9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (11) TMI 1626 - AT - Income TaxReopening of assessment u/s 147 - Addition being the gift received from various relatives - HELD THAT - No doubt that assessee has filed various decisions of the Hon ble High Courts, but the decision of the Hon ble Gujarat High Court reported in Manzil Dineshkumar Shah 2018 (5) TMI 1176 - GUJARAT HIGH COURT is directly applicable in the case in hand by which the legal issues involved in this appeal are squarely covered in favour of the assessee wherein as has held that reopening of the assessment would not be permitted for a fishing or a roving inquiry, because in the assessment the AO has gone through all the facts and taken one decision. The notice u/s. 148 of the I.T. Act has been issued on the income which according to the reopening subject has already been disclosed by the assessee in the original return of income and has also been enquired and taken one decision. Thus notice of reopening u/s. 148 of the Act on this issue was merely for making fishing or roving inquiries which would not permit the requirement of reopening. Thus reassessment in dispute is hereby quashed by allowing the appeal of the assessee.
Issues Involved
1. Validity of the assumption of jurisdiction under sections 147/148 of the Income Tax Act, 1961. 2. Validity of the reason to believe for reassessment under sections 147/148. 3. Legitimacy of the addition of ?40 lacs as a gift received from relatives. 4. Legitimacy of the addition of ?10 lacs received from the mother. 5. Liability to pay interest under sections 234B/234C of the Act. Detailed Analysis 1. Validity of the Assumption of Jurisdiction under Sections 147/148 The assessee contested that there was no valid assumption of jurisdiction under sections 147/148 of the Income Tax Act, 1961. The tribunal analyzed the reasons recorded by the Assessing Officer (AO) for issuing the notice under section 148. It was noted that the AO had issued the notice for a "deep verification" of the information received, which is not a valid ground for reopening an assessment. The tribunal relied on the decision of the Hon’ble Gujarat High Court in the case of Principal Commissioner of Income Tax vs. Manzil Dineshkumar Shah, where it was held that reopening of assessment cannot be permitted for a fishing or roving inquiry. Consequently, the tribunal found the assumption of jurisdiction to be invalid and quashed the reassessment. 2. Validity of the Reason to Believe for Reassessment under Sections 147/148 The tribunal scrutinized whether there was a valid "reason to believe" that income had escaped assessment, as required under sections 147/148. It was observed that the AO's reason for reopening was based on information that required "deep verification," which does not constitute a valid reason to believe that income had escaped assessment. The tribunal cited the Gujarat High Court's decision, emphasizing that the AO must have a concrete belief based on tangible material, not merely an intent to conduct further verification. Thus, the tribunal ruled that the reassessment was invalid due to the lack of a valid reason to believe. 3. Legitimacy of the Addition of ?40 Lacs as a Gift Received from Relatives Although the assessee challenged the addition of ?40 lacs received as a gift from various relatives, the tribunal did not adjudicate on this issue. Since the reassessment proceedings were quashed on legal grounds, the tribunal found it unnecessary to address the merits of this addition. This issue was rendered academic and not examined further. 4. Legitimacy of the Addition of ?10 Lacs Received from the Mother Similar to the issue of the ?40 lacs gift, the addition of ?10 lacs received from the mother was also not adjudicated on its merits. The tribunal focused on the validity of the reassessment proceedings and, having quashed them, did not find it necessary to delve into the specifics of this addition. 5. Liability to Pay Interest under Sections 234B/234C The assessee denied liability to pay interest under sections 234B/234C of the Act. This issue was also not specifically addressed by the tribunal, as the primary focus was on the legality of the reassessment proceedings. With the reassessment being quashed, the question of interest liability became moot. Conclusion The tribunal quashed the reassessment proceedings on the grounds that the assumption of jurisdiction and the reason to believe were invalid under sections 147/148 of the Income Tax Act, 1961. The tribunal relied heavily on the precedent set by the Hon’ble Gujarat High Court in the case of Principal Commissioner of Income Tax vs. Manzil Dineshkumar Shah. Consequently, the additions made and the interest liability under sections 234B/234C were not adjudicated on their merits, as the reassessment itself was deemed invalid. The appeal filed by the assessee was allowed.
|
