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TMI Blog2024 (3) TMI 954X X X X Extracts X X X X X X X X Extracts X X X X ..... has deposited the donations received in cash in its bank account and thereby disclosed Nil total income for the relevant AY. Moreover, the accounts of Petitioner are recorded, accounted and audited and hence, undoubtedly, there is no undisclosed cash over and above the deposits in its regular bank accounts which were offered for taxation. Thus, there is no material or fact which has been stated in the reasons for reopening assessment in the present case on which any belief can be founded of the nature contemplated by law. Thus upon perusal of the letter providing the reasons to believe escapement of assessment as well as the order rejecting Petitioner s objections impugned herein, we have no hesitation in holding that there is no live link, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 25th March 2021 from the Department under Section 148 of the Act conveying that the Assessing Officer ( AO ) had reasons to believe that Petitioner s income chargeable to tax for AY 2014-15 had escaped assessment. Petitioner complied and filed its ROI on 30th May 2021. 5. The Department issued the notice dated 23rd June 2021 under Section 143(2) read with Section 147 of the Act seeking reply in relation to the merits of the assessment proceedings. Petitioner requested the AO by its letter dated 16th July 2021 to provide reasons for reopening of the assessment and also sought a copy of the sanction order given by the Appropriate Authority under Section 151 of the Act. Petitioner received the reasons to believe escapement of income by letter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er dated 22nd February 2022 raising several grounds to suggest that the reopening of the assessment was untenable. The Department, however, proceeded to pass the impugned order dated 3rd March 2022 rejecting the objections of Petitioner. It is this order and the notice dated 25th March 2021, which are challenged in the present Petition. 6. Mr. Naniwadekar, learned counsel appearing for Petitioner, submitted that there was nothing to indicate satisfaction of the AO that income had escaped assessment since there was no enquiry/verification of information purported to have been provided by the Income Tax Officer (Investigation) Unit II. He further submitted that issuance of notice under Section 147 of the Act is not for the purpose of indulgin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... previous year. Since the receipts/income disclosed was not sufficient to carry out the expenses and the ROI did not show anything about the difference of Rs. 2,76,46,804/-. Hence, the AO formed belief sufficient to reopen assessment. Thereupon requisite sanction was obtained and the notice was issued. 9. Paragraph 4.12 of the affidavit in reply of the Department reads as thus: 4.12. .Similarly, from the return of income filed, it was not possible for the JAO to ascertain whether the cash deposits of Rs. 2,76,49,804/- as flagged by DIT(Systems) were disclosed in the return filed or not. I submit that for the purpose of issue of notice u/s. 148 of the Act, what is required is sufficient reason to form a belief that there is escapement of inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oming to the notice of the AO and the formation of belief regarding escapement of income. The Apex Court in the matter Sheo Nath Singh v. AACIT (1971) 82 ITR 147 (SC) has held as under: .There can be no manner of doubt that the words reasons to believe suggests that the belief must be that of an honest and reasonable person based upon reasonable grounds that the Income Tax Officer may act on direct or circumstantial evidence but not on mere suspicion, gossip or rumour. The Income Tax Officer would be acting without jurisdiction if the reason for his belief that the conditions are satisfied does not exist or is not material or relevant to the belief required by the section. The Court can always examine this aspect though the declaration or s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of his failure to disclose fully and truly all material facts. It is not doubt true that the court cannot go into the sufficiency or adequacy of the material and substitute its own opinion for that of the Income-tax Officer on the point as to whether action should be initiated for reopening assessment. At the same time we have to bear in mind that it is not any and every material, howsoever vague and indefinite or distant, remote and far-fetched, which would warrant the formation of the belief relating to escapement of the income of the assessee from assessment .... 14. Thus, upon perusal of the letter providing the reasons to believe escapement of assessment as well as the order rejecting Petitioner s objections impugned herein, we have no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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