Case Law Details
Shujaat Ali Khan Vs ITO (ITAT Jaipur)
Facts- Case of the assessee was reopened u/s 147 and notice u/s 148 was issued. The assessment U/s 143(3) r.w.s 147 was completed after making addition of Rs. 7,71,826/- being alleged undisclosed short-term capital gain on alleged sale of immovable property after invoking Section 50C of the Act.
Assessee submitted that the reasons were recorded by the AO on the basis of CIB information and on the basis of said information and non-filing of return, it was concluded that the income has escaped the assessment. After recording the reasons, a notice u/s 133(6) dated 03.08.2015 was issued to Sub-Registrar-2 to obtain the copy of Registered Sale deed of the transaction. It is important to note that the registered sale deed was obtained by the AO after recording the reasons, thus, at the time of recording the reasons, there was no tangible material in the hands of the AO to have any reason to believe that income to the extent of Rs.7,17,286/- has escaped the assessment and the AO was having the CIB Information only.
Conclusion-In Meenakshi Overseas Pvt. Ltd. Delhi HC has held that “the reopening of assessment under Section 147 is a potent power not to be lightly exercised. It certainly cannot be invoked casually or mechanically. The heart of the provision is the formation of belief by the AO that income has escaped assessment. The reasons so recorded have to be based on some tangible material and that should be evident from reading the reasons. It cannot be supplied subsequently either during the proceedings when objections to the reopening are considered or even during the assessment proceedings that follow. This is the bare minimum mandatory requirement of the first part of Section 147 (1) of the Act.”
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