2018 (1) TMI 1728

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.... 2.The petitioner, a partnership firm represented by its partner V.Gurunathan, is aggrieved by an order passed by the second respondent rejecting the petitioner's objections for reopening of the assessment for the assessment year 1999-2000 by invoking the power under Section 147 of the Income Tax Act, 1961 (hereinafter referred to as "the Act"). The basis for reopening of the assessment is a statement, which is said to have been recorded from one of the partners of the firm by name, Shri S.Balasubramanian, during the course of survey conducted in the business premises of the petitioner on 06.03.2002. The respondent would state that in the said statement, the partner stated that there is an understatement of the cost of construction of ....

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....tioner disputed the correctness of the statement. If that is so, can the second respondent rely on the said statement and reopen the proceedings. 4.The counter affidavit proceeds to justify the impugned action by placing reliance on the decision of the Hon'ble Allahabad High Court in the case of Dr.S.C.Gupta vs. Commissioner of Income Tax reported in [2001] 248 ITR 782. This judgment was considered by the Hon'ble Division Bench of this Court in the case of Commissioner of Income-Tax v. S.Khader Khan Son reported in [2008] 300 ITR 157 (Mad). Among other things, the Court held that the statement recorded during the course of survey action under Section 133A of the Act shall not have any evidentiary value and solely based on the sai....

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.... from the Joint Commissioner of Income Tax, as per Section 151 of the Act. This has been clarified by the respondent in the counter affidavit stating that the approval was obtained on 10.08.2004, much prior to the issuance of the notice under Section 148 of the Act. Further, the averment in the reasons for reopening has been explained in the counter affidavit to be an inadvertent error. The submission of the revenue in this regard is acceptable. 7.However, I am satisfied that there is absolutely no basis for reopening of the assessment. That apart, though the second respondent seeks to bring out a case of underestimation in the cost of construction by referring to the statement of the partner, the second respondent himself called for a v....