The assessment was reopened under S. 147. Accordingly, notice under section 148 was issued to the assessee. the Assessing Officer noted that during the relevant period the assessee company introduced a sum of RS. 1,36,50,000/-on account of share application and added the entire amount under section 68 of the Act. The CIT(A) held that the basic requirement of reopening of the assessment i.e “reason to believe” is not fulfilled at the time of recording the reasons for reopening. An appeal filed by the Revenue is against the order of CIT (A). The Tribunal held that there is no whisper in the reasons recorded, of any tangible material which came to the possession of the assessing officer subsequent to the issue of the intimation. It reflects an arbitrary exercise of the power conferred under section 147”. (AY 2009-10)
Dy. CIT v. Kargwal Products P. Ltd. (2019) 69 ITR 77 (SN) (Mum.)(Trib.)
S. 147 : Reassessment –With in four years-Reopening for taxing Bogus share capital-Even in a S. 143(1) intimation, the AO is not entitled to reopen on the ground that the assessee has received “huge share premium” which was not “examined” by the AO. The AO cannot reopen in the absence of tangible material that shows income has escaped assessment. [S. 68, 143(1)]