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TMI Blog2024 (6) TMI 416X X X X Extracts X X X X X X X X Extracts X X X X ..... ahma Tradelinks Pvt. Ltd., contrary to that the statement filed by the assessee goes to establish that an amount of Rs. 20 Lakh was received. So, we are of this opinion that information as alleged to be received by the AO cannot be said to be a credible information. Moreover, we further find that in the preceding A/Y 2012-2013, reopening proceeding was initiated by the then Ld. AO against the assessee on the same issue, i.e the transaction of the assessee with the same entity, viz. M/s Brahma Tradelink Pvt. Ltd. and after being satisfied with the identity of the entity and the genuineness of the transaction, no addition was made. A/O did not apply his own mind to the information and examine the basis and material of the information. He(AO) accepted the plea in a mechanical manner. It is settled law that mere reliance on the information received, without having acted there on before recording the reason, showing non application of mind on the part of the A/O., is unsustainable in law. Assessee appeal allowed. - Sri Rajesh Kumar, Accountant Member And Pradip Kumar Choubey, Judicial Member For the Assessee : S.K. Tulsiyan, Adv. Mita Rizvi. For the Department : P.P. Barman, Addl. CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Thus, I have reason to believe that in this case Income has escaped to the tune of Rs. 35,00,000/- and consequent to the above facts, your kind approval for issuing notice u/s 148 of the IT Act, 1961 for AY 2013-14 may be given to initiate proceeding u/s 147 of the IT Act, 1961. 2.4. In response to the notice issued u/s 148 of the Act the assessee filed return of income under protest filed its objection challenging the re-opening of the proceeding alleging the escapement of income to the tune of Rs. 35 Lakh. The AO disposed of the objection without assigning any reason thereby holding that the assessee escaped the income to the tune of Rs. 35 Lakh and therefore, the total income of the assessee enhanced by Rs. 35 Lakh accordingly. On appeal before ld. CIT(A) again raved the grounds challenging the order of the AO but ld. CIT(A) confirmed the impugned addition of Rs. 35 Lakh upholding the order of the AO. 3. Being aggrieved by the order of ld. CIT(A) the assessee is in appeal before this Tribunal. ld. Counsel for the assessee challenges the impugned order on several grounds and also took an additional ground which is as follows: That, the impugned order passed u/s. 147 of the Act m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... parties the points for determination in this appeal which according to us is essential to decide the issue, (i) Whether the notice issued u/s 148 of the Act is illegal, wrong and liable to be quashed. 6. In the present case the order of ld. AO reveals that he received an information and there was a reason to believe that income chargeable to tax has escaped assessment within the meaning of u/s 147 of the Act. Therefore, notice u/s 148 of the Act issued on 19.03.2020 after recording reasons and taking prior approval of ld. Pr. CIT-4, Kolkata. First of all, we have gone through the Explanation 3 to Section 147 of the Act which was inserted by the Finance [No. 2] Act, 2009 w.e.f. 01.04.1989, reads as under: For the purpose of assessment or reassessment under this section, the Assessing Officer may assess or reassess the income in respect of any issue, which has escaped assessment, and such issue comes to his notice subsequently in the course of the proceedings under this section, notwithstanding that the reasons for such issue have not been included in the reasons recorded under sub-section (2) of section 148. 6.1. In the present case, evidently the assessee received a sum of Rs. 20 L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax and Others reported in [2005] 273 ITR 16 (Cal) held the following: The law is now well settled by the Hon'ble apex court, as discussed above, that the reason for the formation of the belief must have a rational connection with or relevant bearing with the information received. Rational connection postulates that there must be a direct nexus or live link between the material coming to the notice of the Income-tax Officer and the formation of the belief that there has been escapement of the income of the assessee from assessment in the particular year because of his failure to disclose fully and truly all material facts. It is to be borne 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. The reason for the formation of the belief must be held in good faith and should not be a mere pretence. The powers of the Income-tax Officer to reopen assessment, though wide, are not plenary. The words used in the statute are reason to believe'' and not reason to suspect . But from our discussion above, w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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