AI Drafter 
TaxTMI 
TaxTMI 
2012 (4) TMI 817
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....u/s.147 and issuance of the notices u/s.148 by taking following grounds, which are verbatim in all the appeals: "1. On the facts and in the circumstances of the case and in law, the learned CIT (A) erred in dismissing the appeal. "2. On the facts and in the circumstances of the case and in law, the learned CIT (A) erred in dismissing the appeal without appreciating fully and properly the facts of the case. "3. On the facts and in the circumstances of the case and in law, the learned CIT (A) erred in upholding the validity of the proceedings initiated by issuance of notice u/s.148 of the I.T. Act." 2. The facts are common in all these appeals and which are revealed from the record as under. The Addl. DIT (Inv.) Unit-V, Mumbai sent information to the A.O. that all these assesses have claimed to have received about 27 gifts from different NRIs in the F.Ys. 1998-99 to 2004-05, aggregating about Rs. 30 lakhs, ranging from Rs. 50,000/- to Rs. 3 lakhs. It appears that there was survey action u/s.133A in the business premises of M/s. Stephen Optical Industries, M/s. Unity Opticians and M/s. Optico Enterprises in which all these assesses are partners. The A.....
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....ve" and that should reflect from the reasons recorded and only his intention to do something is not sufficient. He relied on the following precedents: (i) Prashant S. Joshi vs. ITO -189 Taxman 1(Bom); (ii) German Remedy Ltd. vs. Dy.CIT -285 ITR 26 (Bom) 6. He submits that the Tribunal has already considered the legality of the notices issued under sec. 148 by the A.O. in respect of two assesses i.e. Shri Pranlal P. Damani and Shri Alkesh P. Damani. In those cases, on the identical set of facts and on the identical reasons the A.O. has initiated the proceedings u/s.147 and issued the notices u/s.148. The Ld. Counsel filed the copies of the Tribunal order in the following cases, which are placed on record: (i) ITO, Mumbai vs. Pranlal P. Damani in ITA No.3747/M/2010 vide order dated 28.04.2011 and (ii) ITO, Mumbai vs. Alkesh P. Damani in ITA No.3748/Mum/2010 He pleaded for quashing notices issued u/s.148. Per contra the Ld. D.R. placed his heavy reliance on the decision of the Hon'ble Supreme Court in the case of ACIT vs. Rajesh Jhaveri Stock Brokers P. Ltd. 291 ITR 500. He submits that at the time of initiation proceedings u/s.147, it is not ....
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....l recording is that the assessee's investments have multiplied by 22 times within a span of 1½ years. Thereafter, only recording is that the long term capital gains are required to be scrutinised in the hands of the assessee. For scrutiny, notice under section 143(2) of the Act would suffice. The assessment cannot be re-opened for scrutining the same. There should be positive indication in the reasons recorded that the Assessing Officer had reason to believe that income chargeable to tax has escaped assessment. In this case, no such recording is there. This ground is, thus, decided in favour of the assessee and the order of the Commissioner (Appeals) is hereby upheld on this ground. "11. Since we have decided the issue of re-opening in favour of the assessee, the other issues raised by the Revenue become academic in nature, which need no separate adjudication by us." 8. The said order is followed in the case of another assessee i.e. Shri Alkesh P. Damani. 9. Let us see that how the reasons are recorded by the A.O., which are almost identical in all these cases. In the case of Jayesh P. Damani in ITA No.49/M/2012 the A.O. has furnished the reasons filed his let....
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....acquisition of the flat. The investment of the assessee was multiplied by 22 times within the span of 18 months(1 & ½ year) and, hence, transactions of long-term capital gain declared by assessees required to be scrutinised in the hands of the assessee. In the third paragraph the A.O. observed in respect of the gifts from various persons in the A.Y. 2000-01 to 2005-06 the genuineness of all these 'gifts' needs verification. Lastly, he observed that he has proposed to take those cases for scrutiny u/s.148. Overall reading of the reasons showed that the A.O. himself is not sure whether there is any escapement of income and reasons only shows his 'opinion' and 'belief'. Moreover, there is no positive reasoning that any income has escaped assessment or there is any understatement of income by these assesses. Though A.O. has made reference to the share transactions of all these assessees to save flying reference in the assessment order, there is no further discussion or any finding on said issue. The A.O. has only discussed the issue in respect of the gifts claimed to have been received by these assessees. 11. In the case of Prashant S. Joshi (supra) the Hon'ble jurisdictional....
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....ought to be placed on the judgment of the Supreme Court in Assistant Commissioner of Income Tax V/s. Rajesh Jhaveri Stock Brokers P. Ltd.8 The judgment of the Supreme Court in Rajesh Jhaveri has noticed the difference between the expression `intimation' and `assessment' and the Supreme Court held that in the scheme of things an intimation under section 143(1)(a) cannot be treated as an order of assessment. The Supreme Court held that there being no assessment under section 143(1)(a), the question of a change of opinion, as contended did not arise. The judgment of the Supreme also emphasises what is meant by the expression "reason to believe" and the nature of the belief that is to be formed by the Assessing Officer that the income for any assessment year has escaped assessment. The Supreme Court held that at the stage of the issuance of a notice under section 148, the Assessing Officer must have reason to believe that income has escaped assessment and at that stage an established fact that income has escaped assessment is not required. The Supreme Court held thus :- "Section 147 authorises and permits the Assessing Officer to assess or reassess income chargeable to....