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TMI Blog2023 (2) TMI 499X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Learned Commissioner of Income Tax (Appeals) 20, Kolkata (hereinafter the ld. CIT(A) ) dt. 10/01/2022, passed u/s 250 of the Income Tax Act, 1961 ( the Act ), for Assessment Year 2008-09. 2. This assessee s appeal is time barred by 26 days. Petition for condonation of delay has been filed. We have heard both the sides and find that there is reasonable cause for delay in filing of the appeal on time. Hence we condone the delay and admit the appeal for hearing. 3. The assessee has challenged the order of the ld. CIT(A) on the ground that the ld. CIT(A) has confirmed the reopening u/s 147 of the Act. 4. The facts in brief are that the assessee filed its return of income on 29/09/2008 declaring total income of Rs.73,978/-. The case of the assessee was selected for scrutiny and assessment was accordingly framed u/s 143(3) vide order dt. 31/12/2010 on total income of Rs.78,980/-. Thereafter, the case of the assessee was reopened u/s 147 of the Act by issuing notice u/s 148 of the Act on 24/02/2015 which was duly served upon the assessee. The Assessing Officer recorded reasons u/s 148 of the Act for reopening the assessment copy of which is filed at page no. 12 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R 84] Peerless Hospitex Hospital and Research Centre vs. PCIT [137 Taxmann.com 359] Titanor Components Ltd. vs. ACIT [343 ITR 183] 6. Om the second plea , the ld. A/R contended that the objections filed by the assessee in respect of the assessment u/s 147 of the Act were not disposed off by the Assessing Officer before passing the assessment order but the same were disposed off in the assessment order itself which is bad in law and against the various judicial precedents by various judicial forums. The ld. A/R submitted that when the assessee has challenged the reopening by way of filing objections before the Assessing Officer, the Assessing Officer is under obligation to dispose off those objections first by passing a speaking order dealing therein each and every ground raised by the assessee failing which the order passed by the Assessing Officer is rendered null, void and bad in eyes in law. For this proposition, the ld. A/R relied on the following decisions: Fomento Resorts Hotels Ltd. vs. ACIT [ITA No.63 of 2007] dated 30/08/2019 Hardware Trading Corporation vs. ACIT [ITA No. 1993/Kol/2014] dated 03/11/2017 7. Lastly, the ld. A/R argued that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r sheet entries , there was any mention of issuance of notice nor any physical copy was found of the said notice in the file which was issued u/s 143(2) of the Act. 9. After hearing both the parties and perusing the material available on record, I note that in this case, the original assessment was framed u/s 143(3) of the Act vide order dt. 31/12/2010. The instant assessment year under consideration is Assessment Year 2008-09 and apparently, the case was reopened on 24.02.2015. The case can be reopened after expiry of four years from the end of the relevant Assessment Year only subject to the satisfaction of the condition as envisaged under first proviso u/s 147 of the Act which stipulates that the reopening can only be made if there is a failure on the part of the assessee to disclose all material facts in the return of income or during the original assessment proceedings u/s 143(3) of the Act which has led to escapement of income. We have perused the reasons recorded u/s 148(2) of the Act and find that nowhere the Assessing Officer has stated that there is failure on the part of the assessee to disclose any material fact. The reasons recorded are extracted for the sake of rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts, few of which are discussed as under:- a) in the case of Ceebuild Company Pvt. Ltd. vs. DCIT (supra) the coordinate bench has held as under: From a plain reading of Section 147 and First proviso it is manifest that the AO can reopen the assessment provided he had reasons to believe escapement of income. Reasons to believe postulates a foundation based on information and belief based on reason. After a foundation based on information is made there still must be some reason which should warrant the holding of a belief that income chargeable to tax as escaped assessment. Information adverse may trigger reason to suspect and not reasons to believe . When there is reason to suspect then AO to make a reasonable enquiry and collect material which would make him belief, that there is in fact an escapement of income. It is settled by the Hon ble Supreme Court in Ganga Saran and Sons P. Ltd. v. ITO, [1981] 130 ITR 1 (SC) that the expression reason to believe the expression in section 147 is stronger then the expression is satisfied . Therefore the AO has to record his reason to believe escapement of income and if he intends to reopen an assessment which has been fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant assessment year, when the impugned notices were issued, two requirements were to be satisfied, i.e., escapement of some income chargeable to tax and failure on the part of the assessee to disclose fully and truly all material facts necessary for its assessment. 7. But, in the present case, the reasons disclosed with the affidavit-in-oppo-sition admittedly only show escapement of assessment and that too according to the explanation of the law by the apex court subsequent to the assessment. There is no material that the second requirement of failure on the part of the petitioner to disclose fully and truly any material fact, has even been alleged. Learned counsel for the respondents relied on the law as decided by the apex court in the case of Raymond Woollen Mills Ltd. v. ITO [1999] 236 ITR 34 for showing that this court, at this stage of issuance of notice, is not to assess the correctness or sufficiency of materials. But this contention cannot be accepted as at this stage not the correctness or sufficiency of the materials but the very existence of the allegation is being considered and that is within the power of the court when the notice is challenged. 8. In resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly any material fact necessary for assessment before the assessing officer in course of regular assessment proceeding. I am of the considered opinion that in the facts and circumstances of the case initiation of the impugned proceeding under section147 of the Income-tax Act, 1961, is bad and not sustainable in law and is liable to be quashed for the following reasons: (i) It is admitted position as substantiated by record that the impugned notices under section 148 of the Act were issued after the expiry of four years from the end of the relevant assessment years. (ii) Nowhere the assessing officer has recorded either in the impugned notices under section 148 of the Act or in the recorded reason for reopening of assessment in question that in course of regular assessment there was any omission or failure on the part of the assessee/petitioner in disclosing fully and truly all material facts necessary for its assessment relating to the relevant assessment years or that any new material/information other than those which were already available at the time of regular assessment has come to his knowledge. In view of these admitted factual position I am of the considered opi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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