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TMI Blog2019 (11) TMI 211X X X X Extracts X X X X X X X X Extracts X X X X ..... g the facts for assessment year 2005-06 in ITA No.302/PUN/2019. 3. The relevant facts as culled out from the material on record are as under :- Assessee is an individual stated to be having income from business. Assessee filed his return of income for A.Y 2005-06 on 27.10.2006 declaring total income of Rs. 9,13,090/-. The return of income was initially processed u/s 143(1) of the Act. Thereafter, the case was reopened by issuing notice u/s 148 of the Act dated 19.03.2012 which was served on the assessee on 21.03.2012. In response to notice u/s 148 of the Act, the assessee vide letter dated 19.04.2012 submitted that the return of income filed by him on 27.10.2005 be treated as return of income in response to notice u/s 148 of the Act. The case was thereafter taken up for scrutiny and consequently the assessment was framed u/s 143(3) r.w.s 147 of the Act vide order dated 19.03.2013 and the total income was determined at Rs. 15,13,090/-. Aggrieved by the order of AO, assessee carried the matter before Ld.CIT(A), who vide consolidated order for A.Ys. 2005-06 to 2007-08 dated 27.11.2018 (in appeal No. SLI/219/13-14) granted partial relief to the assessee. Aggrieved by the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted that from the reasons recorded it appears that the AO merely on the basis of suspicion and for further verification of the transaction has resorted to the reopening. He submitted that various High Courts have held that for making roving/fishing inquiry or for the purpose of investigation and without there being a specific finding of the escapement of income, reopening of assessment is not permissible. He therefore submitted that in the present cases, there is no reasonable belief by the AO of the income escaping assessment before issuing notice u/s 148 of the Act and therefore the reopening should be held to be invalid. He further submitted that the loans given by the assessee to Shri Gajanan Koli are reflected in the Balance sheet of the assessee which was filed by the assessee along with the original return of income and in support of which he pointed to the copy of the Balance Sheet placed in the Paper Book. He thereafter submitted that there is no evidence of escapement of income and that for mere verification, reassessment proceedings cannot be initiated. He therefore submitted that the reassessment be held to be invalid. He thereafter submitted that for identical reaso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent only in accordance with the express provisions provided in Section 147/148 of the Act. It is only on the Assessing Officer strictly satisfying the provisions of Section 147 of the Act that he acquires jurisdiction to re-open an assessment. Section 147 of the Act, clothes the Assessing Officer with jurisdiction to reopen an assessment on satisfaction of the following: (a) The Assessing Officer must have reason to believe that (b) Income chargeable to tax has escaped the assessment and (c) In cases where the assessment sought to be reopened is beyond the period of four years from the end of the relevant assessment year, then an additional condition is to be satisfied viz: there must be failure on the part of the Assessee to fully and truly disclose all material facts necessary for assessment. The requirement in the first proviso to Section 147 of there having to be a failure on the part of the Assessee "to disclose fully and truly all material facts" does not at all apply where the initial return has been processed under Section 143(1) of the Act. 8. In the present case it is required to be noted that by the impugned notice, the assessment for AY 2005-06 is sought to be reopene ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, as per the reasons noted hereinabove the reasons recorded by the AO is on the basis of verification of the return of income filed by the Assessee alongwith with the enclosures. According to the AO it shows that assessee has given loan to Shri Gajanan Koli for investment in Adasrsh CHS, the genuineness of the source of investments is not proved and thus he has reason to believe that income chargeable to the extent of loan given has escaped assessment. 9. So far as the proposition of the Ld DR to the effect that when a return of income is processed u/s 143(1) of the Act, the Revenue has greated latitude in reopening an assessment is concerned, I fully agree only to that extent with the aforesaid proposition but at the same time various high courts have held that, even in such cases, where return of income is processed u/s 143(1) of the Act, the reopening of an assessment can only be done if there is reason to believe that income chargeable to tax has escaped assessment. Here it would be relevant to refer to the observations of Hon'ble Delhi High Court in the case of CIT Vs. Orient Craft Ltd reported in [2013] 29 taxmann.com 392 (Delhi) wherein the Hon'ble High Court has observed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, the Tribunal vide order dated 11.09.2019 (ITA No769/PUN/2014) held that the AO was not justified in taking recourse to the provisions of Sec. 147 of the Act and it stuck down the initiation of assessment proceedings and the consequential assessment order passed u/s 147 of the Act. 13. Considering the totality of the aforesaid facts, I am of the view that AO in the present case was not justified in taking recourse to the provisions of s. 147 of the Act and therefore the initiation of reassessment proceedings are not in accordance with law. I therefore set aside the initiation of reassessment proceedings and the consequential assessment order. Thus, the grounds of the assessee in ITA No.302/PUN/2019 for A.Y. 2005-06 is allowed. 14. As far as the issue involved in ITA Nos.303 and 304/PUN/2019 for A.Ys. 2006-07 and 2007-08 are concerned, before me since both the parties have submitted that the issue in all the three years are identical except for the assessment years and the amounts involved and in view of the aforesaid submission of both the parties and for the reasons stated herein while deciding the issue for A.Y 2005-06 in ITA No.302/PUN/2019 and for similar reason I set aside ..... X X X X Extracts X X X X X X X X Extracts X X X X
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