Shri Dharmendra Arjunbhai Desai, Gandhinagar V. The ITO, Ward-1, Gandhinagar

ITA 1031/AHD/2018

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 8009 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 6 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 24-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S.S. SHUKLA
• Assessee Lawyers: MEHUL K. PATEL
• Keywords: Reopening of assessment; Reason to believe
• Section: 147; 148; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD (through web-based video conferencing platform) BEFORESHRI RAJPAL YADAV, VICE PRESIDENT ITA No. 1031/Ahd/2018 Assessment Year : 2009-10 Shri Dharmendra Arjunbhai Desai, 11/75, MIGH, Anandnagar, Sector-27, Gandhinagar-382027 PAN : AGKPD 7038 B Vs. Income Tax Officer, Ward-1, Gandhinagar अपीलाथ牸 अपीलाथ牸अपीलाथ牸 अपीलाथ牸/ (Appellant) 灹त् 灹त् 灹त् 灹त् यथ牸 यथ牸यथ牸 यथ牸/ (Respondent) Assessee by : Shri Mehul K. Patel, Advocate Revenue by : Shri S.S. Shukla, Sr DR सुनवाई सुनवाईसुनवाई सुनवाई क琉 क琉क琉 क琉 तारीख तारीखतारीख तारीख/Date of Hearing : 22/11/2021 घोषणा क琉 तारीख /Date of Pronouncement: 23/11/2021 आदेश आदेशआदेश आदेश/O R D E R The assessee is in appeal before the Tribunal against the order of learned Commissioner of Income-Tax (Appeals), Gandhinagar, Ahmedabad dated 13.02.2018 passed for Assessment Year 2009-10. In the first ground of appeal, the assessee has challenged the re-opening of assessment under Section 147 of the Income-tax Act, 1961 (“the Act” in short) by issuance of notice under Section 148 of the Act. 2. The brief facts of the case are that the assessee has filed his return of income on 22.07.2009 declaring total income at Rs.1,59,880/-. The Assessing Officer has issued notice under Section 148 of the Act on 25.06.2015, after recording the following reasons:- “ 1 Name : Shri Dharmendra Arjunbhai Desai 2 Address : 11/75, MIGH, Anandnagar, Sector-27, Gandhinagar 3 Permanent Account Number : AGKPD 7038 B 4 AY : 2009-10 SMC-ITA No. 1031/Ahd/2018 ShriDharmendraArjunbhai Desai Vs. ITO For AY: 2009-10 2 REASONS RECORDED FOR ISSUE OF NOTICE U/S 148 OF THE I.T. ACT, 1961 As per data available with this office, the assessee, ShriDharmendraArjunbhai Desai has entered into transactions in different segments through Amrapali Finance & Capital Services Limited. It is seen that assessee hold code No.D520 during the FY 2008-09 and Client Code Modifications had been made 40 times. To analyze the data received in respect of Client Code Modifications carried out and also to verify capital gain out of share, demat transactions, any other such financial transactions, activities etc.. Therefore, I have reason to believe that the income chargeable to tax had escaped assessment to that extent, for AY 2009-10, within the meaning of Section 147 of the Act. Hence, in my opinion, this is a fit case for re-opening of assessment u/s 147 of the I.T. Act, 1961. Date : 20.01.2015 Sd/-. (G.G. THAKER) INCOME-TAX OFFICER, WARD-1, GANDHINAGAR” 3. The Assessing Officer thereafter passed reassessment order under Section 143(3) r.w.s. 147 of the Act on 23.03.2016. He determined the taxable income of the assessee at Rs.44,46,724/-. According to him, the assessee has booked the artificial loss through the Client Code Modifications. In other words, during the year, the assessee had transacted into the shares vide which client codes were switched over on many a times. On appeal, the assessee challenged the reopening, but the learned CIT(A) rejected this ground by just observing that no arguments were advanced by the assessee on this issue. 4. The learned Counsel for the assessee submitted that the perusal of the reasons would not show which income has escaped assessment. The learned Assessing Officer intended to reopen the assessment only for verification. In support of his contention, he relied upon the judgment of the Hon’ble Gujarat High Court in the case of Pri. CIT vs. Manzil SMC-ITA No. 1031/Ahd/2018 ShriDharmendraArjunbhai Desai Vs. ITO For AY: 2009-10 3 Dineshkumar Shah, reported in [2018] 406 ITR 326 (Guj.) and submitted that Hon’ble Gujarat High Court did not approve the case of the Revenue for permitting it to re-open the assessment for the purpose of conducting an enquiry or verification. Similarly, he relied upon the judgment of the Hon’ble jurisdictional High Court in the case of Krupesh G. Thakkar vs. DCIT, reported in [2017] 77 taxmann.com 293 (Guj.). He also put reliance upon one order authored by me in the case of Shri Ashokkumar C. Shah Vs. ITO in ITA No. 1143/Ahd/2015, decided on 15.01.2016. 5. On the other hand, learned Departmental Representative contended that the perusal of the reasons would indicate that the Assessing Officer has identified three things; i.e. (i) the charge against the assessee is that he had modified the client code; (ii) the learned Assessing Officer has identified the client code also and (iii) he has every material available for harboring the belief that the income has escaped assessment. 6. I have duly considered the rival contentions and gone through the record carefully. Section 147 of the Income-Tax Act 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..............”. A perusal of the above opening lines would indicate that there should be a live link between the material available vis-à-vis formation of belief exhibiting the escapement of income. In the present case, the reasons would show that the Assessing Officer has nowhere formed his belief; rather wants to analyze the data for verification. This is not permissible in a re-assessment under Section 147 of the Act. Therefore, respectfully following the judgments of Hon’ble SMC-ITA No. 1031/Ahd/2018 ShriDharmendraArjunbhai Desai Vs. ITO For AY: 2009-10 4 jurisdictional High Court cited supra by the learned Counsel for the assessee, I allow this ground of appeal and quash the re-assessment order. 7. In the result, the appeal of the assessee is allowed. Order pronounced in the Court on 23 rd November, 2021 at Ahmedabad. Sd/- (RAJPAL YADAV) VICE PRESIDENT Ahmedabad; Dated 23/11/2021 *Bt आदेश आदेशआदेश आदेश क琉 क琉क琉 क琉 灹ितिलिप 灹ितिलिप灹ितिलिप 灹ितिलिप अ灡ेिषत अ灡ेिषतअ灡ेिषत अ灡ेिषत/Copy of the Order forwarded to : 1. अपीलाथ牸 / The Appellant 2. 灹瀄यथ牸 / The Respondent. 3. संबंिधत आयकर आयु猴 / Concerned CIT 4. आयकर आयु猴(अपील) / The CIT(A) 5. िवभागीय 灹ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड榁 फाईल / Guard file. आ आआ आदेशानुसार देशानुसारदेशानुसार देशानुसार/BY ORDER, TRUE COPY उप उपउप उप/सहायक सहायकसहायक सहायक पंजीकार पंजीकारपंजीकार पंजीकार (Dy./Asstt.Registrar) आयकर आयकरआयकर आयकर अपीलीय अपीलीयअपीलीय अपीलीय अिधकरण अिधकरणअिधकरण अिधकरण, अहमदाबाद अहमदाबादअहमदाबाद अहमदाबाद / ITAT, Ahmedabad 1. Date of dictation- .....22.11.2021.......... 2. Date on which the typed draft is placed before the Dictating Member ....22.11.2021..... Other member ................... 3. Date on which the approved draft comes to the Sr.P.S./P.S. - ........... 4. Date on which the fair order is placed before the Dictating Member for Pronouncement ... 5. Date on which the file goes to the Bench Clerk..................... 6. Date on which the file goes to the Head Clerk...................................... 7. The date on which the file goes to the Assistant Registrar for signature on the order.......................... 8. Date of Despatch of the Order..................