Shri Mahamadsalim G. Shaikh, Valsad V. Income Tax Officer, Ward-5, Valsad

ITA 109/SRT/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 7787 (ITAT-SURAT)
• Duration Of Justice: 3 year(s) 6 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 20-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANUPAMA SINGLA
• Keywords: Reopening of assessment; Wrong claim; Difference of opinion; Reason to believe; Change of opinion; Reassessment proceedings; TDS
• Section: 143(3); 133(6); 143(2); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JM & DR. A. L. SAINI, AM ./ITA NO.109/SRT/2018 ( [ [ / ASSESSMENT YEAR: (2012-13) (VIRTUAL COURT HEARING) SHRI MAHAMADSALIM G. SHAIKH, 11, GARIBNAWAB HOUSING SOCIETY, POLICE HEADQUARTER ROAD,ABRAMA, VALSAD 396001. VS. THE INCOME TAX OFFICER, WARD-5, SURAT. ./ ./ PAN/GIR NO.: ATZPS 6792 H (ASSESSEE) (RESPONDENT) ASSESSEE BY : SHRI RAJESH M.UPADHYAY - CA RESPONDENT BY : MS. ANUPAMA SINGLA SR.DR / DATE OF HEARING : 03/08/2021 /DATE OF PRONOUNCEMENT : 23/08/2021 / O R D E R PER DR. A. L. SAINI, ACCOUNTANT MEMBER: CAPTIONED APPEAL FILED BY THE ASSESSEE, PERTAINING TO ASSESSMENT YEAR 2012- 13, IS DIRECTED AGAINST THE ORDER PASSED BY THE LD.COMMISSIONER OF INCOME TAX (APPEALS) VALSAD, DATED 15.12.2017, WHICH IN TURN ARISES OUT OF AN ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER, UNDER SECTION 143(3) R.W.S 147 OF THE INCOME TAX ACT, 1961, ( HEREINAFTER REFERRED TO AS THE ACT), DATED 30.11.2016. 2. GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE AS FOLLOWS: [1] LD. CIT[A], VALSAD HAS ERRED IN LAW AND ON FACTS TO UPHELD ACTION OF THE A.O. FOR REOPENING OF ASSESSMENT U/S 147 AND ISSUE OF NOTICE U/S 148 ON THE BASIS OF DIRECTION OF DCIT, TDS, BARODA. [2] LD.CIT[A], VALSAD HAS ERRED IN LAW AND ON FACT TO SUSTAIN ADDITION OF RS.74,550/- BEING 15% OF REIMBURSEMENT OF LTC OVERLOOKING THE FACT THAT THE REIMBURSEMENT WAS MADE FOR APPELLANTS TOUR IN INDIA AND NOTHING HAS BEEN PAID BY THE EMPLOYER BANK TO THE EMPLOYER IN RESPECT OF FOREIGN TOUR. 3. WE ADVERT TO THE RELEVANT FACTS. THE ASSESSEE, BEFORE US IS AN INDIVIDUAL. THE ASSESSEE IS AN EMPLOYEE OF THE BANK OF BARODA. THE ASSESSEE HAD FILED HIS RETURN OF PAGE | 2 ITA NO.109/SRT/2018 FOR A.Y. 2012-13 SHRI MAHAMADSALIM G.SHAIKH, VALSAD INCOME ON 30,07.2012, DECLARING TOTAL INCOME AT RS.5,68,740/- AFTER CLAIMING DEDUCTION UNDER CHAPTER VI A OF THE INCOME TAX ACT. THEREAFTER, ASSESSEE`S CASE WAS REOPENED UNDER SECTION 147 OF THE ACT AND NOTICE U/S 148 OF THE ACT WAS ISSUED ON 30.03.2016 AND DULY SERVED UPON THE ASSESSEE ON 31.03.2016. THE ASSESSING OFFICER HAS REOPENED THE ASSESSMENT BASED ON THE INFORMATION FROM THE DCIT(TDS), BARODA REGARDING WRONG CLAIM OF LEAVE TRAVEL ALLOWANCE BY ASSESSEE. 4. IN RESPONSE TO NOTICE UNDER SECTION 148 OF THE ACT, THE ASSESSEE, VIDE HIS LETTER DATED 29.04.2016, HAS STATED BEFORE ASSESSING OFFICER THAT THE RETURN FILED ON 30.07.2012 MAY BE TREATED AS RETURN IN RESPONSE TO NOTICE U/S148 OF THE ACT. THE ASSESSEE HAS ALSO REQUESTED REASON FOR REOPENING AND THE SAME HAS BEEN PROVIDED TO THE ASSESSEE, VIDE ASSESSING OFFICER`S LETTER DATED 15.06.2016. NOTICE U/S 143(2) OF THE ACT DATED 16.08.2016 WAS DULY ISSUED AND SERVED UPON THE ASSESSEE BY SPEED POST. 5. IN RESPONSE TO THE NOTICE, THE ASSESSEE HAS FURNISHED WRITTEN SUBMISSIONS, DATED 13.07.2016, WHICH IS REPRODUCED BELOW: 1.I AM EMPLOYEE OF BANK OF BARODA AND NOT SBI SO MY CASE CANNOT BE CONSIDERED WITH THAT OF SBI EMPLOYEES AS MENTIONED IN YOUR LETTER UNDER REFERENCE GIVING REFERENCE NO.BRD/ DCIT/ REOPEN/ SBI/ 2014-15 DTD. 26.03.2015. 2.I HAVE NOT CLAIMED LFC/LFC/LTA FOR MY TOUR TO OVERSEAS. THE AMOUNT OF RS. 496325/ IS CLAIMED FOR MY TOUR TO INDIAN TERRITORY AS UNDER: VADODARA MUMBAI VAAODARA. RS.25568.00 (TO & FRO) PER PERSON) MUM BA I CHENNAI MUMBAI RS.33030.00 -DO- CHENNAI PORT BLAIR CHENNAI RS.40962.00 -DO- FOR 5 TICKETS RS.4,97,800.00 3. AS PER SECTION 10(5) IN THE CASE OF AN INDIVIDUAL, THE VALUE OF ANY TRAVEL CONCESSION OF ASSISTANCE RECEIVED BY TO HIM FROM HIS EMPLOYER FOR HIMSELF AND HIS FAMILY IN CONNECTION WITH HIS PROCEEDING TO LEAVE TO ANY PLACE IN INDIA IS EXEMPT FROM, INCOME-TAX. 6. THE ASSESSING OFFICER HAS REJECTED THE CONTENTION OF THE ASSESSEE AND NOTED THAT ASSESSEE COULD NOT GIVE BIFURCATION OF THE FARE INCURRED TOWARDS JOURNEY PERFORMED OUTSIDE INDIA AND WITHIN INDIA, THEREFORE, A LETTER U/S 133(6) WAS ISSUED TO PAGE | 3 ITA NO.109/SRT/2018 FOR A.Y. 2012-13 SHRI MAHAMADSALIM G.SHAIKH, VALSAD THE EMPLOYER OF THE ASSESSEE I.E. BANK OF BARODA, ON 13.07.2006 ASKING ALL DETAILS PERTAINING TO HIS REIMBURSEMENT OF LTC CLAIM. THOUGHT THE BANK PROVIDED SOME DETAILS, HOWEVER, NO BIFURCATION HAS BEEN PROVIDED TO THE AO. THEREAFTER, ASSESSING OFFICER ISSUED NOTICE UNDER SECTION 133(6) OF THE ACT TO RAM KRISHNA TRAVELS PVT.LTD., TRAVEL AGENT, BARODA ON 03.08.2016, REQUESTING THEM TO GIVE BIFURCATION. THE TRAVEL AGENT HAS PROVIDED ITINERARY OF THE ASSESSEE WITH REGARD TO HIS TRAVEL ALONG WITH FAMILY MEMBERS INSIDE INDIA AS WELL AS OUTSIDE INDIA, FROM 12.11.2011 TO 24.11.2011. THEREAFTER A LETTER U/S 133(6) WAS ISSUED TO THE JET AIR WAYS ON 06.09.2016 ASKING THEM TO PROVIDE THE COPIES OF TICKETS ISSUED TO THE ASSESSEE AND HIS FAMILY MEMBERS. THEY WERE ALSO ASKED TO PROVIDE THE BIFURCATIONS OF AIR FARE INCURRED OUTSIDE INDIA AS WELL AS INSIDE INDIA. THE JET AIR WAYS VIDE THEIR LETTER DATED 16.09.2016 PROVIDED THE COPY OF TICKETS AND ITINERARY TO THE ASSESSING OFFICER. FROM THE TICKETS WAS APPARENT THAT THEY HAD CHARGED TOTAL AIR FARE OF RS.4,96,325/-. HOWEVER, NO BIFURCATION WAS PROVIDED AS REQUESTED BY ASSESSING OFFICER. BASED ON THE ABOVE FACTS, THE ASSESSING OFFICER WAS OF THE VIEW THAT THE ASSESSEE HAD PERFORMED FOREIGN TOUR THROUGH CIRCUITOUS ROUT AND REIMBURSED THE LTC IN WHOLE. THIS FACT SHOULD BE READ WITH THE CONDITIONS LAID DOWN IN SECTION 10(5) OF THE I.T. ACT. FROM THE READING OF PROVISIONS OF SECTION 10(5) OF THE I.T.ACT, IT IS VERY CLEAR THAT ASSESSEE IS ELIGIBLE FOR LTC/LTA EXEMPTION ONLY IN RESPECT OF JOURNEY PERFORMED WITHIN INDIA. THEREFORE TAKING INTO ACCOUNT, THE PROVISIONS OF THE ACT, THE ELEMENT OF EXPENDITURE INCURRED TOWARDS JOURNEY PERFORMED OUT OF INDIA I.E. FROM CHENNAI TO SINGAPORE AND BANGKOK TO MUMBAI CANNOT BE NEGLECTED. THE ASSESSEE'S CLAIM THAT TO MARKET COMPANY`S PRODUCT, THE COMPANY HAD OFFERED COMPLIMENTARY TOUR IS NOT ACCEPTABLE. THE TOUR OPERATOR AS WELL AS THE JET AIRWAYS ANYWHERE IN THE SUBMISSION MADE BY THEM HAD NOT MENTIONED THAT THEY ARE OFFERING SUCH 'COMPLIMENTARY TOUR' TO THEIR CUSTOMERS. DURING THE ASSESSMENT PROCEEDINGS, SUFFICIENT OPPORTUNITIES HAVE BEEN GIVEN TO THE ASSESSEE. EVEN THOUGH IN RESPONSE TO SHOW CAUSE NOTICE, THE ASSESSEE FAILED TO GIVEN BIFURCATION OF THE AIRFARE INCURRED TOWARDS FOREIGN JOURNEY. IN VIEW OF ABOVE, THE ASSESSING OFFICER HAS DISALLOWED 15% OF ABOVE SAID EXPENSES OF RS.4,96,325/-, WHICH WAS WORKED OUT AT RS.74,450/-(15% OF RS.4,96,325). PAGE | 4 ITA NO.109/SRT/2018 FOR A.Y. 2012-13 SHRI MAHAMADSALIM G.SHAIKH, VALSAD 7. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD.CIT(A) WHO HAS CONFIRMED THE ACTION OF THE ASSESSING OFFICER. THE LD.CIT(A) HELD THAT REOPENING OF ASSESSMENT UNDER SECTION 147 OF THE ACT WAS VALID. THE LD.CIT(A) ALSO DISMISSED THE APPEAL OF THE ASSESSEE ON MERITS. 8. AGGRIEVED BY THE ORDER OF THE LD.CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US. 9. THE SHRI RAJESH M. UPADHYAY, LD.COUNSEL FOR THE ASSESSEE, VEHEMENTLY ARGUED THAT REASONS RECORDED BY THE ASSESSING OFFICER ARE BAD IN LAW. THE LD.COUNSEL TOOK US THROUGH PAGE NO.10 OF THE PAPER BOOK WHEREIN THE REASONS RECORDED BY THE ASSESSING OFFICER ARE STATED. HE STATED THAT REASONS RECORDED BY THE ASSESSING OFFICER ARE NOT IN THE CONTEXT OF THE ASSESSEE, THEREAFTER REASSESSMENT PROCEEDINGS MAY BE QUASHED. 10. ON THE OTHER HAND, THE LD. DR FOR THE REVENUE HAS PRIMARILY REITERATED THE STAND TAKEN BY THE ASSESSING OFFICER, WHICH WE HAVE ALREADY NOTED IN OUR EARLIER PARA AND IS NOT BEING REPEATED FOR THE SAKE OF BREVITY. 11. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE SUBMISSION PUT FORTH ON BEHALF OF THE ASSESSEE ALONG WITH THE DOCUMENTS FURNISHED AND THE CASE LAWS RELIED UPON, AND PERUSED THE FACT OF THE CASE INCLUDING THE FINDINGS OF THE LD CIT(A) AND OTHER MATERIALS BROUGHT ON RECORD. WE NOTE THAT COPY OF THE REASONS RECORDED BY THE ASSESSING OFFICER, WAS SUPPLIED TO THE ASSESSEE DURING THE ASSESSMENT STAGE. HOWEVER, IN RESPONSE TO THIS, THE ASSESSEE HAS SUBMITTED HIS REPLY DURING THE ASSESSMENT STAGE BEFORE THE ASSESSING OFFICER WHICH IS PLACED AT PAPER BOOK PAGE NO.11 AND WHICH IS REPRODUCE BELOW: THIS HAS REFERENCE TO YOUR LETTER NO. ITO/WD-5/VLS/REASON U/S 148/2016-17 DTD. 15.06.2016.IN THIS CONNECTION, I HAVE TO ADVISE AS UNDER: 1. I AM EMPLOYEE OF BANK OF BARODA AND NOT SBI SO MY CASE CANNOT BE CONSIDERED WITH THAT OF SBI EMPLOYEES AS MENTIONED IN YOUR LETTER UNDER REFERENCE GIVING REFERENCE NO. BRD/DCIT/REOPEN/SBI/2014-15 DTD. 26.03.2015. PAGE | 5 ITA NO.109/SRT/2018 FOR A.Y. 2012-13 SHRI MAHAMADSALIM G.SHAIKH, VALSAD 2.I HAVE NOT CLAIMED LFC/LFC/LTA FOR MY TOUR TO OVERSEAS. THE AMOUNT OF RS.496325/00 IS CLAIMED FOR MY TOUR TO INDIAN TERRITORY AS UNDER: VADODARA MUMBAI VADODARA RS.25568.00 (TO & FRO ) PER PERSON) MUMBAI CHENNAI MUMBAI RS.33030.00 - DO - CHENNAI PORT BLAIR CHENNAI RS.40962.00 - DO ----------------------------------------- RS. 99560.00 X 5 FOR 5 TICKETS RS.497800.00 3.AS PER SECTION 10(5) IN THE CASE OF AN INDIVIDUAL, THE VALUE OF ANY TRAVEL CONCESSION OR ASSISTANCE RECEIVED BY TO HIM FROM HIS EMPLOYER FOR HIMSELF AND HIS FAMILY IN CONNECTION WITH HIS PROCEEDING TO LEAVE TO ANY PLACE IN INDIA IS EXEMPT FROM INCOME-TAX. AS PER SERVICE REGULATION OF OFFICERS OF BANK OF BARODA, THE REIMBURSEMENT/CONCESSION FOR TRAVEL IN INDIA IS PERMISSIBLE AND ACCORDINGLY MY EMPLOYER HAS REIMBURSED ME THE AMOUNT FOR TRAVEL IN INDIA ONLY AS PER MY ENTITLEMENT WITH MY FAMILY MEMBERS, WHICH TOTALLY EXEMPTED. I HAVE ALREADY PROVIDED TICKETS AND OTHER TRAVELLING PROOF FOR MY TRAVEL BASED ON WHICH MY EMPLOYER BOB HAS GIVEN TRAVEL CONCESSION. I HAVE NOT KEPT COPIES OF SUCH TICKETS. SINCE THE ISSUE IS MORE THAN 6 YEARS OLD, IT IS DIFFICULT TO OBTAIN SUCH TICKETS FROM EMPLOYER AS I WAS POSTED AT BARODA AT THAT TIME AND AT PRESENT I AM POSTED AT ULSAR, EVENTHOUGH I AM TRYING TO GET COPIES OF TICKETS FROM MY EMPLOYER. TO THIS EFFECT I AM READY TO SUBMIT AFFIDAVIT CONFIRMING THAT I HAVE NOT CLAIMED ANY EXPENDITURE INCURRED FOR MY FOREIGN TRIP. BANK IS NOT REIMBURSING EXPENDITURE INCURRED FOR FOREIGN TRAVEL AND IS REIMBURSING AMOUNT FOR INLAND TRAVEL ONLY, IN SUPPORT OF WHICH I AM SUBMITTING BANK`S CIRCULAR. THUS I HAVE REASON TO BELIEVE THAT THERE IS NO CASE OF ESCAPING ANY INCOME FROM ASSESSMENT AND I REQUEST YOU CONSIDER RETURNED FILED ON 23.06.2012 IN ORDER. 12. WE NOTE THAT THE ASSESSING OFFICER DID NOT DEAL WITH THE OBJECTIONS RAISED BY THE ASSESSEE AGAINST REOPENING OF ASSESSMENT I.E. THE ASSESSING OFFICER DID NOT PASS A SPEAKING ORDER TO DISPOSE THE ASSESSEES OBJECTIONS AGAINST THE REOPENING. ON RECEIPT OF REASONS, THE ASSESSEE IS ENTITLED TO FILE OBJECTIONS TO ISSUANCE OF NOTICE AND THE ASSESSING OFFICER IS BOUND TO DISPOSE OF THE SAME BY PASSING A SPEAKING ORDER, AS HELD BY THE HON'BLE SUPREME COURT IN THE CASE OF GKN DRIVESHAFTS (INDIA) LTD. V. ITO & OTHERS [2003] 259 ITR 19 (SC). SINCE THE ASSESSING OFFICER DID NOT DISPOSE OF THE OBJECTIONS RAISED BY THE ASSESSEE BY PASSING A SPEAKING ORDER, THEREFORE, ON THIS COUNT, THE REASSESSMENT PROCEEDINGS INITIATED BY THE ASSESSING OFFICER SHOULD BE QUASHED. 13. NOW, WE SHOULD ANALYZE THE REASONS RECORDED BY THE ASSESSING OFFICER, WHICH IS GIVE AT PAPER BOOK PAGE NO.10, AND THE SAME IS REPRODUCED BELOW: PAGE | 6 ITA NO.109/SRT/2018 FOR A.Y. 2012-13 SHRI MAHAMADSALIM G.SHAIKH, VALSAD IN THIS CASE, THE ASSESSE HAS FILED RETURN OF INCOME FOR A.Y. 2012-13 ON 23/06/2012 IN ITR- 1(SAHAJ) DECLARING TOTAL INCOME AT RS.7,54,734/-. AS PER INFORMATION RECEIVED FROM DCIT, TDS, BARODA, VIDE HIS LETTER NO.BRD/DCIT/REOPEN/SBI/2014-15, DATED 26/03/2015, THE EMPLOYEES OF SBI CLAIMED LTC/LFC/LTA AS EXEMPT U/S10(5) EVEN ON THE OVERSEAS TRAVEL. FROM THE READING OF PROVISIONS OF SEC.10(5) OF THE I.T.ACT IT IS VERY CLEAR THAT ASSESSEE IS ELIGIBLE FOR LTC/LFC ON THAT PART OF ALLOWANCE WHICH HE INCURRED ON TRAVEL TO ANY PLACES IN INDIA. SINCE THE ASSESSEE HAS CLAIMED ENTIRE LT CONCESSION AS EXEMPT U/S 10(5), I HAVE REASON TO BELIEVE THAT THE INCOME TO THE EXTENT OF 4,96,325/- HAS ESCAPED ASSESSMENT. 14. WE NOTE THAT THE REASONS RECORDED BY THE ASSESSING OFFICER ARE BAD IN LAW AS WE HAVE NOTED THAT IN THE FIRST TWO LINES OF THE ABOVE REASONS RECORDED, IT IS MENTIONED AS FOLLOWS IN THIS CASE, THE ASSESSE HAS FILED RETURN OF INCOME FOR A.Y. 2012-13 ON 23/06/2012 IN ITR-1(SAHAJ) DECLARING TOTAL INCOME AT RS.7,54,734/- . WE NOTE THAT IN THE ASSESSMENT ORDER, WHICH IS PASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3) R.W.S 147 OF THE INCOME TAX ACT, 1961, IN FIRST PARA OF ASSESSMENT ORDER, IT HAS BEEN MENTIONED AS FOLLOWS IN THIS CASE THE ASSESSEE HAD FILED HIS RETURN OF INCOME ON 30.07.2012 DECLARING TOTAL INCOME AT RS.5,68,740/- . THEREFORE, WE NOTE THAT IN THE REASONS RECORDED, THE TOTAL INCOME IS MENTIONED AT RS.7,54,734/- , WHEREAS IN THE ASSESSMENT ORDER, THE TOTAL INCOME IS MENTIONED AT RS.5,68,740/- , THUS REASONS RECORDED BY ASSESSING OFFICER WOULD FAIL, AS THESE REASONS ARE NOT RELATED TO THE ASSESSEE. MOREOVER, WE NOTE THAT REASONS RECORDED BY ASSESSING OFFICER STATES THE DATE AS 23.06.2012 , WHEREAS IN ASSESSMENT ORDER THE DATE IS STATED AS 30.07.2012 , THEREFORE, THESE REASONS WERE NOT RECORDED IN THE CONTEXT OF THE ASSESSEE AND HENCE REASONS RECORDED BY THE ASSESSING OFFICER WOULD NOT SURVIVE. WE NOTE THAT REASONS RECORDED BY THE ASSESSING OFFICER DOES NOT SPELL OUT THE BELIEF OF THE ASSESSING OFFICER. 15. WE NOTE THAT REASONS MUST HAVE A LIVE LINK WITH THE FORMATION OF THE BELIEF. THIS IS SUPPORTED BY CIRCULAR NO.549 DATED 31.10.1989 WHICH CLARIFIED THAT THE WORDS REASON TO BELIEVE DID NOT MEAN A CHANGE OF OPINION. THE PAGE | 7 ITA NO.109/SRT/2018 FOR A.Y. 2012-13 SHRI MAHAMADSALIM G.SHAIKH, VALSAD HONBLE SUPREME COURT IN ITO VS LAKHMANI MEWAL DAS [1976 ]103 ITR 437 HAS LUCIDLY EXPLAINED THE POWER OF ASSESSING OFFICER TO BRING TO TAX INCOME ESCAPING ASSESSMENT U/S 147 OF THE ACT. THE HONBLE COURT FIRST HELD THAT THE SECTION PROVIDES THAT THERE MUST EXIST REASONS TO BELIEVE AND NOT REASONS TO SUSPECT. THE FOLLOWING WERE THE RELEVANT OBSERVATIONS: THE FACT THAT THE WORDS 'DEFINITE INFORMATION' WHICH WERE THERE IN SECTION 34 OF THE ACT OF 1922, AT ONE TIME BEFORE ITS AMENDMENT IN 1948, ARE NOT THERE IN SECTION 147 OF THE ACT OF 1961, WOULD NOT LEAD TO THE CONCLUSION THAT ACTION CAN NOW BE TAKEN FOR REOPENING ASSESSMENT EVEN IF THE INFORMATION IS WHOLLY VAGUE, INDEFINITE, FAR-FETCHED AND REMOTE. THE REASON FOR THE FORMATION OF THE BELIEF MUST BE HELD IN GOOD FAITH AND SHOULD NOT BE A MERE PRETENCE. THE POWERS OF THE INCOME-TAX OFFICER TO REOPEN ASSESSMENT, THOUGH WIDE, ARE NOT PLENARY. THE WORDS OF THE STATUTE ARE 'REASON TO BELIEVE' AND NOT 'REASON TO SUSPECT'. THE REOPENING OF THE ASSESSMENT AFTER THE LAPSE OF MANY YEARS IS A SERIOUS MATTER. THE ACT, NO DOUBT, CONTEMPLATES THE REOPENING OF THE ASSESSMENT IF GROUNDS EXIST FOR BELIEVING THAT INCOME OF THE ASSESSEE HAS ESCAPED ASSESSMENT. THE UNDERLYING REASON FOR THAT IS THAT INSTANCES OF CONCEALED INCOME OR OTHER INCOME ESCAPING ASSESSMENT IN A LARGE NUMBER OF CASES COME TO THE NOTICE OF THE INCOME-TAX AUTHORITIES AFTER THE ASSESSMENT HAS BEEN COMPLETED. THE PURPOSE BEHIND THE RELEVANT PROVISIONS IMPOSING CONDITION PRECEDENT FOR INITIATING REASSESSMENT PROCEEDINGS IS TO ENSURE FINALITY OF PROCEEDINGS. THE ACT ALSO PROVIDES THAT SUCH REASON MUST BE RECORDED IN WRITING BEFORE ISSUE OF NOTICE OF REASSESSMENT SO AS TO JUDGE THE EXISTENCE OF SUCH BELIEF BEFORE INITIATING REASSESSMENT PROCEEDINGS BY ISSUE OF NOTICE U/S 148 OF THE ACT. THE ABOVE REQUIREMENTS ARE MEANT TO ENSURE THAT POWERS TO INITIATE REASSESSMENT PROCEEDINGS ARE NOT EXERCISED IN AN ARBITRARY MANNER. THEREFORE, IT IS REQUIRED THAT WHOLE OF THE PROCESS OF TAXATION MUST FOLLOW THE PROCEDURES WHICH ARE VALID UNDER THE LAW AND MUST ADHERE TO LAW I.E. SUBSTANTIVE ONE AS WELL AS PROCEDURAL ONE TOO. THEREFORE, IN OTHER WORDS IT IS PROVIDED IN THE CONSTITUTION OF INDIA THAT EVERY STEP SHOULD BE TAKEN TO ENSURE THAT LEVY AND COLLECTION OF THE TAXES IS STRICTLY IN ACCORDANCE WITH LAW NOT ONLY SUBSTANTIVE ONE BUT THE PROCEDURAL LAW, AS WELL. 16. WE NOTE THAT IN ASSESSEE`S CASE THE INFORMATION COLLECTED BY THE ASSESSING OFFICER TO REOPEN THE ASSESSMENT ARE WHOLLY VAGUE, INDEFINITE, FAR-FETCHED, THEREFORE, PAGE | 8 ITA NO.109/SRT/2018 FOR A.Y. 2012-13 SHRI MAHAMADSALIM G.SHAIKH, VALSAD WE HOLD THAT THESE REASONS WERE NOT RECORDED IN THE CONTEXT OF THE ASSESSEE UNDER CONSIDERATION. HENCE, BASED ON THE ABOVE FINDINGS, THE REASSESSMENT PROCEEDINGS SHALL NOT BE SUSTAINABLE IN THE EYES OF LAW. THEREFORE, CONSIDERING THE ENTIRETY OF FACTS AND CIRCUMSTANCES OF THE CASE, AS EXPLAINED ABOVE, AND THE MATERIAL ON RECORD, WE ARE UNABLE TO UPHOLD THE STAND OF THE ASSESSING OFFICER FOR REOPENING THE ASSESSMENT U/S 147/148 OF THE ACT, THEREFORE, WE CANCEL THE REASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 147 OF THE ACT. 17. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER IS PRONOUNCED ON 23/08/2021 BY PLACING RESULT ON NOTICE BOARD. SD/- SD/- (PAWAN SINGH) (DR. A.L. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER SURAT / / DATE: 23/08/2021 / SGR COPY OF THE ORDER FORWARDED TO 1. THE ASSESSEE 2. THE RESPONDENT 3. THE CIT(A) 4. PR.CIT 5. DR/AR, ITAT, SURAT 6. GUARD FILE BY ORDER // TRUE COPY // / / TRUE COPY / / ASSISTANT REGISTRAR/SR. PS/PS ITAT, SURAT