HEERA LAL KASARA,UDAIPUR V. ITO, WARD-2(1), UDAIPUR

ITA 303/JODH/2024

AI Insights

The case involves Heera Lal Kasara, an individual engaged in the advertising and marketing contract business, who appealed against the order of the CIT (A), National Faceless Appeal Centre, Delhi. The appeal was against the reassessment order for the assessment year 2009-10, which was based on the guidelines issued by the Indian Newspaper Society (INS) that suggested a minimum gross profit rate of 15%. The original assessment under section 143(3) had accepted the books of accounts of the assessee, but the reassessment under section 147 was initiated based on these guidelines, alleging that the assessee had shown a lesser gross profit. The Tribunal found that the reassessment was beyond the statutory time limit and that the guidelines of INS were not applicable to the assessee, leading to the allowance of the appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 669563 (ITAT-JODHPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-06-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Other Referred Cases: Sands Advertising vs. Assessee ITAT Bangalore ITA No. 790/bang/2009 to ITA 795/bang/2009, Kshitij Ranjan Vs. INS before the Competition Commission of India, CIT v. Shoorji Vallabhdas & Co.[(1962) 46 ITR 144/[TS-1-SC-1962], International Forest Company vs. CIT (1975) 101 ITR 721 (J&K), ACIT vs. Ram Manohar Singh (2009) 178 Taxman 47 (Jabalpur), CIT v. Mahesh Chand (1993) 199 ITR 247 (All.), Bharat Jayantilal Patel v. UOI (2015) 378 ITR 596 (Bom.), Dhakeshwari Cotton Mills Ltd. v/s. CIT (1954) 26 ITR 775 (SC), CIT v. Mahesh Chand (1993) 199 ITR 247 (All.), Hindustan Lever (2004) 268 ITR 332 (Bombay)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KARNI DAN
• Assessee Lawyers: AMIT KOTHARI
• Keywords: Set aside; Difference of opinion; Change of opinion; Reassessment proceedings; Corroborative evidences; Rejection of books of accounts; Income from undisclosed sources; Reopening of assessment; Gross profit estimation; Tangible material
• Section: 147; 148; 143(3); 142(1); 133(6)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR. BEFORE: DR. MITHA LAL MEENA, ACCOUNTANT MEMBER & DR. S. SEETHALAKSHMI, JUDICIAL MEMBER I.T.A. No. 303/Jodh/2024 Assessment Year: 2009-10 Heera Lal Kasara, 386, Udaipur Pran Group of Publicity, Near Alok School, Sector-11, Hiran Magri, Udaipur. Vs. Income Tax Officer, Ward 2(1), Udaipur. PAN No. ACAPK9375L Appellant Respondent Appellant by Sh. Amit Kothari, C.A. Respondent by Sh. Karni Dan, Addl.CIT (Sr.DR Date of Hearing 07/05/2025 Date of Pronouncement 25/06/2025 ORDER PER: DR. S. SEETHALAKSHMI, J.M. This is an appeal filed by the assessee against the order of ld. CIT (A), National Faceless Appeal Centre (NFAC), Delhi dated 27.02.2024 passed under section 250 of the I.T. Act, 1961, for the assessment year 2009-10. The assessee has raised the following grounds of appeal :- 2 ITA No. 303/Jodh/2024 Heera Lal Kasara, Udaipur. “1. The ld. CIT (A) has erred in sustaining the action of ld. AO in initiating the proceedings u/s 148, which is bad in law and bad on facts. The original assessment was made u/s 143(3) after detailed verification and simply on the basis of suspicion and surmises the proceedings had been initiated which is bad in law. 2. The ld. CIT (A) has erred in sustaining the addition of Rs. 47,79,046/- made by the ld. AO by estimating the gross profit rate on the basis of guidelines of traded and industry of such margin in such trade. The addition so sustained is bad in law and bad on facts. 3. The appellant crave liberty to add, amend, alter, modify, delete any of the ground of appeal on or before its hearing before your honours.” 2. The brief facts of the case are that the assessee is an Individual and engaged in the advertising and marketing contract business (print media) in the name and style of M/s. Udaipur Pran Group of Publicity. The assessee filed his return of income for the assessment year 2009-10 on 03.02.2010 declaring total income of Rs. 3,03,220/-. The return was processed under section 143(1) on 05.03.2011. Later on, the case was selected for scrutiny through CASS, accordingly notice under section 143(2) of the Income Tax Act, 1961 was issued on 22.10.2010 and the same was duly served upon the assessee. Subsequently due to change of incumbent, a fresh notice under section 143(2) was issued on 23.05.2011 fixing the case for hearing on 09.06.2011. In compliance to the notices, the assessee attended the hearing and produced the required details/books of account with supporting evidence along with written submission. During the year under consideration, the 3 ITA No. 303/Jodh/2024 Heera Lal Kasara, Udaipur. assessee has shown gross receipts from advertising and marketing contract business activity at Rs. 3,70,08,350/-in the Profit& Loss account, besides FD interest of Rs. 94,570/-, rental income of Rs. 36,000/-. Net profit is shown at Rs. 5,67,020/- giving a net profit rate of 1.53% as against Net Profit rate of 1.49%in the last year on gross receipts of Rs. 3.55 crores. The books of accounts produced by the assessee along with supporting vouchers were examined by the AO on test check basis. Further, the AO while making assessment noted that the assessee claimed various expenses on account of office expenses, telephone expenses, travelling, vehicle, conveyance, discount and rebate etc. The AO, keeping in view the possibility of involvement of non business uses, made a lump sum addition of Rs. 50,000/- and assessed the total income of the assessee at Rs. 3,53,220/- vide his assessment order passed under section 143(3) of the I.T. Act, 1961 dated 19.07.2011. The case of the assessee was reopened under section 147 of the IT Act, 1961 on the basis of guidelines of Indian Newspaper Society issued by INS. The reason for reopening of the assessment was that the GP as per guidelines of Indian Newspaper Society should be 15% whereas the assessee has shown lesser. The reassessment proceedings under section 147 of the IT Act were initiated after recording reasons duly approved by the Pr. CIT, Range-1, Udaipur vide his letter no. 3822 dated 22.03.2016 and notice under section 148 of the Act was issued on 4 ITA No. 303/Jodh/2024 Heera Lal Kasara, Udaipur. 22.03.2016 and duly served upon the assessee.The assessee vide his letter dated 27.04.2016 submitted that the return of income filed earlier for AY 2009-10 may be treated as return filed in compliance to notice under section 148. Notices under section 143(2) and 142(1) of the IT Act, 1961 along with questionnaire were issued on 07.06.2016 fixing the hearing on 13.06.2016. The assessee was also provided the reasons for reopening of assessment and copy of INS guidelines. In response to the notices under section 143(2) and 142(1), the assessee attended and submitted the requisite details, information, documents and clarifications sought as per the order sheet entries.During the course of assessment proceedings, the assessee filed the objections vide letter dated 24.11.2016 against reassessment proceedings initiated under section 147 of the Act. The objections of the assessee were duly disposed off by the AO vide his letter dated 15.12.2016.Thereafter, the AO issued show cause notice asking the assessee to show cause as to why the undisclosed GP of Rs. 47,79,046/- should not be treated as income from undisclosed sources vide letter dated 23.12.2016 as under :- “ In this connection, please refer to the letter no. 3095 of this office dated 15.12.2016 vide which your objections raised against the reopening proceedings u/s 147 were disposed off. On perusal of your books of accounts and in light of facts of the case, it is seen that you have not shown gross profit @ 15% which is mandatory for you, being a 5 ITA No. 303/Jodh/2024 Heera Lal Kasara, Udaipur. member of Indian Newspaper Society (INS). In view of these facts, you are hereby given show cause : (i) Reason/explanation why not the guidelines of Indian Newspaper Society (INS) are binding on as you (as advertising agency) while preparing books of accounts. (ii) As per the guidelines of Indian Newspaper Society (INS), you had to show/declare minimum of 15% gross profit. The gross profit @ 15% on total turnover of Rs. 3,70,80,350/- comes to Rs. 55,51,752/- while as per your ITR filed online on 27.09.2009, you had declared gross profit only at Rs. 7,72,206/-. Thus, you have shown less gross profit of Rs. 47,79,046/- (Rs. 55,51,252 – Rs. 7,72,206). Therefore, it is hereby show caused why not this difference of Rs. 47,79,046/- be treated as your undisclosed income and added to your total income for AY 2009-10. Please furnish the justification/explanation on next hearing on 27.12.2016 at 11.00 AM. In case of non-compliance, it would be considered that you have nothing to offer in this regard and as the assessment of your case is time barring on 31.12.2016, the assessment of your case would be completed on the above lines without providing any further opportunity. Notice u/s 142(1) of I.T. Act, 1961 is also enclosed herewith.” In response to the show cause notice dated 23.12.2016, the assessee mainly denied that the guidelines issued by the INS are not applicable to his case. The ld. AR of the assessee vide his submission dated 28.12.2016 submitted as under : “ The Indian Newspaper Society is a Society registered under the provisions of Section 25 of the Indian Companies Act. Many major newspaper and periodicals are the member publications of the Society. The society recognizes advertising 6 ITA No. 303/Jodh/2024 Heera Lal Kasara, Udaipur. agencies and grants accreditation to them as per the rules and regulations framed in this respect. The advertising agencies that are granted accreditation by it are entitled to a 60 days unlimited credit facility from the member publications whereas a non-accredited advertising agency does not have any credit facility and would have to furnish advance deposits to multiple publications so as to ensure publication of their advertisements. M/s. Shiva advertisers is not registered with INS and hence not entitled for credit facility from news papers. M/s. Shiva advertisers got big customers like RSMM, Raj. Vidhyapeeth for which he wants to utilize the credit facility from newspapers though us and as per market trend as we both are in the same business we have to help each other these advertisement were booked through us at very minimal rate i.e. 1%. This is market trend that when any one agency get big business and want to get it through INS member, the discount rate is shared by both the advertising agency. In support of our above mentioned version of sharing of trade discount we rely on Sands Adverting v/s Assessee ITAT bangalore ITA No. 790/bang/2009 to ITA 795/bang/2009 (copy of which is enclosed for your ready reference) From above it is clear that assessee has charged trade discount fully and no addition on this ground can be made.” The AO considered the submissions of the assessee but could not find it acceptable. Thereafter, the AO invoking the provisions of section 145(3) of the IT Act, 1961 rejected the books of accounts of the assessee and taking the Gross Profit @ 15% in view of INS guidelines, made an addition of Rs. 47,79,046/-, vide his order passed under section 143(3) read with section 147 of the IT Act, 1961 dated 29.12.2016, as under :- 7 ITA No. 303/Jodh/2024 Heera Lal Kasara, Udaipur. Turnover of the assessee during the year (AY 2009-10) Gross profit declared by the assessee Gross profit as per INS guidelines obligatory to the assessee i.e. @ 15% Difference in Gross profit 3,70,08,350 7,72,206 55,51,252 47,79,046 Aggrieved by the order of the AO, the assessee preferred appeal before the ld. CIT (Appeals), who dismissed the appeal of the assessee. Now, being further aggrieved by the order of the ld. CIT (A), the assessee is in appeal before us. 3. Before us, the ld. AR of the assessee submitted his written submission as under:- “1. The assessee runs advertising business since long. 2. The assessee’s case for the AY 2009-10 was assessed u/s 143(3) making a lump sum addition of Rs. 50000.00. 3. Earlier AY 2006-07 was also assessed u/s 143(3) making lump sum addition of Rs. 30000.00. While assessing the case, the AO raised the question of GP @ 15% which was replied stating that as per trade practice the assessee has to transfer some of its commission to his customers. The AO is satisfied about the explanation of the assessee for low GP and also about method of accounting followed by assessee. Copy of assessment order and submission of AR is enclosed herewith for your ready reference. 4. The assessee’s case of AY 2009-10 was reopened u/s 147. The reason for reopening of assessment which was completed earlier u/s 143(3) was that the GP as per guidelines of Indian Newspaper Society should be 15% whereas the assessee has shown lesser. a. The basis for reopening is a guideline issued by INS, which has no impact on financial results of the assessee. b. As apparent from the facts that the AO raised the question of GP rate and was satisfied from the reply of the assessee and accepted the Book results, it can safely be assumed that the fact that a guideline is in existence and this is a routine practice of the trade that some of the trade discount is to be passed to the customer. This practice was accepted by the 8 ITA No. 303/Jodh/2024 Heera Lal Kasara, Udaipur. department and assessment has been framed accordingly. In spite of the fact that in this guideline passing of trade discount to customer is prohibited. c. Thus, this guideline was already in the knowledge of the department while framing Original assessment u/s 143(3) for AY 2009-10. d. The assessment for AY 2010-11 was also reopened on the same ground i.e. on the basis of guideline issued by INS. After all deliberation the books was accepted, method of accounting was accepted, transferring of some part of trade discount to customer was accepted and making addition only on lump sum basis. e. From above it clear that the impugned guideline was in existence and in the knowledge of the department while framing the original assessment u/s 143(3) for A.Y. 2009-10. It cannot be said that the assessee has not made true and full disclosure at the time of assessment. 5. The very basis of reopening of the completed assessment is a guideline issued by a NGO is not binding in nature on members of NGO or a third person. The INS is formed by the newspapers not by the persons engaged in advertising business. 6. The various associations are working in various walks of life, like Indian Medical Association fixed rates of Doctors for examine of patients but doctors are charging as per their own. Various fees have been recommended by the ICAI but the CAs are charging fees varyingly. The Income tax assessment cannot be made on the recommendation made by any association but is made on the basis of book results. 7. The assessee make all its purchases through cheque and 99% of its sale is through cheque. The AO has not able to point out even a single transaction which was out of books. 8. All the purchase has been confirmed by the AO u/s 133(6) some of the sales has also been confirmed u/s 133(6). But surprisingly he is not satisfied about the sanctity of Books of Accounts maintained by the assessee, Method of Accounting followed by the assessee. 9. The AO has not given any specific notice to the assessee for rejection of Books of accounts. Without pointing out any defect in Audited Books of account earlier accepted by the department, cannot be rejected by the AO while framing the assessment u/s 147. 10. That in spite of repeated request the AO was not able to site even a single comparable case on which his notice for calculating GP rate for 15% was based. Without citing any comparable case, the AOP cannot proceed of his own guess work and make additions. 9 ITA No. 303/Jodh/2024 Heera Lal Kasara, Udaipur. 11. No any private association or society or NGO can direct any person to charge certain commission and how to conduct their normal business. The association can only lay down certain norms which they think good for financial health of the business and not bind any person of general public or any person have accreditation. No any Society can bind by such guidelines which is ultra vires of sec. 4 of Competition Act, 2002. In the case of Kshitij Ranjan Vs. INS before the Competition Commission of India it was held that as per explanation (a) of section4 of the OP (INS) is in a position of strength as without accreditation of the INS no advertising agency can do business of giving advertisement in print media. Thus, by putting extraneous condition of personal security, the OP has imposed unfair and discriminatory condition in granting accreditation to the informant. Prima facie it appears to be a case of abuse of dominance as this alleged behavior of INS by limiting and restricting the market by denying market access to the informant is in contravention of the provision of section 4 of the Act. 12. That the AO has proceed to give questionnaire and asking for submission without passing a order on the objections raised by the assessee is void ab initio. 13. Section 5 of the IT Act reads as under : (1) subject to the provision of this Act the total income of any previous year of a person who is a resident includes all income from whatever source derived which – (a) is received or deemed to be received in India in such year by or on behalf of such person, or (b) accrues or arises or is deemed to accrue or arise tohim in India during such year: or “ From bare perusal of the provisions of the section it is inferred that to tax any amount as income of the year it should be accrue or arise during the previous year. By going through the books of accounts of the assessee your honour has not find that the assessee receives any amount accrues or arises to him which he has not accounted for in his Books of accounts. Thus, any information which have no impact on Books of account of the assessee cannot be treated as income of the assessee during the year. 14. Under the Income tax Act, it is the income which is chargeable to tax. If income has neither actually accrued nor received within the meaning of section 5 of the Act, such income cannot be charged to tax. Income which in law and in fact did not really accrue or arise or received in the previous year cannot be taxed. The computation provisions cannot enlarge or restrict the contents of taxable income. 10 ITA No. 303/Jodh/2024 Heera Lal Kasara, Udaipur. “ Income-tax is a levy on income No doubt, the Income-tax Act takes into account two points of time at which the liability to tax is attracted via the accrual of the income or its receipt, but the substance of the matter is the income. If income does not result at all, there cannot be a tax.” CIT v. ShoorjiVallabhdas& Co.[(1962) 46 ITR 144/[TS-1-SC-1962] 15. The AO cannot proceed to make an arbitrary addition and base his conclusion purely on guess work. He can do so only if he relates to some evidence or material on the record. The Courts have held if the profit shown by the assessee in his return is not accepted, it is for the taxing authorities to prove that the assessee made more profits. [International Forest Company vs. CIT (1975) 101 ITR 721 (J&K). 16. Additions made by rejecting the Books of Accounts, by alleging imagined manipulation without proving the same or without verifying the material available through field enquiry, and only based on own judgment, was held to be not justified. (ACIT vs. Ram Manohar Singh (2009) 178 Taxman 47 (Jabalpur) 17. Even where the account books are found unreliable, the assessment cannot be made arbitrarily and in order that an assessment can sustained, it must have nexus to the material on record. (CIT v. Mahesh Chand (1993) 199 ITR 247 (All.) 18. Where the Order passed within four weeks from date of rejection of assessee’s objections-Reassessment was held to be bad in law in the case of Bharat Jayantilal Patel v. UOI (2015) 378 ITR 596 (Bom.). 19. An assessment done purely by making a guess and without evidence is bad and to be set aside vide Dhakeshwari Cotton Mills Ltd. v/s. CIT (1954) 26 ITR 775 (SC). An Assessment made on mere conjecture, Surmise or suspicion or irrelevant and inadmissible evidence and material is bad and unsustainable in law. 20. Moreover, it is submitted that DEPARTMENT HAS ACCEPTED SAME METHOD OF ACCOUNTING AND SAME SYSTEM OF MAINTAINING OF BOOKS AND ACCEPTED THE BOOK RESULTS, the reassessment proceeding and addition made, in the total income of the assessee may be deleted. 11 ITA No. 303/Jodh/2024 Heera Lal Kasara, Udaipur. Looking to above facts and legal position it is prayed that addition made by the AO may be deleted.” The ld. AR of the assessee has filed details of Net Profit for the preceding and subsequent assessment years 2006-07 to 2010-11 as under :- Asstt. Year Net Profit Turnover NP % Assessed u/s Addition made Books accepted 2006-07 63343 27512091 0.23 143(3) 30000 Yes 2007-08 4564399 35105095 1.29 143(1) n.a. Yes 2008-09 529014 35474972 1.49 143(1) n.a. Yes 2009-10 567020 37008350 1.53 143(3) 148/143(3) 50000 4829046 Yes No 2010-11 1393020 52964549 2.63 143(3)/148 500000 Yes The ld. AR further submitted that the assessee has furnished all documents required by the AO on various dates in response to notices served by him. The assessee is not a member of INS but an ad agency which is associated with INS. The assessee has furnished copies of some ledger accounts of news papers and customers as desired by the AO. The assessee furnished copies of purchase bill, sale bill etc. as desired by the AO. The AO has also collected information u/s 133(6) from various newspapers. The assessee has also furnished copies of account in the books of customer namely M/s. Maharana Mewar Foundation and Maharana Mewar Public School. By going through Notice dated 23.12.2016 it is noted that the AO has not found any irregularity, discrepancy, and defect in method of accounting or mistake in the books of account of the assessee. 12 ITA No. 303/Jodh/2024 Heera Lal Kasara, Udaipur. The assessee has maintained its books of accounts as per previous years and get the accounts audited u/s 44AB of the IT Act and the AO has not raised any question or doubt in the notice dated 23.12.2016 about the method of maintenance and accuracy of Books of account of the assessee. 4. On the other hand, the ld. DR supported the order of the ld. CIT (A) and submitted that the same be sustained. Ground No. 1 relates to initiating the proceedings under section 148 of the IT Act, 1961 which is bad in law and bad on facts. The original assessment was made u/s 143(3) after detailed verification and simply on the basis of suspicion and surmises the proceedings had been initiated which is bad in law. 5. We have considered the rival submissions, perused the material on record and gone through the orders of the lower authorities. The ld. A/R of the assessee submitted that on being selected under CASS, the scrutiny assessment under section 143(3) of the IT Act, 1961 in this case was made by the AO after making an addition of Rs. 50,000/- on account of various expenses claimed by the assessee, vide assessment order dated 19.07.2011. Later on, the AO initiated the reassessment proceedings under section 147 of the IT Act after recording reasons duly approved by the PCIT vide his letter no. 3822 dated 22.03.2016 and accordingly issued notice u/s 148 of the IT Act on 22.03.2016 which was duly 13 ITA No. 303/Jodh/2024 Heera Lal Kasara, Udaipur. served on the assessee. In response, the assessee submitted that the return filed earlier may be treated as return filed in response to notice under section 148 of the Act. The ld. AR of the assessee objected the reopening of the assessment completed under section 143(3) by initiation of proceedings under section 147. The ld. AR submitted that the guidelines referred in the reasons for belief is just a guidelines issued by a NGO Indian Newspaper Society (for short INS) and do not have any financial bearing on the books of accounts of the assessee and consequently on the income of the assessee. The guidelines referred in the reasons were issued by the INS during the period 2008-09 were in the knowledge of the AO at the time of completing the scrutiny assessment under section 143(3) of the Act for the assessment year 2009-10 and now taking a different view on these guidelines is a case of change of opinion which is not permissible under section 147 of the Act. The ld. A/R submitted that the guidelines issued by INS has nothing to do with the income and financial statement of the assessee, as the income of the assessee is to be calculated as per books of accounts of the assessee and not as per the guidelines of newspaper society. The guidelines of a NGO are not binding on a third person. The ld. AR of the assessee submitted that no any private association or society or NGO can direct any person to charge certain commission and how to conduct their normal business. The association can only lay down certain norms which they think good for financial health of the business 14 ITA No. 303/Jodh/2024 Heera Lal Kasara, Udaipur. and not bind any person of general public or any person have accreditation. No any Society can bind by such guidelines which is ultra vires of section 4 of Competition Act, 2002. In the case of Kshitij Ranjan vs. INS before the Competition Commission of India, it was held that as per explanation (a) of section 4 of the OP (INS) is in a position of strength as without accreditation of the INS no advertising agency can do business of giving advertisement in print media. Thus, by putting extraneous condition of personal security, the OP has imposed unfair and discriminatory condition in granting a accreditation to the informant. Prima facie it appears to be a case of abuse of dominance as this alleged behavior of INS by limiting and restricting the market by denying market access to the informant is in contravention of the provision of section 4 of the Act. The assessee is not a member of INS but an ad agency which is associated with INS. The books of accounts of the assessee was duly audited and accepted by the department while completing the assessment under section 143(3) of the IT Act. The ld. AR submitted that the guidelines of newspaper society cannot be treated as tangible material having any financial and ultimately on the assessee and hence on the basis of this a completed assessment cannot be reopened under section 147 of the IT Act. It is necessary for the AO to first state that there is a failure to disclose fully and truly all material facts. In this regard, the ld. AR placed reliance on the judgment of Hon’ble Bombay High Court (Goa) in the case of Titanor Components Ltd. vs. 15 ITA No. 303/Jodh/2024 Heera Lal Kasara, Udaipur. ACIT (2011) 60 DTR 273 (Bom.) wherein it was held that power conferred by section 147 does not provide a fresh opportunity to the AO to correct an incorrect assessment made earlier unless the mistake in the assessment so made is the result of a failure of the assessee to fully and truly disclose all material facts necessary for assessment. Indeed, where the assessee has fully disclosed all the material facts, it is not open for the AO to reopen the assessment on the ground that there is a mistake in assessment. Moreover, it is necessary for the AO to first observe whether there is a failure to disclose fully and truly all material facts necessary for assessment and having observed that there is such a failure to proceed under section 147. It must follow that where the AO does not record such a failure he would not be entitled to proceed under section 147. In the instant case, the ld. A/R submitted that all the material facts necessary for assessment for that assessment year were fully and truly disclosed by the assessee at the time of original assessment completed under section 143(3), invoking of provisions of section 147 after the expiry of four years from the end of the relevant assessment year on the basis of guidelines of INS, an NGO, was not valid.He submits that along with the return, the profit and loss account, tax audit report were enclosed and the assessment was completed under Section 143(3) of the Act. 5.1 The ld. AR further submitted that the reopening of the assessee’s case by initiating proceedings under section 148 is bad inlaw and bad on facts for the 16 ITA No. 303/Jodh/2024 Heera Lal Kasara, Udaipur. reason that it is not in dispute that the assessment year involved is 2009-10. The last date of the said assessmentyear was March 31, 2010, and from that date if four years are counted, the period of four years expired on March 31, 2014. Thenotice issued is dated 22.03.2016 and duly served upon the assessee. Under these circumstances, thenotice is clearly beyond the period of four years. 5.2 The reasons recorded by the Assessing Officer nowhere state that there was failure on the part of the assessee to disclosefully and truly all material facts necessary for the assessment of that assessment year. It is needless to mention that the reasonsare required to be read as they were recorded by the Assessing Officer. No substitution or deletion is permissible. No addition can be made to those reasons. No inference can be allowed to be drawn based on reasons not recorded. It is for the Assessing Officer to disclose and open his mind through reasons recorded by him. He has to speak through his reasons. It is for the Assessing Officer to reach the conclusion as to whether there was failure on the part of the assessee to disclose fully and trulyall material facts necessary for his assessment for the concerned assessment year. It is for the Assessing Officer to form hisopinion. It is for him to put his opinion on record in black and white. The reasons recorded should be clear and unambiguous and should not suffer from any vagueness. The reasons recorded must disclose his mind. The reasons are the manifestation ofthe mind of the Assessing Officer. The reasons recorded should be self-explanatory 17 ITA No. 303/Jodh/2024 Heera Lal Kasara, Udaipur. and should not keep the assessee guessingfor the reasons. Reasons provide the link between conclusion and evidence. The reasons recorded must be based on evidence.The Assessing Officer, in the event of challenge to the reasons, must be able to justify the same based on material available onrecord. He must disclose in the reasons as to which fact or material was not disclosed by the assessee fully and truly necessary for assessment of that assessment year, so as to establish the vital link between the reasons and evidence. That vital link is thesafeguard against arbitrary reopening of the concluded assessment. The reasons recorded by the Assessing Officer cannot besupplemented by filing an affidavit or making an oral submission, otherwise, the reasons which were lacking in the material particulars would get supplemented, by the time the matter reaches the court, on the strength of the affidavit or oralsubmissions advanced. Reliance is placed on the judgment of Hon’ble Bombay High Court in the case of Hindustan Lever (2004) 268 ITR 332 (Bombay). 5.3 Having gone through the above facts and circumstances we found that the impugned notice itself is beyond the period of four years from the end of the assessment year 2009-10 and does not comply with the requirements of the proviso to Section 147 of the Act, the Assessing Officer had no jurisdiction to reopen the assessment proceedings which were concluded on the basis of assessment under Section 143(3) of the Act. On this short count alone the impugned notice is liable 18 ITA No. 303/Jodh/2024 Heera Lal Kasara, Udaipur. to be quashed. Thus, we find no merit in the orders of the lower authorities. Ground no. 1 of the assessee is allowed. 6. Since we have allowed the first ground of appeal, we do not find it necessary to go to the other grounds of appeal. 7. In the result, appeal of the assessee is allowed. Order pronounced under Rule 34(4) of the Income Tax (Appellate Tribunal) Rules, 1963 by placing the details on the notice board. Sd/- Sd/- (Dr. Mitha Lal Meena) (DR. S. Seethalakshmi) Accountant Member Judicial Member Dated 25/06/2025 Santosh- Sr. P.S Copy of the order forwarded to: (1)The Appellant (2) The Respondent (3) The CIT (4) The CIT (Appeals) (5) The DR, I.T.A.T. True Copy By order "