Ms Kargwal Products P. Ltd. Vs DCIT (ITAT Mumbai)
Conclusion –
Basic requirement of reopening of assessment is ‘reason to believe’ that the income has escaped assessment without which reopening under Section 148 of Income Tax Act, 1961 is is not sustainable
Facts –
Assessee filed the ROI for AY 2009-10 on 31.03.2010 and the assessment was processed u/s 143 (1). However, assessment was reopened u/s 147 on 29th March, 2014 and accordingly notice u/s 148 was issued on 29th March, 2014.
Assessee contended that the reasons recorded by the AO were not valid to invoke section 148. The reopening is without tangible material available with Assessing Officer for doubting the receipt of share application money. There was no evidence before the Assessing Officer at the time of recording the reasons which could prove that some income had escape assessment. Unless any tangible evidence is referred and relied upon while recording the reasons, the Assessing Officer have no jurisdiction to reopen the assessment
Held –
We have noted that the Assessing Officer nowhere mentioned in the reasons recorded that any tangible material either from assessment record or from other source has come in the notice of Assessing Officer for his reason to believe that any income has escape assessment. Therefore, the basic requirement of reopening of the assessment i.e. reason to believe was not fulfilled at the time of recording the reasons of reopening.
