9911796707
TMI Blog2011 (1) TMI 1462X X X X Extracts X X X X X X X X Extracts X X X X ..... ent year 2004-05. 2. The first issue in this appeal of Revenue is against the order of CIT(A) in deleting in quashing the notice u/s.148 of the Act made by Assessing Officer. 3. The brief facts leading to the above issue are that assessee is engaged in the business of fabrication and civil maintenance work on job work basis mainly for L & T Ltd. as also for certain other companies. The assessee on receipt of the notice u/s 148 of the Act the assessee had requested for a copy of the reasons recorded before issuing such notice vide letter dated 17-10- 2007 and Assessing Officer had furnished the following reasons:- "In this case, return of income was filed on 1.11.2004 declaring total income at ₹ 3,11,475. The same was processed u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT (1979) 119 ITR 996, the Hon. Supreme Court held that the information of the audit party on a point of law cannot be the basis for initiating reassessment proceedings. It was held that the opinion of the Audit Party is still an opinion, but is not information which is good enough to justify the reopening of the assessment. This view of the Hon. Supreme Court was followed in CIT Vs. Muittur Chemicals and Industrial, Corpn. (2000) 242 ITR 119 (Mad). The Hon. Supreme Court then reiterated the view taken in Indian & Eastern News Paper Society Ltd. in the case of CIT Vs. Lucas TVS Ltd.(2001) 249 ITR 306, where the Hon. Supreme Court then reiterated the view taken in Indian & Eastern News Paper Society Ltd. in the case of CIT Vs. Lucas TVS Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ified, if the AO acts purely on an objection raised by the audit party without applying his own mind. In the case of assessee, while recording the reasons for reopening, the AO merely reproduced the objection raised by the audit party. There was absolutely no application of his own mind nor did the audit party point out either any factual error or the correct position of law. The only ground was that, the net profit disclosed by the assessee as compared to the total turnover was low at 1.93%, which required verification. There was no specific finding given that a particular income under a particular head had escaped assessment. Sec. 147 of the IT Act begins with the words 'If the AO has reason to believe that any income chargeable to tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Corpnh. V. ND Bhatt IAC, (1982) 138 ITR 742. 5.3 Taking the above discussion into consideration, it is held that the AO was not competent to reopen the assessment merely on the basis of an audit objection especially when the audit objection itself was vague and baseless. It did not point out either any factual error or the correct position of law. On the other hand, the AO failed to apply his mind to the issue. He merely sought to verify the net profit disclosed by the assessee which allegedly was very low. This was a subject-matter of proceedings u/s.143(2) and the reassessment proceedings could not be used as an extension and/or substitution for such power. The non-application of mind by the AO and his failure to record his own reason ..... X X X X Extracts X X X X X X X X Extracts X X X X
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