ACIT CIRCLE-64(1), NEW DELHI vs. ASHIMA NEB, NOIDA

आयकर अपीलीय अिधकरण
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IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH “A”, DELHI
BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER &
SHRI S RIFAUR RAHMAN, ACCOUNTANT MEMBER

आअसं.3953 और 4206 /िदʟी/2019(िन.व. 2008-09)
ITA No. 3953 & 4206/DEL/2019 (A.Y.2008-09)

Assistant Commissioner of Income Tax,
Circle 64(1), R.No. 106, 1st Floor, B-Block,
Civic Centre, Minto Road, New Delhi 110002

...... अपीलाथᱮ/Appellant
बनाम Vs.

Ashima Neb,
L-108, Sector-25, Jalvayu Vihar, G.B Nagar,
Noida, Uttar Pradesh 201301
PAN: ABSPN-3041-M

..... ᮧितवादी/Respondent

CO No. 142/Del/2019 (A.Y. 2008-09)
In ITA No. 4206/Del/2019

Ashima Neb,
L-108, Sector-25, Jalvayu Vihar, G.B Nagar,
Noida, Uttar Pradesh 201301
PAN: ABSPN-3041-M

...... अपीलाथᱮ/Appellant
बनाम Vs.

Assistant Commissioner of Income Tax,
Circle 64(1), R.No. 106, 1st Floor, B-Block,
Civic Centre, Minto Road, New Delhi 110002

..... ᮧितवादी/Respondent

Appellant by : Shri Ashish Tripathi, Sr. DR

Respondent by: S/Shri Gautam Jain, Parth Singhal & Ankit Kumar, Advocates

सुनवाई कᳱ ितिथ/ Date of hearing

:
24/04/2025

घोषणा कᳱ ितिथ/ Date of pronouncement :
:
24/04/2025

ITA Nos. 3953 & 4206/DEL/2019 & CO No. 142/Del/2019 (A.Y. 2008-09)

आदेश/ORDER

PER VIKAS AWASTHY, JM:

These two appeals by the Revenue for AY 2008-09 and cross objection of the assessee are taken up together as they emanate from same set of facts.
2. This appeal by the Revenue is directed against the order of Commissioner of Income Tax (Appeals)-21, New Delhi [hereinafter referred to as (‘the CIT(A)’)] dated
18.02.2019 for assessment year 2008-09. The Revenue in appeal has assailed findings of the CIT(A) holding reopening of assessment bad in law, as well as deleting the additions made by Assessing Officer (AO) in proceeding u/s.143(3) r.w.s. 147 r.w.s. 148
of the Income Tax Act,1961(hereinafter referred to as ‘the Act’).
3. The facts of the case in brief as emanating from records are: The assessee/respondent was an IRS Officer of 1999 Batch. A complaint was received by CBDT against the assessee/respondent from Capt. Jainarayan Prasad Nishad, Member of Parliament alleging that she was having substantial income from nefarious activities.
Another complaint was received by the AO from Shri S.K Shrivastava, IRS Officer On the basis of aforesaid complaints, the AO initiated reassessment proceedings and issued notice u/s. 148 of the Act on 26.03.2015. 4. The assessee objected to reopening of assessment inter alia challenging the juri iction of AO who had issued the notice and also raising serious objection on the veracity of allegations leveled in the complaints on the basis of which reassessment proceedings were initiated. Though, the assesse gave detailed reply to the notices issued to assessee and rebutting accusations in the complaint, the AO rejected

ITA Nos. 3953 & 4206/DEL/2019 & CO No. 142/Del/2019 (A.Y. 2008-09) assessee’s contentions and made addition of Rs.2.75 crores on the basis of Tax Evasion
Petition (TEP) forwarded by Investigation Wing to AO. Further, the AO made addition of Rs.15,34,358/- on account of Foreign Travel Expenses. Aggrieved by the assessment order dated 29.03.2016 passed u/s. 143(3) r.w.s. 148/147 of the Act, the assesee filed appeal before the CIT(A). The CIT(A) vide impugned order not only held the reopening of assessment void ab initio but also deleted the additions on merit, holding the allegation leveled against the assessee/respondent baseless and motivated. Hence, present appeal by the Revenue.
5. Shri Ashish Tripathi representing the department placing reliance on the assessment order prayed for reversing findings of the CIT(A).
6. Per contra, Shri Gautam Jain appearing on behalf of the assessee supported the impugned order and prayed for dismissing appeal of the Revenue. The ld. Counsel submitted that that reopening of assessment is itself bad in law therefore there can be no question of making any additions. He submitted that in the first instance it is a case of change of opinion and secondly, it is a case where there was no incriminating material in the hands of the Assessing Officer to form a belief and record reasons for reopening. The assessment was reopened for making fishing and roving enquiries.
7. We have heard the submissions made by rival sides and have examined the orders of authorities below. The Revenue in ground no. 1 to 4 of appeal has assailed findings of the CIT(A) in holding the proceedings u/s. 147 of the Act void ab initio. The assessee had filed her return of income on 31.07.2009 u/s.139(1) of the Act declaring income of Rs.2,87,041/-. The return of the assesee was processed u/s. 143(1) of the Act and returned income was accepted. Thereafter, on the basis of TEP received by the Investigation Wing of the Department, the assessment was reopened and notice u/s.

ITA Nos. 3953 & 4206/DEL/2019 & CO No. 142/Del/2019 (A.Y. 2008-09)

148 of the Act was issued to the assessee. The reasons recorded for reopening by the AO reads as under:-
"The documents in possession of the undersigned A.O. place contra shows the following transaction in A. Y. 2008-09 (financial year 2007-08).
Assessee has incurred foreign travel expenditure due to travel to U.A.E. between
19.01.2008 to 27.01.2008. However, no details of expenditure have been seen from the return of income filed by the said assessee for A.Y. 2008-09, hence it is estimated that assessee would have incurred about Rs.1.2 Lac as such foreign travel expenditure out of undisclosed income.
Hence, for the A.Y.2008-09, the income chargeable to tax which has escaped assessment amount to or is likely to amount Rs. 1 Lakh or more.
Hence, I have reason to believe that income has escaped assessment in the said A. Y.
2008-09 in the hands of the said assessee Smt. Ashima Neb (PAN-ABSPN3041M) and as such, I am satisfied to issue notice us 148 for reopening of assessment u/s 147 r.w.s.
148, 149 and 151(2) of Income Tax Act, 1961 for the assessment year 2008-09.”
8. A perusal of reasons recorded for reopening shows that the Assessing Officer purportedly has some documents in his possession according to which the assessee has incurred foreign travel expenditure and no details of such expenditure was furnished by the assesse in her return of Income. Before proceeding further it would be imperative to have a look at the Income Tax Return Form-1 for AY 2008-09 to ascertain, Whether there is any column or requirement to report details of foreign travel expenditure? The Form-1 for relevant assessment year is reproduced here in below:

ITA Nos. 3953 & 4206/DEL/2019 & CO No. 142/Del/2019 (A.Y. 2008-09)

ITA Nos. 3953 & 4206/DEL/2019 & CO No. 142/Del/2019 (A.Y. 2008-09)

A close examination of Form ITR-1 for AY 2008-09 for individuals having income from salary would show that there is no column/requirement for disclosing Foreign
Travel Expenditure separately. Therefore, the observation of the AO that the assessee has not furnished the details of foreign expenditure in the return of income is superfluous.
A further perusal of reasons recorded indicates that the Assessing Officer estimated that the assessee would have incurred foreign travel expenditure of Rs.1.2
lakh. The expression ‘estimated’ used by the AO in the reasons recorded for reopening

ITA Nos. 3953 & 4206/DEL/2019 & CO No. 142/Del/2019 (A.Y. 2008-09) clearly indicate that the reasons have been recorded merely on suspicion, surmises and conjectures. There was no concrete incriminating material in the possession of the Assessing Officer indicating that the assessee has actually incurred expenditure in excess of Rs. 1 lakh on foreign travel. The reasons recorded for reopening are the soul of re-assessment proceedings. The reasons have to be recorded only after the AO has substantive material in his possession to form a belief that the income has escaped assessment for the impugned assessment year. The reasons to believe must have a ‘live nexus’ with the material available with the Assessing Officer. The reason to believe should be self speaking and self contained reflecting independent application of mind by the Assessing Officer. The Hon’ble Supreme Court of India in the case of CIT vs.
Kelvinator of India Ltd., 320 ITR 561 has held, “…….. Assessing Officer has power to reopen, provided there is “tangible material” to come to the conclusion that there is escapement of income from assessment. Reasons must have a live link with the formation of the belief”. In the instant case “tangible material” for the AO to form belief is missing, leave aside a live link between the two. The Act does not postulate conferment of unfettered power to the AO to reopen a completed assessment without their being any new tangible material. Even in the case of TEP, the mandatory precondition laid down u/s. 147 of the Act. The AO has to apply his mind on the contents of TEP and ascertain prima facie reason to believe.
9. The Hon’ble High Court in the case of CIT vs. Abhyudaya Builders P Ltd., 340 ITR 310
(All.) has held that;
“ 23. Before starting the proceedings under section 147 of the Income-tax Act, the Assessing Officer must have the "reason to believe" and these words have the following four elements :

ITA Nos. 3953 & 4206/DEL/2019 & CO No. 142/Del/2019 (A.Y. 2008-09)

(i) some material or materials and not mere fancy, imagination, speculation, suspicion;
(ii) a nexus between such material and the belief of escapement of income from assessment in the circumstances outlined in clause (a) or (b);
(iii) an application of mind by the Assessing Officer to such material; and (iv) an inference based on reason drawn tentatively by the officer that income has escaped assessment.”

In the present case the reasons recorded for reopening fails the test of AO’s reason to believe. The aforesaid first condition itself is not satisfied. The AO while recording reasons reopening has used the expression, “it is estimated that assessee would have incurred……”. This shows mere suspicion of the AO and not the belief of AO.
The AO has failed to link tangible material, if any with him with his ‘reason to believe’.
The requirement of law is reason to believe and not ‘reason to suspect’. Re-opening on suspicion and surmise is not valid. Any information form Investigation Wing may ignite suspicion. The AO has to carry out further examination to convert ‘reason to suspect’ to ‘reason to believe’.
10. It is also a well settled legal principle that re-assessment proceedings cannot be initiated for conducting fishing and roving enquiries. The Assessing Officer cannot use tool of reassessment proceedings as a weapon to conduct fishing and roving enquiries in the completed assessment. The AO in the absence of any new tangible material or information, cannot be allowed to make fishing/roving enquiries using the window of provisions u/s. 147 r.w.s. 148 of the Act.
11. We observe from the sequence of events in the instant case, that the AO initiated reassessment proceedings u/s. 147 of the Act after the expiry of four years from the end of the relevant assessment year. For AY 2008-09, the AO issued notice

ITA Nos. 3953 & 4206/DEL/2019 & CO No. 142/Del/2019 (A.Y. 2008-09) u/s. 148 of the Act on 26.03.2015. Where the provision of section 147 r.w.s. 148 of the Act are invoked after expiry of four years from the end of relevant assessment year, the first proviso to section 147 of the Act gets triggered. Therefore, for initiating reassessment proceedings after four years, the AO is also required to show that by reason of failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment that income chargeable to tax has escaped assessment for such assessment year. A perusal of the reasons recorded for reopening in the present case nowhere indicates that income chargeable to tax has escaped assessment for AY 2008-09 by reason of the failure on the part of the assessee to disclose fully and truly all material facts necessary for her assessment for the relevant assessment year.
12. Thus, for more than one count, the reasons recorded for reopening fails to pass the test of judicial scrutiny. Hence, the subsequent proceedings germinating from farce reasons for reopening are vitiated. We find no infirmity in the findings of the AO in holding assessment order emanating from aforesaid reasons as void ab initio. Ergo, ground no. 1 to 4 of appeal by the Revenue are dismissed.
13. Since, we have held re-opening of assessment as bad in law, therefore, the gate to make additions on merits does not open for the AO. The grounds raised by the Department assailing additions on merits become academic, therefore, not deliberate upon.
14. In the result, appeal of the Revenue is dismissed being devoid of any merit.
ITA No. 4206/DEL/2019 & CO No. 142/Del/2019, AY 2008-09
15. This appeal by the Revenue is directed against the order of Commissioner of Income Tax (Appeals)-21 [hereinafter referred to as (‘the Act’)], New Delhi dated

ITA Nos. 3953 & 4206/DEL/2019 & CO No. 142/Del/2019 (A.Y. 2008-09)

ITA Nos. 3953 & 4206/DEL/2019 & CO No. 142/Del/2019 (A.Y. 2008-09)

BY ORDER,
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(Dy./Asstt.