BABLI SINGH,DASNA vs. ITO, WARD- 1(5), GHAZIABAD

This appeal by the assessee is preferred against the order of the Commissioner of Income Tax [Appeals] - Ghaziabad dated 28.12.2017 pertaining to assessment year 2009-10.

The sum and substance of the grievance of the assessee is that the ld. CIT(A) erred in confirming the assessment order dated 20.12.2016 framed u/s 143(3)/144 of the Income- tax Act, 1961 [hereinafter referred to as 'the Act']. The assessee further alleges that the Assessing Officer reopened the assessment without recording any reasons for reopening the assessment.

Briefly stated, the facts of the case are that the assessee has invested Rs. 1.40 crores in house property jointly with his brother. But no return of income was found to have been filed by the assessee. The Assessing Officer, accordingly, issued notice u/s 148 of the Act, which was duly served upon the assessee.

The bone of contention is as to whether this notice dated 21.03.2016 was a valid notice. Section 148(2) of the Act provides that the Assessing Officer shall, before issuing any notice under this section record his reasons for doing so. On the date of issue of notice, I do not find any reasons recorded by the Assessing Officer for issuing notice u/s 148 of the Act.

Though it appears that the Assessing Officer was making enquiry regarding source of funds for purchase of property, but in my opinion, the same cannot be considered to be a reason to believe that income has escaped assessment.

The contents of the notice issued u/s 142(1) of the Act are exhibited in the body of the assessment order. Obviously, there was no question of the Assessing Officer having any basis to reasonably entertain the belief that any part of the income of the assessee had escaped assessment. In my considered opinion, the Assessing Officer is obliged to record the reasons before issuing notice u/s 148 of the Act.

The purpose of section 151 of the Act is to introduce a supervisory check over the work of the Assessing Officer, particularly, in the context of reopening of assessment. He is expected to exercise the power u/s 147 of the Act to reopen the assessment only after due application of mind. Since the statutory requirement has not been fulfilled, the notice and proceedings thereunder are held to be invalid. The assessee succeeds on this count.

In the result, the appeal filed by the assessee is allowed