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TMI Blog2021 (11) TMI 496X X X X Extracts X X X X X X X X Extracts X X X X ..... as AO had no evidence of not finding ITR in his computer system. 1.3. On the facts and in the circumstances of the case, the Ld. CIT(A) erred in law and on facts in not appreciating that assessment order was void, invalid, non est as Delhi HC order in Sonia Gandhi vs ACIT DATED 10.09.2018 was not applicable in present case as Assessing Officer had no germane material to the issue and hence he was required to do further investigation upon receipt of survey report. 2. Challenge to non dispatch of s.143(2) notice. Tax Effect -Rs. 6579,313/-. 2.1. On the facts and in the circumstances of the case, the Ld. CIT(A) erred in law and on facts in not appreciating that assessment order was void, invalid, non est as the s.143(2) notice was never dispatched by Assessing Officer. 2.2. On the facts and in the circumstances of the case, the Ld. CIT(A) erred in law and on facts in not appreciating that relevant mater was whether speed post receipt dated 25.07.2013 was forged or not and not forensic examination. 3. Challenge to disposal of objection to issuance of s.148 notice by non speaking order.-Tax Effect- Rs/65,79,313/- 3.1. On the facts and in the circumstances of the case, the L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed with assessment without waiting for 30 days after passing order of rejection to objections made by assessee for s.148 issuance. 7. Challenge to assessment order framed on reasons other than those on which belief for escapement of income was formed. -Tax Effect- Rs. 65,79,313/- 7.1.On the facts and in the circumstances of the case, the Ld. CIT(A) erred in law and on facts in not appreciating that assessment order has not been framed on reasons forming belief of income escapement. 8. Challenge to no addition made on reasons on which belief for escapement of income was formed. -Tax Effect- Rs. 65,79,313/- 8.1. On the facts and in the circumstances of the case, the Ld. CIT(A) erred in law and on facts in not appreciating that no addition has been made on reasons forming belief of income escapement. 9. Challenge to year of taxation.-Tax Effect- Rs. 65,79,313/-. 9.1. On the facts and in the circumstances of the case, the Ld. CIT(A) erred in law and on facts in not appreciating that once assessee is entitled to file return under presumptive taxation i.e. s.44AD books of account are not required to be maintained or provided to Assessing Officer for claiming income on mercant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is found that assessee has total receipt of Rs. 1,76,11,272/- during the year. Further, it is stated in the survey report that during the survey proceedings u/s 133A, it was found that Shri Madan Mohan Tiwary and his family members are maintaining 61 bank account in various banks and were having 39 debit cards. Therefore on the basis of the facts narrated above, I have reasons to believe that the income of the assessee amounting to Rs. 1,76,11,272/- has escaped assessment in the hands of the assessee for which the assessment of the assessee needs to be reopened Under Section 147/148 of the I.T. Act, 1961. Sd/- (M.L. Gupta) Income Tax Officer, Ward 22(1),New Delhi 4. A perusal of the above reasons recorded would show that the Assessing Officer had got information through Investigation Wing that the assessee has received Rs. 1.60 crore from M/s M. M. Engineering Services. Further, the Assessing Officer after going through the AST System noted that the assessee had not filed return of the income for the Assessment Year under consideration i.e. AY 2008-09. Further, from the examining of the Form No.26AS , the Assessing Officer noticed that the total receipts of the assessee du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dan Mohan Tiwary and his family members are maintaining 61 bank accounts in various banks and were having 39 debit cards. Therefore, on the basis of the facts narrated above, I have reason to believe that the income of the assessee amounting to Rs. 1,76,11,272/- has escaped assessment in the hands of the assessee for which the assessment of the assessee needs to be reopened under section 147/148 of the I.T. Act, 1961." (5) In this connection, the Assessee hereby records its preliminary objections to the issue of notice u/s 148 and resort to the reassessment provisions incorporated u/s 147/148 of the Income-tax Act,. 1961 as follows;- (i) Before proceeding further it would be pertinent to reproduce the provisions relating to reassessment of escaped income as incorporated in S 147 of the Income-tax Act, 1961 the relevant parts of which read as follows.- : Income escaping assessment 147. If the Assessing' Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of Sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e chargeable to tax has been under assessed; or * income chargeable to tax has been assessed at too low a rate; or * income chargeable to tax has been made the subject of excessive relief under the Income-tax Act, 1961 or * excessive loss or depreciation allowance or any other allowance has been computed under the Act. (iv) Thus S. 147 of the Income-tax Act, 1961 authorises and permits ah Assessing Officer to (re)assess income chargeable to tax if he has reason to believe that the said income for any assessment year has escaped assessment. The expression "escaped assessment" clearly connotes a very basic postulate that the income for a particular assessment year went unnoticed by the Assessing Officer and because if not being noticed by him for any reason, it escaped assessment. Accordingly there should be a complete and direct conclusion as to income escaping assessment so as to resort to the reassessment provisions. (v) Section 148 to 151 set out the frame work, procedure and the conditions -governing the reassessment provisions incorporated in section 147. The said sections successively deal with:- (a) Form of notice and recording of reasons for issue (S. 148); (b) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... question of limitation but the very foundation of his jurisdiction. These words import the presence of the following four essential ingredients. i. some material or materials and not mere fancy, imagination, speculation, suspicion; ii. a nexus between such material and the belief of escapement of income from assessment; iii. an application of mind by the Assessing Officer to such material; and iv. an inference based on reason drawn tentatively by the officer that income has escaped assessment. (ix) The entire gamut of the scope and extent of the reassessment provisions also engaged the attention of the Hdn'ble Supreme Court in the base of M/s Plarashuram Pottery Works Co Ltd v ITO f(1977) 106 ITR 1 (SC)] wherein the following remarks were made "It has been said that the taxes are the price that we pay for civilization. If so, it is essential that those who are entrusted with the task of calculating and realizing that price should familiarize themselves with the relevant provisions and become well-versed with the law on the subject. Any remissness on their part can only be at the cost of the national exchequer and must necessarily result in loss of revenue. At the same t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd not dealt with further at this stage itself, (xii) The above view is also reinforced with reference to the following judicial decisions:- * Reason to belief a salutary safeguard "Reason to believe" is a common feature in taxing statutes, it has been considered to be the most salutary safeguard on the exercise of power by the officer concerned. It is made of two words "reason" and "to believe". The word "reason" means cause or justification and the word "believe" means to accept as true or to have faith in it. Before the officer has faith or accepts a fact to exist there must be a justification for it. The belief may not be open to scrutiny as it is the final conclusion arrived at by the officer concerned, as a result of mental exercise made by him on the information received. But, the reason due to which the decision is reached can always be examined. When it is said that reason to believe is not open to scrutiny what is meant is that the satisfaction arrived at by the officer concerned is immune from challenge .but -where the satisfaction is not based on any material or it cannot withstand the test of reason, which is an integral part of it, then it falls through and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... existence of reasons ind...... belief. Calcutta Discount Go. Ltd. v. AO - [(1961) 41 ITR 191 (SC)] : Bhadarmal Hazarimal v. 1.T.0 - [(1975) 100 ITR 159 (Gau)] In view of the above, it is clear that there is no ground to conclude that income has escaped assessment in the case of the Assessee and, accordingly, it is prayed that the notice in question may kindly be filed. Thanking you, Yours faithfully, MADAN MOHAN TIWARI 5. A perusal of the aforesaid objections would show that the assessee inter-alia had brought to the knowledge of the Assessing Officer that the assessee had duly filed the return of income for the year under consideration. Further, the assessee had duly pleaded that the aforesaid amount of Rs. 1,76,11,272/- was not income of the assessee rather the same was contractual receipts and that the assessee had returned the income in his return of income. However, the Assessing Officer dismissed the objections of the assessee by observing as under:- Office of the Inconre Tax Officer, Ward-22(1) Room No. 1015, E-2 Block, Pratyaksh Kar Bhawan Civic Centre, J.L. Nehru Marg, New Delhi. ****** F.No. ITO/W-22fl)/Scrutiny/2012-13/1048 &nbs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is submitted that there is no tangible evidence to lead to the conclusion that the Assessee's income has "escaped assessment" so as to call for reassessment proceedings. In this connection, it is submitted that the notice u/s 142(1) of the Income tax Act, 1961 was issued on 13.09.2010 to the Assessee in response to which a return of income along with computation of income, balance sheet and income and expenditure account was duly filed on 12.10.2010. As such there is no tangible evidence of escapement of income to warrant a revisit of the assessment and resorting to assessment proceedings u/s 147/148 of the Income Tax Act, 1961 and accordingly the basis of recording of "reason to believe" as to escapement of income does not exist in the instant case. 3.3. In the light of these facts, it is clear that issue of notice u/s 148 is only based on a change of opinion and the reasons to believe for the conclusion as to escapement of income are only conjectural and not tangible and concrete which are the touchstones against which any such action has to be judged. Accordingly, it is humbly submitted that the action of issues of notice u/s 148 is void, ab-initio and deserves to be filed a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d/Survey Report/2012-13 dated 24.04.2012. 5.1 In this case, the assessee has filed his return of income in response to notice issued u/s 142(1) in respect of A.Y. 2008-09 declaring total income of Rs. 2,80,070/-. 5.2 As per the information provided by the Addl. Commissioner of Income Tax, Range-1' Hyderabad, that M/s Air Liquide Engineering India Pvt Ltd paid Rs. 1.60 crores in FY 2007-08, Rs. 40 lakhs in FY 08-09 and Rs. 32,23,100/- in FY 09-10 to M/s M.M. Engineering India Pvt Ltd (Proprietary concern of Sri M.M. Tiwari, J-145, Kalkaji, Delhi) as representation and consultancy fees. M/s Air Liquide Engineering India Pvt Ltd filed an application before the Hon'ble Settlement Commission, Chennai Bench and the Hon'ble Commission permit enquiry in connection with the transactions with M/s M.M. Engineering Enterprises. As part of the enquiry, Sri M.M. Tiwari was summoned u/s 131 5.3 by the undersigned to produce books of accounts etc. and give evidence. However, Sri M.M. Tiwari did not bother to appear in response to the summons nor did he file any evidence. To understand the correct facts, Investigation Wing, Delhi was requested to conduct a survey. 5.4 A survey u/s 133A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Where the Court held that if no conscious consideration of the material available on record is made and a mistake has been committed, it will not prevent the competent officer to exercise the power u/s 147 - application of mind or not. 7. Initiation of the proceedings u/s 148 of the Act, is wholly legal as all the statutory conditions laid down for reopening of assessment were complied with as follows: a) There was information in the possession of the AO to form reason to believe that income has escaped assessment. b) Reason were duly recorded vide order sheet entry dated 05.02.2013 c) Approval of Addl. Commissioner of Income Tax was obtained. d) Notice u/s 148 dated 05.02.2013 was issued and served. As well as the assessment was reopened on valid reasons after due application of mind as before reopening of assessment all the relevant material pertaining to the relevant assessment year was gone through. 8. As far making available the details and result of enquires conducted by the Investigation wing is concerned, the same has already been briefed and contained in the reasons recorded and provided to the assessee. At this stage, the full disclosure of details and resu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has further submitted that it has been noted by the Ld. CIT(A) that the behavior of the assessee during the survey proceedings was not cooperative due to which the Assessing Officer could not get the correct information about the filing of the return. 8. We have considered the rival submission and have also gone through the record. We find that the Assessing Officer had formed the belief that the income of the assessee had escaped assessment on the basis of information that the assessee had total receipt of about Rs. 1.76 crores as per Form No.26AS and further that the assessee had not filed the return of income for the year under consideration. However, on the receipt of notice u/s 148 of the Act, the assessee filed objections against the reopening of the assessment stating therein that the information on the basis of which the Assessing Officer had form belief of escapement of income was, in fact, a wrong information. In fact, the assessee had duly filed his return of income and further all the receipts could not be construed as the income of the assessee. In our view, as per the above factual position, when it has been brought to the knowledge of the Assessing Officer that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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