· The case of the assessee was reopened under Section 147 of the Act. It was submitted by the assessee that the objections raised by the assessee were not disposed off by the Assessing Officer (AO) before framing the reassessment order.
· It was also explained by the assessee that the income alleged to have escaped in the reasons recorded had already been included by the assessee in its return of income originally filed.
· The AO was satisfied with assessee’s submissions, and did not make any addition with respect to the income mentioned in the reasons recorded. However, the AO completed the reassessment by making additions on other issues which were not raised in the reasons recorded.
· The Hon’ble Tribunal, after considering the facts of assessee’s case, stated that the only difficulty with the AO was that from the perusal of the return, he was not able to make out whether the impugned income has been included in the return or not. The Tribunal further held that the facts and evidences were brought on record to show that the impugned income has been included in the return of income.
· The Hon’ble Tribunal was of the view that where the reasons for initiation of reassessment proceedings ceased to survive, the AO had no jurisdiction to reassess the issues other than the issues in respect of which the proceedings were initiated.
· The Tribunal further stated that the AO was at liberty to record fresh reasons and initiate re-assessment proceedings in case any other escaped income was found by him, as permitted under the law. But, once the AO was of the view that the escaped income, as alleged in the reasons recorded by him, was not the income actually escaped, but already included in its taxable income and offered to tax by the assessee, it was not legally permissible for him to continue with the reassessment proceedings.
· After considering the reasons recorded, the Tribunal further came to a conclusion that the reasons were recorded on the basis of mere doubts. The Tribunal, therefore, further held that reopening of an assessment is not permitted merely on the basis of some notions or presumptions, nor it is allowed merely for making verification of basic facts.
For further reading, refer the attachment.
Further Reading