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| The Tax Publishers2020 TaxPub(DT) 3914 (Mum-Trib) INCOME TAX ACT, 1961
Section 147
Reason to believe does not mean that reasons for reopening should have been factually ascertained by legal evidence or conclusion before the reopening of an assessment. In assessee's case, AO reopened assessment on sound footing, based on fresh tangible material coming to his possession after completion of assessment under section 143(1) which clearly suggested escapement of income within the meaning of section 147, there was a nexus between reasons recorded for reopening of assessment and escapement of income and hence, reopening was valid.
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Reassessment - Validity - Assessee pleading no conclusive proof as to escapement - Fresh tangible material in possession of AO
AO received information in respect of unpaid trading liability and subsequent conversion of said liability into share application money. Accordingly, AO reopened assessment. Assessee challenged this on ground of no conclusive proof as to tax escapement. Held: Reason to believe does not mean that reasons for reopening should have been factually ascertained by legal evidence or conclusion before the reopening of an assessment. Sufficient or correctness of material is not a thing to be considered at the stage of issue of notice. In assessee's case, AO reopened assessment on sound footing, based on fresh tangible material coming to his possession after completion of assessment under section 143(1) which clearly suggested escapement of income within the meaning of section 147 there was a nexus between reasons recorded for reopening of assessment and escapement of income and hence, reopening was valid.
Relied:Asstt. CIT v. Rajesh Jhaveri Stock Brokers Pvt. Ltd. (2007) 291 ITR 500 (SC) : 2007 TaxPub(DT) 1257 (SC) and Raymond Woollen Mills Ltd. v. ITO (1999) 236 ITR 34 (SC) : 1999 TaxPub(DT) 348 (SC).
REFERRED :
FAVOUR : Against the assessee.
A.Y. : 2010-11
INCOME TAX ACT, 1961
Section 41(1)
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