No Reopening on Borrowed Satisfaction when view was already taken by AO

Alliance Filaments Ltd Vs ACIT (Gujarat High Court)

A plain reading of the reasons recorded revels that the Assessing Officer has solely relied on the information received from the Investigation Wing- Surat. We are of the view that, the Assessing Officer has not applied his independent mind while recording the reasons that the income has escaped assessment. The original assessment record was with the Assessing Officer. The scrutiny assessment framed by the respondent has been challenged by the assessee company and the appeal is pending before the Appellate Tribunal. As the issue of alleged transaction of Rs. 7,50,055/- was earlier added by the then Assessing Officer under Section 68 of the Act at the original assessment stage, the same amount cannot be brought to tax once again in the reassessment proceedings. 15. It is not the case of the revenue that the transaction as reported by the Investigating Wing, Surat was distinct and has no relation with the earlier scrutiny assessment made  nder Section 143(3) of the Act. Thus, as such there was no tangible material in the hands of the Assessing Officer for reopening of the proceedings.

We are of the view that the Assessing Officer has acted mechanically based on the information received from the Investigating Wing, Surat for the purpose of reopening of the assessment and any independent satisfaction to the effect that the income chargeable to tax has escaped assessment is not reflected.

17. It is a settled principle of law that the respondent cannot justify by taking recourse to some material and information beyond the scope of the reasons recorded by the Assessing Officer prior to reopening. In the instant case, the respondent has traveled beyond the scope of reasons recorded in order to justify the action of reopening. It is pertinent to note that while disposing of the objections against the reopening, Assessing Officer has observed that it has credible information as received by the office pertaining to the transaction claimed as a part of turnover and same can be clearly made out from the copy of the reasons recorded provided by the office. After close scrutiny of the reasons recorded, the Assessing Officer did not have refer the facts that the transactions was part of the turnover. Therefore, we hold that the formation of belief entertained by the Assessing Officer seems to be vague and based on irrelevant material.

 In view of the discussion made hereinabove, we hold that the assumption of jurisdiction on the part of the Assessing Officer under Section 147 of the Act to reopen the assessment by issuing the impugned notice dated 28.03.2019 under Section 147 of the Act is without authority of law which renders the notice unsustainable.

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