TaxTMI 
TaxTMI 
TaxTMI 
2025 (7) TMI 747
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....essee filed its return of income on 14.10.2010 declaring total income of Rs. 10,97,140/-. Subsequently, proceedings were initiated under section 148 of the Income-tax Act, 1961 (for short 'the Act') on the basis of specific information received from office of Deputy Director of Income-tax (Inv.), Unit-1(2), New Delhi. Accordingly, notice u/s 148 was issued and served on the assessee on 31.03.2017 after obtaining approval from Pr.CIT-4, New Delhi. Based on the information received from DDIT (Inv.), AO observed that large scale transactions are carried out between sister concerns through a number of accounts. The transactions were found to be without any economic rationale and it is suspected that money laundering activities were being carrie....
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....and void ab initio. 2. That the learned CIT(Appeals) has erred in rejecting the grounds of appeal raised before him against the issuance or the notice u/s 148 or the Act beyond the statutory time allowed u/s 149 of the Act as also against the wholly wrong and arbitrary sanction u/s 151 of the Act which was granted without application of mind in the instant case. 3. That the Learned CIT (Appeals) has failed to appreciate that there was no relevant tangible material on the record of tile A.O. that could have enabled him to validly record any reason to believe that any income has escaped assessment in the instant case. That the notice u/s 148 off the Act was issued in the instant case only on the basis of suspicion and the CIT(A) ought to ....
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.... read out the reasons recorded by the AO and brought to our notice point no.1 of the notice in which AO has observed that it is suspected that money laundering activity is being carried out by these accounts and stressed the point that it is only an issue purely on the basis of suspicion. However, he brought to our notice point no.2 of the notice wherein again AO recorded that it is suspected that Tarun Goyal, CA operating from Karol Bagh, New Delhi is involved in purchase of existing companies and formation of new one. Again he pointed out point no.3 wherein it is mentioned that suspected money laundering activities were carried out mainly through HDFC Bank Ltd., Karol Bagh, New Delhi and Axis Bank through Delhi based branches and technica....
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....ge 10 of the paper book wherein assessee has raised several objections. One of them is the reasons recorded by the AO are undated. Further he brought to our notice pages 11 to 13 of the paper book wherein assessee has raised several objections and brought to our notice page 15 of the paper book wherein AO has disposed off the objections raised by the assessee. He submitted that the AO has not disposed off various issues raised by the assessee including the undated recording of reasons. In this regard, he submitted that the reasons recorded by the AO are not cogent enough to reopen the assessment and the AO has not recorded the quantum of escapement of income and further he submitted that all bank transactions are duly recorded in the books ....
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....n the basis of which the proceedings were initiated in the case of Tarun Goyal and we observed that the Investigation Wing has investigated the issue and directed the Axis Bank and HDFC Bank to submit the transactions relating to Tarun Goyal. The AO has not brought on record any cogent material linking the assessee and Tarun Goyal while recording the reasons. He initiated the proceedings only on the basis of suspicion and no cogent material brought on record linking the assessee any way in these transactions. We observed that the assessee has already recorded various transactions in his books of account. Further we observed that the reasons recorded by the AO are on the basis of initiating proceedings in the case of the companies. However, ....
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....lished principle of law that suspicion and conjecture cannot form the basis for triggering reassessment proceedings qua an assessee. 18. In our view, the AO did not employ diligence while triggering the reassessment proceedings against the petitioner/assessee. It appears that because AO realized that the information received by him from ITO (Nahan) via letter dated 12-3-2018 concerned the preceding period, he attempted to commence reassessment proceedings under section 147/148 of the Act by simply comparing the 'source of funds' reflected under various heads in the balance sheets for the preceding AY and the AY in issue. Furthermore, that there was a gap in the enquiry is evident from the following. First, the respondent/revenue e....