| |
| The Tax Publishers2021 TaxPub(DT) 0473 (Ahd-Trib) INCOME TAX ACT, 1961
Section 147
Where AO merely sought to conclude that there was a case for investigation to unearth and ascertain truthfulness of alleged transactions and mere quoting of section or iteration of expression 'reason to believe' would not satisfy the requirement of law and exercise of power under section 147 cannot be made on the basis of mere ipse dixit of Revenue, therefore, notice issued under section 148 was not backed by authority of law.
|
Reassessment - Legality of jurisdiction under section 147 - AO merely sought to conclude that there was a case for investigation to unearth and ascertain truthfulness of alleged transactions -
Assessee challenged the action of AO in usurping jurisdiction under section 147 wrongfully. He contended that reasons recorded by AO did not meet the pre-requisites for assumption of jurisdiction and therefore, notice issued under section 148 pursuant to the reasons spelt out was bad in law. It was essentially submitted that consequent re-assessment order was without authority of law. Further contention was that reasons were recorded subsequent to issuance of notice and whole action of AO was vitiated in law. Revenue pointed out that reasons were actually recorded itself which was evident from the proposal sent by AO to Jt. CIT for his approval under section 151. The reasons recorded showing was merely a date on which the reasons recorded might have been reproduced and provided to assessee and did not convey date of recording of reasons per se. Held: No definite formation of belief towards escapement of income was existing at the time of issuance of notice by AO and he merely seeks to conclude that there is a case for investigation to unearth and ascertain truthfulness of alleged transactions. Mere quoting of section or iteration of expression 'reason to believe' would not satisfy the requirement of law. Provisions of section 147 which gives drastic powers to reopen a time barred/completed assessment can be invoked only when the conditions precedent for exercising the jurisdiction clearly exists. Exercise of power under section 147 cannot be made on basis of mere ipse dixit of Revenue. Hence, notice issued under section 148 was not backed by authority of law and consequently bad in law.
Relied:Pr. CIT v. Manzil Dineshkumar Shah (2018) 406 ITR 326 (Guj) : 2018 TaxPub(DT) 2717 (Guj-HC) and Pr. CIT v. Manzil Dineshkumar Shah (2019) 101 Taxmann.com 259 (SC).
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2009-10
IN THE ITAT, AHMEDABAD BENCH
 SUBSCRIBE FOR FULL CONTENT
|