9911796707
TMI Blog2017 (4) TMI 188X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment years on scrutiny basis under Section 143(3) of the Income Tax Act, 1961 [hereafter "the Act"]. While so, on the basis of the information said to have been received, the Assessing Officer sought to reopen these completed assessments and issued notices under Sections 147/148 of the Act. The relevant reasons furnished in respect of each AY read as follows: "AY 2003-04 Return declaring loss of Rs. 1,99,75,520/- was filed by assessee on 22.11.2003. Assessment u/s 143(3) was completed on 24.03.2006 at a total loss of Rs. 1,24,75,520/-. Information was received from DRI. Regional Unit Jaipur and passed on this office that Central Excise Commissioner, Jaipur 1 detected bogus purchase made by assessee company from M/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eived for the period 17.9.02 to 20.05.05 and the amount of purchases (bogus) for the period under consideration amounted to Rs. 74.08 lakh. In view of the above, I have reason to believe that income to the tune of Rs. 74.08 lakh has escaped taxation." 2. The CIT(A) granted relief to the assessee in the appeals preferred by it. The Revenue approached the ITAT which was of the opinion that having regard to the "reasons to believe" that the Revenue relied upon, valid reassessments could not be completed. In other words, it was stated that the reasons recorded were insufficient for a legal and valid reassessment proceedings. In this, the ITAT relied upon Haryana Acrylic Manufacturing Co. v. CIT (Delhi) 2009 (308) ITR 38 and WEL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lied upon the judgment in Chhugamal Rajpal v. S.P. Chaliha 1971 (79) ITR 603 (SC) and contended that the mere incantation of the reasons to believe is inadequate for a valid notice. It is also submitted that the according of permission in a mechanised manner vitiates/defeats the purpose of conditions mandated under Section 151(1). 6. Elaborating on this, learned counsel submitted that in scrutiny assessments, the authorisation is seen as a safeguard to protect the assessee from arbitrary exercise of powers by the AO. 7. In the present case, no application of mind by the higher authority while granting permission resulted in an invalid notice under Section 147. Though the ITAT granted relief, it did not record any reasons for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ght to weigh with the Revenue and are considered valid are the existence of tangible material or information - in the light of the judgment in CIT v. Kelvinator of India. [2010] 320 ITR 561 (SC). 9. Having regard to the contents of the notice for AY 2003-04, the court is unable to agree with the findings of the ITAT. It constitutes reference to tangible material "outside" the record, i.e. information based upon the investigation of the Commissioner of Central Excise with respect to the purchases made by the assesses. However, as far as the second issue is concerned, the Court is of the opinion that even the rectified order does not address the issues squarely. Thus, arguendo such arguments could be validly raised. At the same time, ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
