9911796707
TMI Blog2007 (5) TMI 184X X X X Extracts X X X X X X X X Extracts X X X X ..... t was delivered by 1 MADAN B. LOKUR, J . The Revenue is aggrieved by an order dated 2nd March, 2006 passed by the Income Tax Appellate Tribunal, Special Bench SMC, New Delhi in ITA No.4824- 25/Del/2004 relevant for the assessment year 1997-98. 2 . The assesses had purchased shares of M/s Globe Commercials Ltd. through M/s Maheshwari Sons, stock and share broker. Subsequently, these shares were sold at a much higher value through another broker Satish Kumar Goel, proprietor of R.K. Aggarwal and Co. The assesses had disclosed long term capital gains arising from the transaction. 3 . It appears that some intra-departmental information was received by the Assessing Officer to the effect that the assesses had taken a bogus entry of l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rred appeals before the Commissioner of Income Tax (Appeals) [CIT (A)] and by separate orders, the CIT (A) partly allowed the appeals filed by the assesses. Feeling aggrieved, the assesses then approached the Tribunal which decided the appeals in their favour and concluded that the initiation of proceedings was vitiated. Accordingly, the assessment made was annulled and the appeals allowed. 9 . The Revenue has preferred two separate appeals against the combined order passed by the Tribunal. We heard submissions made by learned counsel for the parties and are of the view that there is no error in the opinion expressed by the Tribunal and that no substantial question of law arises for our consideration. 10 Broadly speaking, the view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r issuing a notice under Section 148 of the Act. In the decision of the Supreme Court also, when the matter was sent to the Commissioner, in the pro forma against the question "Whether the Commissioner is satisfied that it is a fit case for the issue of notice under Section 148" he noted "Yes" And affixed his signatures. The Supreme Court was of the view that upon reading the report given by the Income Tax Officer (which is not the same as reasons for issuing a notice), the Commissioner could not have come to the conclusion on the material before him that it is a fit case for issuance of a notice under Section 148 of the Act. 12 . From the decision of the Supreme Court, it is clear that a mere statement of facts in the form of a rep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e no reasons, then the entire foundation for initiating the proceedings is bad and the notice initiating proceedings must be quashed. 15 At this stage, it is worth recalling that in Ganga Saran and Sons Pvt. Ltd. v. Income-tax Officer and Others, (1981) 130 ITR 1, the Supreme Court noted that the expression "reason to believe" as occurring in Section 147 of the Act is stronger than the expression "is satisfied". In other words, mere satisfaction of the Assessing Officer for the issuance of a notice is not enough "there must be reasons on record which have led him to believe that a notice should be issued. 16. In United Electrical Co. Pvt. Ltd. v. Commissioner of Income-tax, (2002) 258 ITR 317, this Court considered the entire issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n place. There are absolutely no details available and the information supplied is extremely scanty and vague. In so far as the basis for the reasons is concerned, even this is absent. 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 has not even recorded his satisfaction about the correctness or otherwise of the information or his satisfaction that a case has been made out for issuing a notice under Section 148 of the Act. Read in this light, what has been recorded by the Assessing Officer as his "reasons to believe" Is nothing more than a report given by him to the Commissioner of Income Tax" As held ..... X X X X Extracts X X X X X X X X Extracts X X X X
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