9911796707
TMI Blog2016 (12) TMI 1710X X X X Extracts X X X X X X X X Extracts X X X X ..... h is without jurisdiction, illegal and bad in law since the prerequisite conditions for initiating proceedings under section 147 of the Act were not fulfilled in the present case. 2. That the CIT (Appeals) erred on facts and in law in upholding the alleged fair rental value at ₹ 1 1,77,528/- and thereby making an addition of ₹ 8,24,270/-under the head income from house property." 3. Vide Ground No. 1, the grievance of the assessee relates to the validity of the jurisdiction for reopening the assessment u/s 147 of the Income Tax Act, 1961 (hereinafter referred to as the Act). 4. Facts of the case in brief are that the assessee filed original return of income on 30.03.2006. Thereafter, the AO issued notice u/s 148 of the Act on 29.03.2012, the reason for reopening the case was that a search and seizure operation was carried out at various premises of M/s Today Homes and Infrastructure Pvt. Ltd. and its group concerns/associated persons. The assessee is one of the associated/group companies of Today group. During the course of assessment proceedings for the assessment year 2009-10, it was noticed that the assessee was one of the co-owner of the property at 48, Friends C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. "the assessee has shown its income from house properly at Rs NIL in its return of income for AY 2000-06. In view of above, I have reasons to believe that amount of ₹ 1177528/- has escaped assessment-------." We hereby state that AO has only some information in his possession and he even never tried to inspect the information received. No facts had been examined and no new facts brought on records to show that information received is correct and needs to proceed further. The AO has thus acted only on the basis of mere suspicion and it could not be said that it was based on belief that the income chargeable to tax had escaped assessment. The AO has to act on the basis of reason to believe and not on reason to suspect. Ld. AO in fact failed to appreciate the facts of the case and even failed to look into the ITR before him, therefore the issuance of notice U/s 148 for reassessment proceedings was not valid. Since the reasons on which Ld. AO has formed his belief is totally wrong and void-ab-initio, therefore the notice U/s 148 is not valid in law and needs to be quashed. We rely on following judgements; - MOHINDER SINGH MALIK 267 ITR 716 (P&H). MADHUKAR KHOSLA VS. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 148. It has been mentioned in the Asst. Order that approval has been taken form Addl. CIT Central Range - 6. New Delhi. Now, as per our understanding the Addl. CIT of the concerned AO is not Addl. CIT Central Range - 6 and thus, the Ld. AO may be directed to clarify in this matter and if it is opined that Addl. CIT Central Range - 6 is not the jurisdictional Addl. CIT than the impugned proceedings .should be taken as without jurisdiction and void-ab-initio. In view of the above facts and various judicial pronouncements we humble prayed to kindly quash the notice U/S 148." 6. The ld. CIT(A) after considering the submissions of the assessee observed that there was no illegality in using the evidence collected during the search of third persons for making assessment u/s 147 of the Act and that the assessee had not spelt out any illegality in assuming the jurisdiction u/s 147 of the Act. The ld. CIT(A) held that the jurisdiction u/s 147 of the Act had been assumed after recording the reason and taking approval as required under the provision of the Act for assumption of jurisdiction u/s 147 of the Act. 7. Being aggrieved the assessee is in appeal. The ld. Counsel for the assessee su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ead as under: "1. The assessee filed its return of income for the AY 2005-06 at an income of ₹ 10,70,031/- on 30/03/2006, The income of ₹ 10,70,031/- has been shown under the head 'income from other sources'. The brief facts are that a search and seizure operation was carried out at the various premises of M/s Today Homes and Infrastructure Pvt. Ltd. and its group concerns and associated persons (hereinafter called 'Today- group') on 26/11/2009 and was finally concluded on 25/01/2010. The assessee company M/s Palos Verdes Estate Pvt. Ltd., is one of the associated group companies of Today-group. During the course of assessment proceedings for the AY 2009-10, it was seen that the assessee is one of the co-owner of the property at 48 Friends Colony East, New Delhi along with other group concerns namely M/s Takshila Distributors Pvt. Ltd.; M/s Mission Viejo Agro Pvt. Ltd. and M/s Rancho Place Estate Pvt. Ltd. The assessee owns 28.24% of the share in the property at 48 Friends Colony East. New Delhi and this property of the assessee company at 48, Friends Colony East, New Delhi. Further it was noticed that this property was being used by Gambhirs for their ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s business from the property in question. The assessee disclosed the rental income for the let out portion at ₹ 1,80,000/- which has also been accepted. It, therefore, appears that the AO issued the notice u/s 148 of the Act only on the basis of presumption and nothing was there in his possession while recording the reasons for reopening the assessment that the property at 48, Friends Colony East, New Delhi was not let out at ₹ 1,80,000/-. The AO himself had mentioned that the sum for which the whole of property at 48, Friends Colony East, New Delhi might reasonably be accepted to be let out was at ₹ 41,69,718/-. Therefore, the AO himself was not sure about the presumptive let out value. In the present case, noting has been brought on record that the assessee had received the rent of ₹ 11,77,528/- as worked out by the AO and not ₹ 1,80,000/- which was offered for taxation. Therefore, by considering the totality of the facts as discussed hereinabove, I am of the view that the AO reopened the assessment only on the basis of the presumption which is not tenable in the eyes of law. Accordingly, the reopening u/s 147 of the Act and reassessment framed there ..... X X X X Extracts X X X X X X X X Extracts X X X X
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