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| The Tax Publishers2019 TaxPub(DT) 7404 (Jp-Trib) INCOME TAX ACT, 1961
Section 148
Where reasons recorded that assessee had made bogus purchases was not based on any enquiry or verification of record by AO but this was simply reproduction of information received from Investigation Wing, therefore reasons recorded by AO manifest that there was no application of mind and the averments as recorded in the reasons were very vague and held reassessment notice as invalid.
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Reassessment - Validity - Bogus purchases -
Assessee was carrying on business of trading, import and export of precious and semi-precious stones. AO initiated reassessment proceedings by issuing notice under section 148. Assessee raised the objection against the notice issued under section 148 which was disposed of by AO. Reassessment was completed by AO whereby AO made addition in respect of the alleged bogus purchases made by assessee. Held: Reason that assessee had made bogus purchases was not based on any enquiry or verification of record by AO but this was simply reproduction of information received from Investigation Wing. The said information was incomplete as regards the details of purchases and the parties from whom such purchases were made by the assessee. Thus, reasons recorded by AO manifest that there was no application of mind and the averments as recorded in the reasons are very vague. The formation of belief on such incorrect and vague reasons would lead the reopening of assessment as invalid.
REFERRED : Mumtaz Haji Mohmad Memon v. ITO (Special Civil Application No. 21030/2017 dated 21-3-2018 (Guj.HC) : 2018 TaxPub(DT) 7058 (Guj-HC) Inductotherm (India) Pvt. Ltd. v. M. Gopalan (2013) 356 ITR 481 (Guj.) : 2012 TaxPub(DT) 3254 (Guj-HC) Rajendra Prasad Choudhary v. A.C.I.T. (ITA 1495-1496/JP/2018 dated 12-6-2019) (Jaipur Tribunal) : 2019 TaxPub(DT) 5469 (Jp-Trib) Nirmala Agarwal v. A.C.I.T. (ITA 995-996/JP/2016 dated 11-4-2018)(Jaipur Tribunal) : 2018 TaxPub(DT) 3533 (Jp-Trib)
FAVOUR : In assessee's favour
A.Y. :
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