, SMC , IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH: K OLKATA ( . . , ) [BEFORE SHRI A. T. VARKEY, JM] I.T.A. NO. 2654/KOL/2018 ASSESSMENT YEAR: 2008-09 MARBLE IMPEX PVT. LTD. VS. ITO, WARD-4(2), KOLKATA. (PAN: AACCM 0608 B) APPELLANT RESPONDENT FOR THE APPELLANT SH. ANIL KOCHAR, ADV. FOR THE RESPONDENT SH. JAYANTA KHANRA, JCIT, SR. D R DATE OF HEARING 18.12.2019 DATE OF PRONOUNCEMENT 10.01.2020 ORDER PER SHRI A.T.VARKEY, JM : THIS IS AN APPEAL PREFERRED BY THE ASSESSEE AGAINS T THE ACTION OF THE CIT(A)-2, KOLKATA DATED 09.05.2018 U/S 250 OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT) FOR ASSESSMENT YEAR (HEREINAFTER AY) 2008-09. 2. AT THE OUTSET THE LD. COUNSEL FOR THE ASSESSEE B ROUGHT TO OUR NOTICE THAT HE IS NOT PRESSING GROUND NOS. 1 AND 2 BEING GENERAL IN NATUR E, SO STANDS DISMISSED. 3. COMING TO GROUND NO. 3 WHICH IS A LEGAL ISSUE BY WHICH THE ASSESSEE CHALLENGES AGAINST THE VALIDITY OF THE RE-OPENING OF THE ASSES SMENT MADE BY AO U/S 147 OF THE ACT. BRIEF FACTS OF THE CASE AS NOTED BY THE AO ARE THAT THIS CASE WAS PICKED UP FOR SCRUTINY AND RE-OPENED ON 27.03.2015 AND NOTICE U/S 148 OF THE ACT WAS ISSUED ON 27.03.2015. THE REASONS RECORDED BY AO FOR RE-OPENI NG THE ASSESSMENT WHICH IS FOUND IN THE ORDER SHEET IS REPRODUCED AS UNDER: THE UNDERSIGNED RECEIVED INFORMATION FROM DDIT(INV .), UNIT-3(3), KOLKATA IDE NO. DDIT(INV.)/U-3(3)/KOL/FIU-IND/6823/2014-15/747 DATE D 27.3.2015 IS AS UNDER: 2 I.T.A. NO. 2654/KOL/2018 ASSESSMENT YEAR: 2008-09 MARBLE IMPEX PVT. LTD. THE FIU-IND CASE BEARING STR NO. 100006824 & STR NO . 100006823 WAS RECEIVED BY THIS UNIT. AS PER INFORMATION IN THE DISSEMINATION NOTES OF THE ABOVE STR ENQUIRY WAS INITIATED. AFTER CONDUCTING ENQUIRY IT IS REVEALED THAT M/S MARBLE IMPEX (P) LTD. IS ONE OF THE BENEFICIARIES IN REGARD TO THE TRANSACTIONS MAD E IN THE FINANCIAL YEAR 2007-08 THROUGH THE DIFFERENT JAMA KHARCHI/ PAPER COMPANIES AND FIRMS AS MENTIONED IN THE ABOVE STRS. AFTER VERIFICATION OF THE ABOVE PAN OF M/S MARBLE I MPEX (P.) LTD. (PAN: AACCM0608B) IT IS FOUND THAT JURISDICTION OVER THE ASSESSEE IS LYING WITH UNDERSIGNED CHARGE. ON PERUSAL OF THE INFORMATION I FIND REASON TO BELI EVE THAT INCOME MORE THAN RS.1 LAKH HAS ESCAPED IN THIS FOR THE A.Y.2008-09. IT IS A FI T CASE FOR REOPENING U/S 147. 4. FROM A PERUSAL OF THE AFORESAID REASONS, I FIND THAT THE AO RECEIVED INFORMATION FROM THE DDIT(INV.) LETTER DATED 27.03.2015 AND HE HAS INITIATED THE ACTION ON THAT DAY ITSELF I.E. ON 27.03.2015 BY RECORDING THE REASONS FOR RE-OPENING ON THE ORDER SHEET DATED 27.03.2015 WHICH IS VERY CLEAR FROM THE PERUS AL OF THE ORDER SHEET (SUPRA). THEREFORE THE AVERMENT BY THE AO THAT AFTER RECEIPT OF THE INFORMATION FROM DDIT(INV.) AN ENQUIRY WAS CONDUCTED WHICH REVEALED THAT THE ASSESSEE IS ONE OF THE BENEFICIARIES IN REGARD TO THE TRANSACTIONS MADE IN THE FY 2007-08 THROUGH THE DIFFERENT JAMA KHARCHI PAPER COMPANIES AND FIRMS AS MENTIONED IN THE ABOVE STRS IS EX FACIE INCORRECT, SINCE AS PER THE FIRST LINE OF THE REASONS RECORDED ITSELF THE AO HIMSELF HAS STATED IN NO UNCERTAIN TERMS THAT HE GO T THE INFORMATION FROM DDIT(INV.), UNIT-3 LETTER NO. DDIT(INV.)/U-3(3)/KOL/FIU-IND/682 3/2014-15/747 DATED 27.03.2015. SO IT IS DIFFICULT TO BELIEVE THAT ON T HE SAME DAY HE HAS CONDUCTED THE INQUIRY IMMEDIATELY AFTER RECEIPT OF LETTER FROM TH E DDIT(INV.) AND ON THE SAME DATE HE CAME TO THE CONCLUSION THAT THE ASSESSEE IS ONE OF THE BENEFICIARIES THROUGH PAPER COMPANIES. IT IS ONE THING TO SAY THAT AFTER RECEIP T OF THE INFORMATION FROM DDIT(INV.) HE INITIATED PRELIMINARY INQUIRY AND IT IS TOTALLY DIFFERENT THING TO SAY THAT HE STARTED THE INQUIRY AND COMPLETED THE INQUIRY ON THE SAME DAY O N 27.03.2015 ABOUT TRANSACTION TAKEN PLACE DURING FY 2007-08 (7 YEARS BEFORE). THE REAFTER FROM A READING OF THE REASONS RECORDED ON A STANDALONE BASIS, I NOTE THAT THE AO HAS STATED THAT HE HAS VERIFIED FROM THE PAN DETAILS OF THE ASSESSEE THAT THE ASSESSEE FALLS IN HIS JURISDICTION AND ON PERUSAL OF THE INFORMATION [DDIT(INV.)] HE H AS REASON TO BELIEVE THAT INCOME OF MORE THAN 1 LAKH HAS ESCAPED ASSESSMENT FOR AY 2008-09 AND TH AT IT IS A FIT CASE TO RE-OPEN. SO, I FIND THAT THE AO HAS NOT SPELLED OUT IN HIS REASONS RECORDED TO RE-OPEN FROM WHOM THE ASSESSEE HAS TAKEN THE BENEFIT OF ACC OMMODATION ENTRY AND WHICH ARE 3 I.T.A. NO. 2654/KOL/2018 ASSESSMENT YEAR: 2008-09 MARBLE IMPEX PVT. LTD. THE DIFFERENT JAMA KHARCHI/PAPER COMPANIES OR FIRMS FROM ALL THE ASSESSEE HAS TAKEN ANY ENTRY AND HAS GOT ILLEGAL BENEFIT OUT OF IT AND MOREOVER HOW MUCH INCOME HAS ESCAPED ASSESSMENT IS ALSO NOT SPECIFIED. IT IS VAG UELY STATED IN THE REASONS RECORDED THAT MORE THAN 1 LAKH HAS ESCAPED ASSESSMENT IN THIS AY 2008-09. I T HAS TO BE KEPT IN MIND THAT THE AO CAN RE-OPEN THE ASSESSMENT ONLY IF THERE IS REASON TO BELIEVE ESCAPEMENT OF INCOME. REASON TO BELIEVE POSTULATES A FOUNDATION BASED ON INFORMATION AND BELIEVE BASED ON REASON. AFTER A FO UNDATION BASED ON INFORMATION IS MADE, THERE STILL MUST BE SOME REASON WHICH SHOULD WARRANT HOLDING A BELIEF THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. FR OM THE REASONS RECORDED AS STATED AFORESAID, I NOTE THAT THE JURISDICTIONAL FACT & LA W NECESSARY FOR RE-OPENING IS ABSENT. FROM THE DISCUSSIONS MADE ABOVE, I NOTE THAT THE IN FORMATION FROM THE DDIT(INV.) WAS RECEIVED BY THE AO ON 27.03.2015 AND THE AO TAK ING NOTE THAT THE ASSESSEE FALLS UNDER HIS JURISDICTION HAS WRITTEN DOWN THE CORRESP ONDENCE DETAILS OF THE DDIT(INV.) AND HAS MADE A VAGUE AVERMENT THAT MORE THAN 1 LAKH HAS ESCAPED ASSESSMENT WITHOUT EVEN BOTHERING TO SPECIFY HOW MUCH AMOUNT H AS ESCAPED ASSESSMENT. EVEN THOUGH THE AO ALLEGES THAT THE ASSESSEE IS A BENEFI CIARY OF ACCOMMODATION ENTRY FROM JAMA KHARCHI/PAPER COMPANIES, HE HAS NOT BOTHERED T O NAME WHICH PAPER COMPANIES OR JAMA KHARCHI COMPANIES HAVE GIVEN ACCOMMODATION ENTRY TO THE ASSESSEE IN THIS ASSESSMENT YEAR. IN THIS CONTEXT ONE HAS TO BE KEEP IN MIND THAT THE EXPRESSION REASON TO BELIEVE AS OCCURRING IN SECTION 147 OF THE ACT IS STRONGER THAN THE EXPRESSION IS SATISFIED AND AFTER GOING THROUGH THE REASONS RECO RDED (SUPRA) I AM OF THE OPINION THAT THE REQUIREMENT OF LAW HAS NOT BEEN MET IN THE REAS ONS RECORDED IN THE INSTANT CASE TO VALIDLY RE-OPEN THE ASSESSMENT. INFORMATION RECEIVE D FROM DDIT(INV.) AT THE MOST MAY TRIGGER REASON TO SUSPECT . THEN THE AO IS SUPPOSED TO MAKE REASONABLE ENQUI RY AND COLLECT MATERIAL WHICH WOULD MAKE HIM BELIEVE T HAT THERE IS IN FACT AN ESCAPEMENT OF INCOME. HERE I FIND THAT THE AO HAS RECEIVED THE MESSAGE/INFORMATION ON 27.03.2015 AND HAS RE-OPENED THE ASSESSMENT BY ISSU ING A NOTICE U/S 148 OF THE ACT ON 27.03.2015 ITSELF WHICH MEANS THAT THERE IS NO PREL IMINARY ENQUIRY WORTH THE NAME HAS BEEN CONDUCTED BY THE AO OR ELSE NAMES OF PAPER COM PANIES AND AMOUNT WHICH ESCAPED COULD HAVE BEEN SPELLED OUT. THEREFORE, THE CONDITION PRECEDENT FOR INVOKING JURISDICTION TO RE-OPEN HAS NOT BEEN MET BY THE AO BEFORE HE ISSUED NOTICE U/S 148 OF 4 I.T.A. NO. 2654/KOL/2018 ASSESSMENT YEAR: 2008-09 MARBLE IMPEX PVT. LTD. THE ACT AND THEREFORE ALL THE CONSEQUENTIAL ACTIONS ARE NULL IN THE EYES OF LAW AND THE ASSESSEE SUCCEEDS ON THE LEGAL ISSUE RAISED. 5. MOREOVER, I NOTE THAT THE APPROVAL HAS BEEN TAKE N BY THE AO FROM ADDL. CIT, RANGE-4 FOR RE-OPENING. HOWEVER THE RELEVANT ASSESS MENT YEAR BEFORE US IS AY 2007- 08 AND THEREFORE 4 YEARS FROM THE END OF THE RELEVA NT ASSESSMENT YEAR EXPIRES ON 31.03.2013 AND SO WHEN THE NOTICE U/S 148 HAD BEEN ISSUED ON 27.03.2015, IT IS A CLEAR CASE OF ISSUANCE OF NOTICE AFTER 4 YEARS. IT SHOULD BE NOTED THAT AFTER 4 YEARS, THE AO COULD HAVE ONLY ISSUED NOTICE U/S 148 OF THE ACT AF TER TAKING APPROVAL FROM COMMISSIONER AND NOT FROM ADDL. COMMISSIONER AS PER SECTION 151 OF THE ACT. SO THE ISSUANCE OF NOTICE U/S 148 OF THE ACT IS BAD IN LAW ON THIS SCORE ALSO. SO THE ACTION OF AO IS AB-INITIO VOID . THE APPEAL OF THE ASSESSEE STANDS ALLOWED. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 10TH JANUA RY, 2020. SD/- (A. T. VARKEY) JUDICIAL MEMBER DATED: 10TH JANUARY, 2020 BIDHAN (P.S.) COPY OF THE ORDER FORWARDED TO: 1. APPELLANT MARBLE IMPEX PVT. LTD., ROOM NO. 29, 2 ND FLOOR, 13, POLLOCK STREET. 2. RESPONDENT ITO, WARD-4(2), KOLKATA. 3. CIT(A)-2, KOLKATA. (SENT THROUGH E-MAIL) 4. CIT 5. DR, KOLKATA BENCHES, KOLKATA. (SENT THROUGH E-MAIL) /TRUE COPY, BY ORDER, ASSISTANT REGISTRAR ITAT, KOLKATA BENCH