RANCHODBHAI K. THESIA,RAJKOT vs. THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1(4), AHMEDABAD

The assessee in his appeal raised a preliminary issue whereby the assessee has challenged the reopening of the assessment by issuance of notice under Section 148 of the Income Tax Act, 1961 (“the Act” in short). & 488/Ahd/2017 Assessee : Raanchodbhai K Thesia AY : 2009-2010 2

With the assistance of learned representatives, we have gone through the record carefully. It emerges out from the record that the Assessing Officer has observed in his assessment order that a search under Section 132 of the Act was carried out in the cases of B. Nanji Group on 04.03.2010 and various documents/material were found and seized from the residential premises of the members of this group. The details of land transactions carried out with the assessees were revealed from the seized material. Accordingly, he issued notice under Section 148 of the Act on 30.08.2012. The assessee has filed return of income declaring total income of Rs.1,14,870/- on 22.10.2012 and accordingly the Assessing Officer has passed the assessment order on 28.03.2014.

Appeal to the learned CIT(A) did bring partial relief to the assessee. While impugning the reopening of the assessment, the learned Counsel for the assessee took us through the reasons for reopening the assessment which is available on page no.17 of the paper-book. Such reasons read as under:- “Name & address of the Assessee : Shri Ranchhodbhai K. Thesia Govindpara, Grain Market Road, Kalavad, Shitla, Rajkot PAN : AEXPT 1534 P AY : 2009-10

REASONS FOR RE-OPENING THE ASSESSMENT UNDER SECTION 148 OF THE INCOME-TAX ACT, 1961 Relationship/Link of the present The registered purchase deeds at Vejalka, case with the persons searched Shiyal etc. have been made in the name of this person Status of the said case viz. Related to the group employee, Director, Consultant etc. Role of the person in influencing The person has lent his name for the business transactions of the investments made by the group person searched & 488/Ahd/2017 Assessee : Raanchodbhai K Thesia AY : 2009-2010 3

A perusal of Section 147 would reveal that it contemplates that if the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of Sections 148 to 153, assess or re-assess such income………….. The prime condition for invoking this section would be the belief of the Assessing Officer which should have a direct link between the material available vis-à-vis formation of belief on the basis of reasons stuck to his mind based on such material. A perusal of the above reasons would indicate that nowhere the Assessing Officer has analyzed the details. He has nowhere recorded as to how he believed that the income has escaped assessment. He has just narrated certain facts in a tabular format; but, how the assessee is associated with that was not mentioned. Even the nature of & 488/Ahd/2017 Assessee : Raanchodbhai K Thesia AY : 2009-2010 4 material is not discernible. Therefore, we are satisfied that there is no live nexus between the material available vis-à-vis formation of belief for escapement of income. There is no justification to uphold such reopening. Accordingly, we quash the reopening which consequentially held the assessment proceedings invalid. The appeal of the assessee is, therefore, allowed and consequentially the appeal of the Revenue is dismissed.

In the result, the appeal of the assessee is allowed; whereas the appeal of the Revenue is dismissed.