2013 (12) TMI 1649 - AT - Income Tax

Re-opening of assessment u/s 147 - Assessee contended that reasons are vague and based upon no material and simply on the basis of some presumption of the Investigation Wing. - The learned DR stated that the Assessing Officer received definite information from the Director of Income Tax (Investigation) New Delhi and the assessment has been reopened on the basis of such specific and definite information. - HELD THAT- O n what basis the inference is drawn that the above amount received is accommodation entry received by the assessee has neither been mentioned in the assessment order nor the letter of DIT. In view of the above we hold that the information on the basis of which the Assessing Officer had initiated proceedings under Section 147 was vague and uncertain. Respectfully following the same we quash the notice issued under Section 147 of the Act and consequently the assessment order passed in pursuance thereto is also quashed. Decision in favor of assessee.

Summary

Issues involved: Validity of initiation of proceedings under Section 147 of the Income-tax Act, 1961.

Summary:
The appeal was against the order of learned CIT(A)-XXI, New Delhi for the AY 2004-05. Ground Nos.2 to 5 challenged the validity of initiating proceedings under Section 147. The assessee argued that the reasons for reopening the assessment were vague and based on presumption, citing relevant court decisions. The DR contended that specific information from the Investigation Wing justified the reopening. The Tribunal examined the reasons recorded for initiating proceedings under Section 147 and found them lacking in specificity and evidence. Citing precedents, the Tribunal held that the reasons did not meet the requirements of Section 147. As a result, the notice issued under Section 147 and the subsequent assessment order were quashed. With the assessment order quashed, the disputed additions by the assessee were no longer relevant, leading to the appeal being allowed.

The decision was pronounced on 31st December, 2013 by G. D. Agrawal (Vice President) and Aby T. Varkey (Judicial Member) of the Appellate Tribunal ITAT DELHI. The legal representatives for the parties were Salil Agarwal, Shailesh Gupta for the Appellant and S. N. Bhatia, DR for the Respondent.