TaxTMI 
TaxTMI 
2025 (6) TMI 966
X X X X Extracts X X X X
X X X X Extracts X X X X
.....03.2023, being without jurisdiction, kindly be quashed. 3. The very action taken u/s. 147 r/w 148 is bad in law without jurisdiction and being void ab-initio, the same kindly be quashed. Consequently, the impugned assessment framed u/s. 147 r.w.s 144B dated 15.01.2024 also kindly be quashed. 4. The Id. CIT(A) completely acted beyond jurisdiction by finding new sources of income and taking up new issues, which were beyond the controversy raised before him. Thus, having decided the subjected issue raised before him in favour of the appellant, the Ld. CIT(A) could not have widened the scope of the such appeal. Therefore, this part of the impugned order of the Ld. CIT(A) deserves to be quashed and set aside. 5. The Ld. CIT(A) also seriously erred in law as well as on the facts of the case in directing the AO to adjudicate new issues, which results in implied enhancement of the income, without issuing the statutory notices as mandated by provisions of S. 251 (2) of the Act. The direction so given by the Ld. CIT(A) tantamount to enhancement and being in violation of S. 251(2), the relevant part of the impugned order of the Ld. CIT(A) deserves to be quashed and....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... whether the action taken u/s. 148 of the Act is legally tenable or not. On this issue there is an established position of law that the issue mentioned in the reasons for re-opening has to be disallowed/added back then only further additions/disallowances can be made. 4. In this case, reasons assigned for re-opening was cash deposit in the Central Cooperative Bank Ltd., The Uniyara, Tonk, Rajasthan amounting to Rs. 1,51,68,000/-, whereas there is no addition made on this account and rather a disallowance was made amounting to Rs. 13,04,658/- u/s. 80P of the Act claimed by the assessee, which is not sustainable in law. No doubt, a separate proceeding u/s. 148 of the Act can be issued against the assessee on this issue, if possible, but in this proceeding, action of the authorities below is not sustainable as per law. Our view is being further fortified by the authority of the Hon'ble Apex Court in the case of [1976] 103 ITR 437 (SC) Income-tax Officervs. Lakhmani Mewal Das as under: Two conditions have to be satisfied before an ITO acquires jurisdiction to issue notice under section 148 in respect of an assessment beyond the period of four years but within a period of ei....
X X X X Extracts X X X X
X X X X Extracts X X X X
....re, not a justiciable issue. It is, of course, open to the assessee to contend that, the ITO did not hold the belief that there had been such non-disclosure. The existence of the belief can be challenged by the assessee but not the sufficiency of the reasons for the belief. The expression "reason to believe" does not mean a purely subjective satisfaction on the part of the ITO. The reason must be held in good faith. It cannot be merely a pretence. It is open to the Court to examine whether the reasons for the formation of the belief have a rational connection with or a relevant bearing on the formation of the belief and are not extraneous or irrelevant for the purpose of the section. To this limited extent, the action of the ITO in starting proceedings in respect of income escaping assessment is open to challenge in a Court of law. Reference to the names of 'N', 'D' 'S' in the report of the ITO to the Commissioner of in the instant case did not stand on a better footing than the reference to the three names in the report made by the ITO in the case of Chhugamal Rajpal v. S.P. Challita [1971] 79 ITR 603 (SC). Therefore, it was that the secon....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e in section 34 of the Act of 1922, at one time before its amendment in 1948, are not there in section 147 of the Act of 1961, would not lead to the conclusion that action can now be taken for reopening assessment even if the information is wholly vague, indefinite, far-fetched and remote. The reason for the formation of the belief must be held in good faith and should not be a mere pretence. The powers of the ITO to reopen assessment, though wide, are not plenary. The words of the statute are "reason to believe" and not "reason to suspect". The reopening of the assessment after the lapse of many years is a serious matter. The Act, no doubt, contemplates the reopening of the assessment if grounds exist for believing that income of the assessee has escaped assessment. The underlying reason for that is that instances of concealed income or other income escaping assessment in a large number of cases come to the notice of the income-tax authorities after the assessment has been completed. The provisions of the Act in this respect depart from the normal rule that there should be, subject to right of appeal and revision, finality about orders made in judicial and quasi-judicial ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion 143 a presumption can be raised that such an order has been passed on application of mind. [Para 19] The revenue has failed to show why the presumption should not be applied in the present case. Further, it can also be seen from the reasons recorded that there was no new material which had come to the notice of the Assessing Officer and the entire reference in the reasons recorded is only to the material on record. [Para 20] In the facts of the present case, it could be seen that there was no new material in the possession of the Assessing Officer. Nothing new had happened, neither was there any change in the applicable law, which would have warranted the reopening of the case. It clearly suggests that in the garb of reopening the assessment, the Assessing Officer was reviewing the earlier order of assessment. In the absence of any new tangible material available with the Assessing Officer, and in view of the fact that there is a general presumption that an order of assessment under section 143(3) has been passed after proper application of mind and considering the fact that in the present case, the Assessing Officer had sought clarification with regard to the....