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TMI Blog2014 (12) TMI 465X X X X Extracts X X X X X X X X Extracts X X X X ..... f assessment - the AO has not correctly assumed jurisdiction u/s. 147 /148 of the IT Act – the order is to be set aside – Decided in favour of assesse. - ITA No. 74 & 75/Agra/2014 - - - Dated:- 30-4-2014 - SHRI BHAVNESH SAINI AND SHRI PRAMOD KUMAR, JJ. For Appellant by :- Shri Manoj Badal, C.A. For Respondent by :- Smt. Anuradha, Jr. DR ORDER Per Bhavnesh Saini, J.M.: This order shall dispose of both the above appeals filed by the assessee against different orders of ld. CIT(A)-II, Agra dated 04.10.2013 for the assessment year 2006-07 and dated 28.11.2013 for the assessment year 2005-06. In both the appeals, the assessee challenged the reopening of assessment u/s. 148 of the IT Act and in adopting wrong rate of valuation as on 01.04.1981 and disallowing expenses with regard to sale of land. 2. In assessment year 2006-07, the appeal is time barred by three days. Considering the explanation of the assessee and the ld. DR has no objection thereon, the nominal delay of three days in filing the appeal is condoned. 3. In assessment year 2006-07, briefly, the facts of the case are that while completing the assessment proceedings u/s. 143(3) in the case of M/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n ITA No. 20/Agra/2014 has been decided by the ITAT, Agra Bench vide order dated 28.02.2014 on identical facts and reopening of assessment have been quashed and additions have been deleted. Copy of the order is filed in the paper book. The ld. DR accepted that the issue is covered in favour of the assessee on identical facts by the order of ITAT, Agra Bench in the case of brother of assessee and joint owner of the property under reference, Shri Rameshshwar (supra). 6. On consideration of the facts of the case in the light of reasons for reopening of assessment recorded in the case of assessee and his brother Shri Rameshshwar, We find that the issue is identical in the case of assessee with the facts of the case of his brother Rameshwar, who jointly held the property under reference. The issue is covered in favour of the assessee by the order of ITAT Agra Bench in the case of Shri Rameshwar S/o Dayaram alias Kallu (supra), in which the ITAT Agra Bench held in para 5 to 7 as under : 5. The assessee in the present appeal, challenged the reopening of the assessment and learned counsel for the assessee at the outset submitted that on identical issue, ITAT, Agra Bench in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T Act, 1961. Accordingly, proceedings u/s. 147 is initiated and issued notice u/s. 148 of the IT Act, 1961. 2.1 The assessee challenged the reassessment proceedings and addition on merits before the ld. CIT(A) and submissions of the assessee have been incorporated in the impugned order. It was explained that the value of land as on 01.04.1981 was higher than the consideration amount. Therefore, no return of income was filed being the income not liable for income-tax. It was explained that the reasons recorded for reopening of assessment are without date. The reasons were recorded on the basis of information received from another officer and the AO has not applied his mind to satisfy himself through his own enquiry. There s no mention that the AO was having reason to believe that the assessee has concealed the particulars of income. The sale consideration cannot be treated as income. The AO issued notice to verify the transaction and was not aware whether capital gains arise or not. Expression reason to believe, does not mean a purely subjective satisfaction on the part of the AO. The reasons must be held in good faith and cannot be mere pretence. The detailed submissions of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... action. Since no reply was submitted in this regard before the AO, therefore, the AO presumed that the income chargeable to tax has escaped assessment and he initiated proceedings u/s. 147 of the IT Act. The reasons recorded by the AO, therefore, do not satisfy the requirement of section 147 of the IT Act. The AO had not examined the information received from the ITO 6(3), Jhansi before recording the reasons for reopening of assessment. The AO had acted only on the basis of suspicion and it could not be said that it was based on belief that income chargeable to tax had escaped assessment. The Assessing Officer had to act on the basis of reason to believe and not on reason to suspect . The information received from ITO 6(3) did not indicate as to how capital gains arise in the case of assessee and the AO merely accepted truth in vague information in a mechanical manner and put the assessee under obligation to file reply to the same. Merely because no reply was filed, the AO acted in haste and initiated proceedings u/s. 147 of the IT Act without recording satisfaction for initiation of proceedings in the matter. Hon ble Supreme Court in the case of Sheo Nath Singh vs. Appellate As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e capital gains which in this case were shares. There was no information which shares had been transferred and with whom the transaction had taken place. The Assessing Officer did not verify the correctness of the information received by him but merely accepted the truth of the vague information in a mechanical manner. The Assessing Officer had not even recorded his satisfaction about the correctness or otherwise of the information for issuing a notice under section 148. What had been recorded by the Assessing Officer as his reasons to believe was nothing more than a report given by him to the Commissioner. The submission of the report was not the same as recording of reasons to believe for issuing a notice. The Assessing Officer had clearly substituted form for substance and therefore the action of the Assessing Officer was not sustainable. 4.2 Hon ble Punjab Haryana High Court in the case of CIT vs. Smt. Paramjit Kaur, 311 ITR 38 held The assessee filed her original return declaring nil income. The Assessing Officer initiated reassessment proceedings on the basis of information received from the survey circle that the assessee had got prepared a demand draft for a s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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