Case Law Details
Smt. Premwati Suman Vs ITO (ITAT Agra)
Conclusion: Notice under section 148 could not be issued for verification of information, but here the jurisdictional satisfaction of the essential requirement had to be shown that there had to be reason to believe that there was income chargeable to tax which was not there in the assessment order passed. Thus, the reasons recorded by AO were no reasons in the eye of law for assuming jurisdiction and the assessment orders u/s 144 read with 147 was quashed.
Held: Assessee had purchased a property along with her son. Subsequently, notice under section 148 was issued after recording of reasons. In response to the notice, no return of income was filed and evidences filed to explain the sources of availability of funds did not favour with the view held by AO who framed assessment passed under section 144/147 determining total income. Assessee contended regarding validity of re-opening and also submitted that the addition on merits had wrongly been made. It was held the text of the reasons recorded proved that virtually there had been no application of mind by AO so as to form requisite satisfaction that any income had escaped assessment and that the reasons recorded in the case in hands were no reasons in the eye of law as being completely barren and bald in nature. The content of reasons did not reveal that AO had done some exercise by way of any enquiry having been conducted by him before arriving at the satisfaction for escapement of income. Notice under section 148 could not be issued for verification of information, but here the jurisdictional satisfaction of the essential requirement had to be shown that there had to be reason to believe that there was income chargeable to tax. The reasons recorded by AO should speak his mind and the basis for coming to conclusion that investment had been sourced from income, which should have been disclosed and had not been shown therefore, there was escapement of income. There must be direct nexus between the material and belief of escapement. The purported reasons did not show any such exercise by AO and hence AO had exceeded his authority in wrongly acquiring the jurisdiction in the matter. Thus, the reasons recorded by AO were no reasons in the eye of law for assuming jurisdiction and the assessment orders u/s 144 read with 147 was quashed.
FULL TEXT OF THE ITAT JUDGEMENT
Both these appeals, filed by the respective assessee, call into question correctness of order dated 27.03.2018 passed by the learned CIT(A)-I, Agra in the matter of assessments framed vide orders dated 31.03.2016 under section 147/144 of the Income Tax Act, 1961 for Assessment Year 2008-09 passed by the ITO 1(3), Agra.
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