To invoke sec. 147 AO has to prove that Assessee Escaped Income

Priyank Mittal Vs. ITO (ITAT Agra)

A perusal of the reasons recorded by the AO shows that the allegation as per the reasons to believe escapement of income is bogus purchase/sale of shares, while the impugned addition has been made with respect to gift, which shows that the A.O. had no specific information. Hence, as rightly contended, the reasons recorded are vague and farfetched. The A.O., vide letter date 01.12.2009 (Paper Book Pg.16) alleged that the appellant had entered into the transaction of sale/purchase of shares for Rs. 5,01,250/-, even before initiating the re-assessment proceedings. The appellant, in reply to the above letter, vide letter date 10.12.2009 (Paper Book Pg. 17) categorically submitted that he had not entered into any transaction of purchase/sale of shares. No new adverse information has been brought on record which could suggest any justification for satisfaction to initiate proceedings u/s 147/148, in spite of specific request of the appellant vide letter date 24.11.2010, (Paper Book Pg. 18 &19). In the proceedings u/s 147, the burden is on the A.O. to prove income escaping assessment as it is the belief of the A.O. for income escaping assessment which can trigger such proceedings.

This onus has not been discharged by the AO herein, rendering the initiation of the reassessment proceedings void.

FULL TEXT OF THE ITAT ORDER IS AS FOLLOWS:-

This is assessee’s appeal for assessment year 2004-05, taking the following effective grounds:

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