2024 (4) TMI 346 - AT - Income Tax

Validity of reopening of assessment u/s 147 - Reason to believe - perusal of the Form 26AS initiating reassessment proceedings - as per DR there was no need for any tangible material for the ld AO to reopen the proceedings u/s 147 of the Act when the assessment was completed originally u/s 143(1) - CIT(A) quashed reassessment proceedings HELD THAT - We are unable to accept DR proposition as the existence of tangible material is prerequisite for reopening of an assessment and that tangible material should have live link or nexus with formation of belief for the ld AO to conclude that income of the assessee had escaped assessment. Under these circumstances alone the assessment could be reopened by the ld AO. This view of ours is fortified by the decision of Kelvinator of India Ltd 2010 (1) TMI 11 - SUPREME COURT . Admittedly in the instant case the reopening has been triggered only on reappraisal and re-verification of Form 26AS of the assessee which was very much available before the ld AO during the course of original assessment proceedings itself and there was absolutely no fresh information or tangible material that had come into the possession of the ld AO subsequent to conclusion of original assessment u/s 143(1) - Grounds raised by the revenue are dismissed.

Summary

Issues involved:
The judgment involves issues related to the validity of reassessment proceedings u/s 147 of the Income-tax Act, 1961, and the quashing of assessment orders by the Commissioner of Income Tax (Appeals).

Quantum Appeal (ITA No. 4491/Del/2019 for AY 2009-10):
The revenue challenged the decision of the Commissioner of Income Tax (Appeals) to quash the assessment u/s 147 r.w.s.143(3) based on various grounds. The Assessing Officer (AO) initiated reassessment proceedings due to alleged escapement of income, but the Commissioner found that the AO lacked tangible material for forming a belief about the escapement of income. The Commissioner emphasized the need for a live link between tangible material and the formation of belief for reopening an assessment. The reassessment proceedings were quashed as the reassessment was triggered solely based on information already available to the AO, with no fresh material supporting the reassessment. The Tribunal dismissed the revenue's appeal, upholding the quashing of the reassessment proceedings.

Separate Judgement:
The Tribunal also noted that since the entire reassessment proceeding was quashed, the concealment penalty levied u/s 271(1)(c) on the quashed reassessment proceedings was not valid and, therefore, dismissed the appeals of the revenue.