2013 (6) TMI 719 - AT - Income Tax

Summary

Issues involved: Appeal against CIT(A) order quashing assessment u/s 147 of the I. T. Act.

Summary:
The Revenue appealed against the CIT(A) order quashing the assessment u/s 147 of the I. T. Act, contending that the CIT(A) erred in annulling the assessment order passed by the Assessing Officer. The Assessing Officer received information that the assessee received a gift of Rs. 5,01,250/- not reflected in the return filed, leading to the belief that income chargeable to tax had escaped assessment. The assessee objected to the reopening of assessment, stating lack of valid reasons for forming such a belief. The CIT(A) annulled the assessment, citing insufficient reasons for reopening. The Revenue appealed to the Tribunal, but the Tribunal upheld the CIT(A) decision, noting the absence of independent material before the Assessing Officer to support the belief of income escaping assessment. Consequently, the appeal of the Revenue was dismissed.

In the detailed analysis, the CIT(A) found that the Assessing Officer initiated proceedings u/s 147/148 without verifying the contents of the ADI report, leading to a case of borrowed satisfaction. The appellant requested to produce the donor for confession, but no statement or confession was provided. The CIT(A) considered various case laws cited by the appellant's A.R., supporting the contention that the reassessment proceedings lacked validity due to the absence of opportunity for cross-examination. The CIT(A) concluded that the action taken by the Assessing Officer u/s 147/148 was not maintainable and annulled the assessment order. The Tribunal concurred with the CIT(A), emphasizing the necessity of independent material before initiating proceedings u/s 147 of the Act, which was absent in this case. Therefore, the Tribunal upheld the CIT(A) decision to annul the assessment, resulting in the dismissal of the Revenue's appeal.