The Tax PublishersITA No. 1941/Del/2016
2021 TaxPub(DT) 0038 (Del-Trib)

INCOME TAX ACT, 1961

Section 147

Reopening of assessment in exercise of the power under section 148 could not be sustained as there was lack of reasonable material to form a reasonable belief that assessee's income had escaped tax.

Reassessment - Validity - Lack of reasonable material -

AO made reopening of assessment in exercise of the power under section 148 on the ground that assessee's income had escaped tax. Held: It was evident that at the stage of issue of notice, AO was not sure whether income had escaped tax or not. No notice under section 148 can be issued merely on such suspicion. There has to be a reasonable material before AO on the basis of which a reasonable person can make requisite belief. In the instant case, there was lack of reasonable material to form a reasonable belief that income had escaped tax. Under the circumstances, the action of AO of reopening assessment in exercise of the power under section 148 could not be sustained.

REFERRED :

FAVOUR : In favour of assessee.

A.Y. : 2009-10



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