9911796707
TMI Blog2025 (1) TMI 182X X X X Extracts X X X X X X X X Extracts X X X X ..... andatory conditions as 147 to 151A as envisaged under the Income Tax Act, 1961. 2. That in any case and in any view of the matter, action of Ld. CIT(A) in not quashing the impugned reassessment order passed by Ld. AO u/s 147/144B which is illegal, bad in law and against the facts and circumstances of the case and the same is not sustainable on various legal and factual grounds. 3. That having regard to the facts and circumstances of the case. Ld CIT(A) has erred in law and on facts in confirming the action of Ld. AO in making aggregate addition of Rs. 3,80,00,000/- on account of unsecured loan by treating it as alleged unexplained credits u/s 68 and that too by recording incorrect facts and findings and without considering the submissions filed by the assessee and without following the principles of natural justice and without providing the entire adverse material on record and without providing the opportunity of cross examination. 4. That in any ease and in any view of the matter, action of Ld. CIT(A) in confirming the action of Ld. AO in making aggregate addition of Rs. 3,80,00,000/- on account of unsecured loan by treating it as alleged unexplained credits u/s 68, is bad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t assessee has failed to provide source of funds to purchase certain land parcels. The AO accordingly invoked the provision of section 69 of the Act alleging unexplained investment in purchase of three land parcels aggregating to INR 1,50,00,000/-. 6. Aggrieved, the assessee preferred appeal before the Ld.CIT(A). The Ld.CIT(A) however declined to provide any relief. 7. Further aggrieved, the assessee preferred appeal before the Tribunal. 8. When the matter was called for hearing, the Ld. Counsel for the assessee at the outset, referred to the reasons recorded and challenged the validity of assumption of jurisdiction under s. 147 of the Act. 8.1. The Ld. Counsel for the assessee submitted that the AO has wrongly usurped jurisdiction under s. 147 of the Act contrary to the mandate of law for more than one reasons: (i) the reasons recorded do not meet the requirement of law inasmuch as the reasons recorded would show that the AO has proceeded under s. 147 of the Act on the last day of limitation merely on the ground that the assessee has entered into significant financial transactions amounting to INR 50,00,000/-. It was also alleged in the purported reasons that the assessee ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not a valid foundation for initiating re-opening proceedings, the Ld. Counsel for the assessee relied upon the judgement of Hon'ble High Court of Delhi in the case of CIT, IV vs Insecticides (India) Ltd. [2013] 38 taxmann.com 403 (Delhi) & Divine Infracon Pvt.Ltd. vs DCIT [TS-661-HC-2024(Del.)] among other plethora of judgements. 8.2. On merits, the Ld. Counsel for the assessee referred to the tabular statements of the lenders as reproduced in first appellate order and submitted that the relevant evidences such as bank statement, return of income of the lenders etc. were provided to the lower authorities. All the lenders are income tax assessees and the transactions have been carried out through banking channel. The evidences filed are speaking for itself and no worthwhile enquiries were carried out by AO in such evidences. The Ld. Counsel for the assessee referred to the judgement of Hon'ble Supreme Court in the case of PCIT vs DLF Commercial Project (2019) 260 taxmann 1 (SC) to contend that the onus which lay upon the assessee was discharged by furnishing the relevant documentary evidences. 8.3. The Ld. Counsel for the assessee also assailed the additions under s. 69 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his case as per the information received in category of High-Risk Transaction CRIU/VRU Information on Insight Portal of the department. As per the information uploaded by the ITO (I&CI), Jodhpur it is noticed that the assessee has entered into significant financial transactions as mentioned hereunder in Para 5. 3. Analysis of information collected / received On perusal and analysis of information available on record, it is noticed that the assessee has entered into financial transactions exceeding the taxable limits. The assessee has undertaken transactions as per the details given in the following chart, however, despite making these financial transactions the assessee has not truly and correctly disclosed the quantum of transactions done during the year under consideration. 4. Enquiries made by the AO as sequel to information collected / received Necessary verification was made from the entire details available on records and database of ITBA and Insight portal thereby, I have sufficient form of 'Reason to believe' to frame my opinion. The information available with this office has been analyzed and I have framed my opinion after due application of all the facts a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of belief towards alleged escapement. The onus lies on Revenue to point out culpability with reference to documentary evidences available with it at the time of issue of re-opening notice. The burden is on the Revenue to establish that there was income which escaped assessment as held in TIN Mfg. of India vs CIT (1996) 222 ITR 323 (All.); Hiralal Bhagwati vs CIT (2000) 246 ITR 188 (Guj.). The cause of action under s. 147 is expression 'reason to believe' which puts strict fetters on the AO. 'Reason' pre-supposes logic and must pass the test of objectivity. The formation of 'belief' of the AO is realisation of information which is a subjective exercise but in the same vain, must be arrived in good faith and in bonafide manner. The purpose of recording reasons is to unfold the process which led to formation of belief towards purported escapement. The reasons recorded carry a probative value and are justiciable. 13. On appraisal of reasons so recorded for exercise of drastic powers conferred under s. 147 of the Act for re-opening of assessment for AY 2013-14 in question and having regard to stance taken on behalf of the assessee, it emerges that the solitary cause for formation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to re-open a concluded or completed assessment subject however, to presence of some tangible material which is capable of giving rise to belief towards escapement of income. The reasons or material thus must have a live link with formation of belief. The cause of action under s. 147 is 'reason to believe' towards escapement. 15.2. In this backdrop, we shall now advert to test the reasons for re-opening on the touchstone of main provisions of section 147 of the Act. The main provision essentially provides that belief must be built on some material or information which are specific in nature and reliable in character. In the absence of reference to specific material giving exact nature of transactions, the belief of AO is to be regarded as an abstract one. In the present case, the basis for formation of belief is receipt of some information in the category of 'high risk transactions' triggered in the e-portal of the Department which reflects that the assessee has entered into some significant financial transactions. 15.3. As can be seen from the reasons recorded, the observations made by the AO in the reasons so recorded makes a vague and generic imputations towards escapement. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t see availability of any definite information which may permit holding of reasons to belief before commencement of re-assessment proceedings. The confirnment of powers under s. 147 of the Act is howsoever wide but however not plenary. It postulates that the AO must have reason to believe that chargeable income has escaped assessment. The expression 'reason to believe' is the most valuable safeguard available to prevent arbitrary exercise of jurisdiction. It is trite that the 'reason to suspect' cannot be equated with expression 'reason to believe'. The reasons recorded in the instant case, gives an infallible impression that it is a case of 'reason to suspect' on so-called risk transactions categorised by the automated system of the Department. rather than 'reason to believe'. It is well-settled that notice of re-opening can be supported by the Revenue within the confines of the reasons recorded by the AO alone. The AO cannot supplement the reasons at a later stage. Other principle which is equally well-settled and which applies in the present case is that re-opening of assessment would not be permitted for a fishing or a roving inquiry as a part of requirement of main provision o ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
