Case Law Details
A perusal of the reasons recorded by the AO in the present case shows that there was no rational or intelligible nexus between the reasons recorded by him and the belief entertained about the escapement of income of the assessee company. There was nothing in the said reasons to show existence of any positive income arising to the assessee company which was assessable in his hands and the belief entertained by the AO was based merely on assumption and surmises.
The reasons recorded by him do not show the process of reasoning which could lead to reason to believe that any income of the assessee company chargeable to tax for the year under consideration had escaped assessment. If all these facts of the present case are considered in the light of principles laid down in the various judicial pronouncements discussed above, we are of the view that the mandatory conditions for assuming jurisdiction u/s 147 were not satisfied and this being so, the initiation of reassessment proceedings by the AO u/s 148 read with Section 147 was bade in law. In that view of the matter, we hold that the assessment completed by the AO u/s 147/143 (3) in pursuance of such invalid initiation is also bad in law and the same is liable to be quashed. We order accordingly and allow the additional ground raised by the assessee.
IN THE HIGH COURT OF DELHI AT NEW DELHI
Dated of decision: 10th July, 2012
+ ITA 1325/2009, + ITA 525/2010, + ITA 1697/2010
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It seems that the gist of the judgement of the Delhi High Court has been wrongly stated. It is evident that the gist of the ITAT’s decision has been stated, by failing to appreciate that the same stands reversed by the Hon’ble Delhi High Court by the decision dated 10th July, 2012 in ITA 1325/2009, + ITA 525/2010, + ITA 1697/2010 in the case of COMMISSIONER OF INCOME TAX III versus SHONKH TECHNOLOGY LTD. Please correct the aforesaid mistake.