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TMI Blog2010 (9) TMI 1310X X X X Extracts X X X X X X X X Extracts X X X X ..... .O. first. 3. The issue raised is that Ld. Commissioner of Income Tax (Appeals) erred in confirming the Assessing Officer s action of framing the assessment u/s 147 of the IT Act. More so, when necessary ingredients of that section are missing. 4. The assessee in this case filed return of income on 30.10.2001 declaring a loss of Rs. 15381/-. The scrutiny u/s 143(3) was completed on 27.11.2003 on Nil income. Thereafter the Assessing Officer noted that information in that case has been received from the Investigation Wing of the Department that the assessee company has received accommodation entries of Rs. 4 lacs vide cheque no. 916372 and 916373 dated 28.3.2001 amounting to Rs. 2 lacs from each M/s Maa Shakumbhari Stone Crushers Pvt. Ltd. in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Kelvinator India Ltd. reported in 256 ITR 1, wherein it was held on page 18 of the report that the said Circular having been issued u/s 119 is binding on the revenue. Hence assessee submitted that change of opinion cannot form the basis of reopening of completed assessment. It was further submitted that as per the said circular what is the requirement for law for reopening of completed assessment is that reasons to believe of the Assessing Officer that income has escaped assessment based on material on record which has lead to the formation of belief and not opinion of the Assessing Officer . In this case the Assessing Officer had no material before him. on the basis of which he could form the belief that income has escaped assessment in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e were accommodation entries. Accordingly, it is directed that the addition of Rs. 16,00,000/- may be deleted. 5.2 Against this order both the revenue and assessee are in appeal before us. While the revenue has appealed against the decision of the Ld. Commissioner of Income Tax (Appeals) on the merits of the case the assessee in the cross objection has urged that Ld. Commissioner of Income Tax (Appeals) has erred in confirming the Assessing Officer s action of framing the assessment u/s 147 of the IT Act. 5.3 On the issue of jurisdiction, we have heard both the counsels and perused the records. In this case the reasons recorded as supplied to the assessee for reopening the assessment u/s 147 dated 16.7.2007 reads as under:- The case was reo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion and in sections 148 to 153 referred to a the relevant assessment year): Provided that where an assessment under sub-section(3) of section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four year from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under section 139 or in response to a notice issued under sub-section(1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment, for that assessment year. 5.6 In the case of Haryana Acrylic Manufacturer Co. cite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 147. However, no action can be taken under section 147 after the expiry of four years from the end of the relevant assessment year if the conditions that (a) an assessment under sub-section (3) of section 143 of this section has been made for the relevant assessment year, and (b) unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee : (i) to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148, or (ii) to disclose fully and truly all material facts necessary for his assessment for that assessment year, are satisfied. Merely having reason to believe that income had escaped assessment is not s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Jurisdictional High Court decision cited above the reassessment cannot be sustained as original assessment was done u/s 143(3) and 4 years thereafter reopening was done on the basis of information / direction received from the Investigation Wing of the Department. Assessing Officer not having himself formed a belief that there is escapement of income in the reasons recorded, the reopening cannot be justified. Accordingly, in the background of the aforesaid discussion and precedent, we allow the Cross Objection filed by the assessee and hold that the assessment was devoid of jurisdiction. 6. Since we have already quashed the assessment on jurisdiction, the adjudication on merits of the case are academic. Hence the appeal by the revenue is t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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