ld. CIT(A) has failed to consider that: (a) Reassessment proceeding cannot be initiate after four years when assessee has disclosed all the particulars fully and truly and order is passed by A.O u/s 143(3) of the I.T. Act, 1961. (b) Reassessment proceedings can be initiate only when income escaping assessment but in present case survey was conducted and after detail investigation deduction u/s 80IB(10) was partly a....
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....aced on record. It is an admitted fact that proceedings under section 147 of the Act, in this case has been done after the expiry of four years from the end of the relevant assessment year. As per section 147, if the AO has reason to believe that any income chargeable to tax has escaped assessment he may assess or re-assess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings provided that where an assessment under sub section (3) of section 143 or section 147 has been made for the relevant assessment year, no action shall be taken under section 147 after expiry of four years from the end of the relevant assessment years unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return u/s 139 or in response to notice issued u/s 142 (1) or section 148 or to disclose fully and truly all material facts necessary for his assessment for the assessment year. 9. We noticed that in the present case the AO has not pointed out any failure on the part of the assessee in making disclosure fully and ....
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....ed further and passed order u/s 143 (3) r.w.s. 147 of the Act. So it is apparent that the AO has not followed the law laid down by the Hon'ble Supreme Court in the aforesaid case. 12. The third issue raised by the Ld. Counsel is regarding subjective satisfaction of the AO to the effect that any taxable income has escape assessment. The contention of the Ld. Counsel for the assessee is based on the ratio laid down by the Hon'ble Supreme Court in Adani Exports Vs. Dy. CIT 240 ITR 224, relevant portion of the judgment reads as under:- "It is true that satisfaction of the Assessing Officer for the purpose of reopening is subjective in character and the scope of judicial review is limited. When the reasons recorded show a nexus between the formation of belief and the escapement of income, a further inquiry about the adequacy or sufficiency in the material to reach such belief is not open to be scrutinized. However, it is always open to question existence of such belief on the ground that what has been stated is not correct state of affairs existing on record. Undoubtedly, in the case of record, burden lies, and heavily lies, on the petitioner who challenges it. If the petitioner is a....