9911796707
TMI Blog2011 (8) TMI 867X X X X Extracts X X X X X X X X Extracts X X X X ..... ot produce books of accounts for verification due to the huge time lag of about 15 years. 6. Your Appellant prays that the order of the Learned Commissioner of Income Tax (Appeals) be set aside." 3. Briefly stated, the facts of the case are that the assessee is a kirana merchant. In this case originally the return was processed u/s 143(1) of the IT Act on 17-01-2001. Later on, reassessment proceedings were initiated by issue of a notice u/s 148 of the IT Act dated 23-05-2001, after recording the reasons for the same. Reassessment was made on 31-03-2003 u/s 143(3) read with section 147 of the IT Act making an addition of Rs. 70,000/-. Aggrieved by this order, the assessee preferred appeal which was dismissed by the learned CIT(A) vide his order dated 28-04-2003. Aggrieved by the order of the learned CIT(A) the assessee preferred appeal second appeal and ITAT Ahmedabad vide order in ITA No. 4082/Ahd/2003 dated 13-06-2005 had set aside the matter to the file of the AO for considering the addition as well as for reopening of the assessment and to frame the order de novo after giving adequate opportunity of being heard to the assessee. 4. The learned CIT(A) considering the explanatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o which the appellant has avoided a reply. The onus is on the appellant to explain the sources, which it has not discharged. In the circumstances, the action of the AO in subjecting the addition of Rs. 70,000/- u/s 69 is confirmed. The action of the AO in reopening the original assessment (i.e., intimation) u/s 148 is also confirmed as sufficient material was there in the possession of the AO. 5. In the result, the appeal is dismissed." 5. The learned Counsel for the assessee reiterated the submissions made before the authorities below and referred to the copy of the reasons recorded for reopening of the assessment and submitted that in the reasons recorded there is a reference of M/s. Topandas Chellaram & Others inclusive of the assessee and in case of the assessee, purchase of demand draft is referred to from Baroda Traders Co-operative Bank Ltd., Hathikhana, Baroda to which the assessee has no concern. The assessee also filed confirmation from the said bank before the AO that no such demand draft was purchased by the assessee from Baroda Traders Co-operative Bank Ltd. Therefore, forming of the belief for escapement of assessment formed on non-existing reasons. The learned Coun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessing Officer was made aware of the situation by the investigation wing and there was no mention that these companies were fictitious companies. Neither the reasons in the initial notice nor the communication providing reasons remotely indicated independent application of mind. Though conclusive proof was not germane at this stage the formation of belief must be on the base of foundation or platform of prudence which a reasonable person was required to apply. From the perusal of the reasons recorded and the order of rejection of objections, the names of the companies were available with the authority and their existence was not disputed. The assessee in its objections had stated that the companies had bank accounts and payments were made to the assessee through banking channel. The identity of the companies was not disputed. Under these circumstances, the intimation of proceedings under section 147 and issuance of notice under section 148 of the Act were to be quashed." He has also relied upon the decision of the Hon'ble Gujarat High Court in the case of Sagar Enterprises v. Asstt. CIT [2002] 124 Taxman 641 in which it was held as under: "Conclusion: Notice under s. 148 issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in question. Notice u/s 148 of the IT Act was accordingly issued on 23-05-2001. Copy of the reasons recorded for reopening of the assessment is filed on record in which the AO has mentioned that the DDIT (Investigation), Baroda received a TEP in the case of M/s. Topandas Chellaram and others inclusive of the assessee in question alleging that demand drafts are purchased by them by making cash payment to Bharat Co-operative Bank Ltd., Fatehpura. It was further noted with regard to M/s. Topandas Chellaram that demand draft was purchased from Bharat Cooperative Bank Ltd. out of cash on account of undisclosed sources of income. As regards assessee is concerned, it was noted in the reasons that similar details were called for from Baroda Traders Cooperative Bank Ltd., Hathikhana, Baroda and statement of Bank Manager was recorded in which he has stated that majority of the drafts are made in cash had been issued to M/s. Mahadev Trading Co. i.e. the assessee in question. The AO on the basis of information received from the DDIT (Investigation) had reason to believe that Rs. 70,000/- for assessment year under appeal has escaped assessment. The assessee in the first round proceedings took u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as under: "Held, (i) that the Tribunal was right in canceling the reassessment as both the grounds on which the reassessment notice was issued were not found to exist, and, therefore, the Income-tax Officer did not get jurisdiction to make a reassessment." 7.1 The Hon'ble Bombay High Court in the case of Prasant S. Joshi v. ITO [2010] 324 ITR 154/189 Taxman 1 held as under: "The question as to whether there was reason to believe, within the meaning of section 147 that income has escaped assessment, must be determined with reference to the reasons recorded by the Assessing Officer. The reasons which are recorded could not be supplemented by affidavits." 7.2 The Hon'ble Punjab & Haryana High Court in the case of CIT v. Smt. Paramjit Kaur [2009] 311 ITR 38/[2008] 168 Taxman 39 held as under: "Held, that the Assessing Officer had not examined the information received from the survey circle before recording his own satisfaction of escaped income and initiating reassessment proceedings. The Assessing Officer had thus acted only on the basis of suspicion and it could not be said that it was based on belief that the income chargeable to tax had escaped income. The Assessing Officer ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
