Case Law Details
S. Rajalakshmi Vs ITO (Bombay High Court)
Conclusion: Reassessment made by AO was valid as assessee was unable to explain the source of income from which investments had been made by furnishing her bank statements and AO clearly had reason to believe that income of assessee with reference to these three investments had escaped assessment.
Held: In the assessment proceedings against son of assessee, the investments made in three Mutual Funds (Birla Mutual Fund, Standard Chartered Mutual Fund and Standard Chartered Mutual Fund) were brought to tax in the hands of son of assessee. Assessee’s son contended that he being the second holder of these investments, these amounts could not be brought to tax in his hand and could be brought to tax, if any, in the hands of assessee. It was not in dispute that when assessee filed her return under Section 139(1), she had not explained the source of her investments. AO came to conclusion that he had “reason to believe” that the income of assessee had escaped assessment under section 147 and hence proceeded to issue the notice under Section 148. It was held assessee was unable to explain the source of income from which these investments had been made by furnishing her bank statements, and which finding had even not been challenged. AO clearly had reason to believe that the income of assessee with reference to these three investments had escaped assessment.
FULL TEXT OF THE HIGH COURT ORDER / JUDGMENT
1. This appeal is filed under Section 260A of the Income Tax Act, 1961 (for short the “I.T.Act, 1961”) taking exception to the Judgment and Order dated 27th March, 2018 passed by the “D” Bench of the Income Tax Appellate Tribunal, Mumbai (for short the “ITAT”), whereby the ITAT dismissed the appeal of the appellant and upheld the exercise of power by the Assessing Officer (for short “A.O.”) under Section 147 of the I.T.Act, 1961 for the Assessment Year (for short “A.Y.”) 2007-08. According to the appellant, though the reasons recorded by the respondent – revenue, for invoking Section 147 of the I.T. Act, 1961 did not contain any basis or material whatsoever to give rise to any “reason to believe” that the appellant’s income had escaped assessment, notice under Section 148 of the I.T.Act was issued. It is in this backdrop that the learned Senior Counsel appearing on behalf of the appellant submitted that the order of the ITAT gave rise to the following substantial question of law:-
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