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DATE: January 14, 2016 (Date of pronouncement)
DATE: January 25, 2016 (Date of publication)
AY: 2004-05
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CITATION:
S. 147: Reopening of assessment to take remedial action pursuant to audit objections as per Instruction No. 9 of 2006 is not valid if AO disagrees with the objections. Instruction No. 9 cannot override the requirement in s. 147 that AO should form his own belief that income has escaped assessment

The Court holds instruction No. 9 of the CBDT dated 7th November, 2006 cannot possibly override the statutory powers to be exercised by an AO in terms of Section 147 of the Act. In other words the said instruction has to be read consistent with proviso (a) to Section 119 (1) of the Act and cannot, as was erroneously understood by the Respondent, compel the AO to issue the notice u/s 148. If the CBDT Instruction No. 9/2006 is read to the contrary, it would fall foul of Section 119 of the Act.

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DATE: April 17, 2015 (Date of pronouncement)
DATE: November 26, 2015 (Date of publication)
AY: 1991-92
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CITATION:
S. 143(1)/ 147: As a s. 143(1) intimation is not an assessment, there is no question of "change of opinion" by the AO

Can it be said that any “assessment” is done by them? The reply is an emphatic “no”. The intimation under Section 143(1)(a) was deemed to be a notice of demand under Section 156, for the apparent purpose of making machinery provisions relating to recovery of tax applicable. By such application only recovery indicated to be payable in the intimation became permissible. And nothing more can be inferred from the deeming provision. Therefore, there being no assessment under Section 143(1)(a), the question of change of opinion, as contended, does not arise

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DATE: October 13, 2015 (Date of pronouncement)
DATE: November 26, 2015 (Date of publication)
AY: 2009-10
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CITATION:
S. 143(1)/ 147: If the assessment is reopened on the ground of “bogus purchases”, the reasons must contain an averment of which details on record reflect the bogus purchases

The returns filed by the assessee have been processed under section 143(1) of the Act. The Assessing Officer in the reasons recorded for the purpose of reopening the assessment has placed reliance upon the record of the case. As noted hereinabove, there is no assertion as regards on what basis the Assessing Officer has stated that the assessee had made claim in respect of bogus purchases in the trading and the Profit and Loss Account as expenditure. The Assessing Officer has stated that on verification of the details available on record, it has been noticed that the assessee has made bogus purchases; however, no specific averments are made as regards which details available on record reflected such bogus purchases

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DATE: October 28, 2015 (Date of pronouncement)
DATE: November 20, 2015 (Date of publication)
AY: 2006-07
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CITATION:
S. 147: Reopening solely on the basis of information received from another AO that the assessee has booked bogus bills but without independent application of mind to the information renders the reopening void

At the time of recording of the reasons the Assessing Officer apparently was not having any idea about the nature of the transactions entered into by the assessee. In the reasons recorded there is no mention about the nature of the transactions. As per provision of section 147 the reasons to believe has to be that of the Assessing Officer and further there have to be application of mind by the Assessing Officer. The Assessing Officer was also not aware of the nature of the accommodation entries. In the reasons recorded he has simply mentioned the names of the party and the amount and nowhere has stated the nature of such entry. This also shows that the Assessing Officer has made no effort to look into the return of the assessee which was available with him

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DATE: October 28, 2015 (Date of pronouncement)
DATE: November 20, 2015 (Date of publication)
AY: 2001-02
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CITATION:
S. 147/ 148: Issue of furnishing the ‘Reasons’ for reopening the assessment goes to the root of the matter. In the event of failure of the AO to furnish the reasons, the reopening is bad in law

The undisputed facts are that, one – no ‘Reasons’ are available in the assessment record, and two there is nothing on record to show that certified copy of verbatim ‘Reasons’ was ever provided to the assessee, despite the request made by the assessee before AO, more than once. It clearly indicates that no ‘Reasons’ were recorded infact and therefore, these could not have been provided to the assessee. Had the ‘Reasons’ been recorded by AO, these would have definitely been provided to the assessee. The position of law is clear. It has been held by Hon’ble Supreme Court in the case of GKN Driveshaft 259 ITR 19, that it is mandatory on the part of the AO to provide the copy of the reasons to the assessee and to meet the objections filed by the assessee thereto, if any, before the AO can frame the reassessment order. It is further noted that Hon’ble Bombay High Court in the case of CIT v. Videsh Sanchar Nigam Ltd. (2012) 340 ITR 66 (Bom.), has held that in case reasons are not furnished by the AO to the assessee, before completion of reassessment proceedings, reassessment order cannot be upheld

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DATE: October 12, 2015 (Date of pronouncement)
DATE: November 5, 2015 (Date of publication)
AY: 2002-03
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CITATION:
S. 147/ 148: Dept warned not to harass taxpayers by reopening assessments in a mechanical and casual manner. Pr CIT directed to issue instructions to AOs to strictly adhere to the law explained in various decisions and make it mandatory for them to ensure that an order for reopening of an assessment clearly records compliance with each of the legal requirements. AOs also directed to strictly comply with the law laid down in GKN Driveshafts 259 ITR 19 (SC) as regards disposal of objections to reopening assessment

The Court is of the view that notwithstanding several decisions of the Supreme Court as well as this Court clearly enunciating the legal position under Section 147/148 of the Act, the reopening of assessment in cases like the one on hand give the impression that reopening of assessment is being done mechanically and casually resulting in unnecessary harassment of the Assessee

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DATE: August 14, 2015 (Date of pronouncement)
DATE: November 4, 2015 (Date of publication)
AY: 2006-07
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CITATION:
S. 147/ 148: Non-furnishing of reasons for reopening to assessee renders reassessment void

The question of non-furnishing the reasons for re-opening an already concluded assessment goes to the very root of the matter. Since such reasons had not been furnished to the appellant, even though a request for the same had been made, we are of the opinion that proceedings for the re-assessment could not have been taken further on this ground alone

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DATE: October 8, 2015 (Date of pronouncement)
DATE: October 19, 2015 (Date of publication)
AY: 2003-04
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CITATION:
S. 147: Reopening only on the basis of information received that the assessee has introduced unaccounted money in the form of accommodation entries without showing in what manner the AO applied independent mind to the information renders the reopening void

Without forming a prima facie opinion, on the basis of such material, it was not possible for the AO to have simply concluded: “it is evident that the assessee company has introduced its own unaccounted money in its bank by way of accommodation entries”. In the considered view of the Court, in light of the law explained with sufficient clarity by the Supreme Court in the decisions discussed hereinbefore, the basic requirement that the AO must apply his mind to the materials in order to have reasons to believe that the income of the Assessee escaped assessment is missing in the present case

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DATE: September 16, 2015 (Date of pronouncement)
DATE: October 13, 2015 (Date of publication)
AY: 2008-09
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CITATION:
S. 148: If Dept behaves in an irresponsible manner and does not furnish the record reasons on the basis that the assessee was already aware of them, the assessment has to be quashed

In issues such as this, i.e. where jurisdictional issue is involved the same must be strictly complied with by the authority concerned and no question of knowledge being attributed on the basis of implication can arise. We also do not appreciate the stand of the revenue, that the respondent-assessee had asked for reasons recorded only once and therefore seeking to justify non-furnishing of reasons. We expect the state to act more responsibly

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DATE: October 9, 2015 (Date of pronouncement)
DATE: October 13, 2015 (Date of publication)
AY: 2002-03
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CITATION:
S. 147: Laid laid down in ALA Firm v. CIT 189 ITR 285 (SC) does not mean that an assessment can be reopened merely because the AO omitted to apply a binding judgement

The Court is of the view that, in a case where the assessment is sought to be reopened in 2009, four years after it was originally made, i.e. 2005, the mere fact that there was a judgment of the Supreme Court of 1997 which was not noticed by the AO when he framed the original assessment cannot per se constitute the only material on the basis of which the assessment could have been reopened. When on the same material, four years after the assessment year for which the original assessment is finalised, the AO seeks to reopen the assessment on the basis of a judicial precedent delivered more than eight years earlier, it would be a case of mere ‘change of opinion’, something clearly held impermissible by CIT v. Kelvinator of India Ltd. (supra), The threshold requirement of that the AO should, on the basis of some tangible material, conclude that there was escapement of income on account of the Assessee failing to disclose material particulars, is not fulfilled in the present case

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