ACIT Circle-59(1), New Delhi V. Neeraj Kumar Singhal, New Delhi

ITA 283/DEL/2021

AI Insights

The case involves an appeal by the Revenue against the order of the Commissioner of Income Tax (Appeals) which had quashed the reassessment order for the Assessment Year 2009-10. The reassessment was initiated under Section 147 read with Section 148 of the Income Tax Act, 1961, based on the grounds that certain income had escaped assessment. The Tribunal examined the validity of the reassessment proceedings and the jurisdiction under Section 147, particularly in light of the completion of the original assessment under Section 143(3) and the expiry of the four-year period for reopening the assessment. The Tribunal referenced several judicial precedents and found that the conditions for invoking jurisdiction under Section 147 were not met, leading to the dismissal of the Revenue's appeal.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 121622 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 5 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 20-08-2023
• Assessment Year: 2009-2010
• Appeal Filed On: 23-03-2021
• Other Referred Cases: Prabhu Dayal Aggarwal vs. ACIT, HCL Technologies Ltd vs. Deputy Commissioner of Income Tax, Oracle India Pvt. Ltd vs. Assistant Commissioner of Income Tax Circle 13(1), New Delhi, Ganga Saran & Sons Pvt. Ltd vs. ITO, Calcutta Discount Co. Ltd vs. ITO, Swarovski India Pvt. Ltd vs. DCIT, Birla VXL vs. ACIT, She Nath Singh vs. ACIT, Dr. Willmar Schwabe India Pvt. Ltd vs. ACIT & Ors., JSRS Udyog Ltd & Ors vs. ITO
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMIT GOEL
• Section: 37; 144; 15; 43; 48; 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “E” DELHI BEFORE SHRI SAKTIJIT DEY, VICE PRESIDENT & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER I.T.A. No.283/DEL/2021 Assessment Year 2009-10 ACIT, Circle-59(1) Delhi. Vs. Neeraj Kumar Singhal 38, FIE, Functional Industrial Estate, Delhi-110092 TAN/PAN: AATPS3546G (Appellant) (Respondent) Appellant by: Shri Shri Amit Goel, CA Respondent by: Ms. Smita Singh, Sr.DR Date of hearing: 21 08 2023 Date of pronouncement: 09 2023 O R D E R PER PRADIP KUMAR KEDIA, A.M.: T he ca p t i o n e d a p p e al ha s be e n fi l e d b y t h e R e v en ue a g ai ns t t he o rd e r o f t h e C o m mi ss i o n er o f In c o me T a x ( A pp ea ls)- X X X V I I, N ew D e lh i [ ‘ C I T ( A ) ’ i n sh or t] d a t e d 1 7 . 0 9. 2 0 2 0 a r i si ng fr o m t he a ss es s m e n t or d e r d a te d 26. 1 2. 2 0 1 6 pa sse d b y t h e A s se s s i ng O ffi c e r (A O ) un de r S e c t i on 14 3( 3 ) r. w . S e c t i o n 1 47 o f t h e In c o me T a x A ct , 19 6 1 ( t h e A c t ) c on c e rn in g A Y 20 09- 10 . 2. T he re vi se d g ro u n ds o f a pp e a l ra is e d b y t he re venu e r e a d a s un d e r : “ 1 . O n th e f ac t s an d c i r c u m s t a n c e s o f c a s e , t he Ld . C I T ( A )- 3 7 ha s e r r e d i n f a c ts & l aw i n h o ld i n g t ha t t h e r e a s s e s s m en t p r o c e e d i ng s w e r e ba r r e d by li m it a t i on a n d t he r e f o r e , v o i d- a b - i ni t i o . T h i s i n s pi t e t h e f a c t s t h a t t he s a n c t i o n b y t he P r . C o m m i ss i on e r of I nc o m e Ta x , D e l h i - 2 0, f o r th e i s s ue o f N o t i c e w a s o bt a i ne d a s p e r pr o v i s i o n of s e c t io n 1 51 (1 ) o f t h e I . T . A c t . The Ld. C I T (A ) a s p e r I.T.A. No.283/Del/2021 2 de c i s i o n by t he I T A T i n t h e c a s e of P r a h u D a y a l A g ga r w al f or A Y 20 09 - 1 0 v i d e o r d e r d a te d 2 9 . 0 6 . 2 01 8 h a s e r r e d i n t he f a c t s & l a w by n ot e e ns id e r i n g t h e p r o v i s o t o s e c t io n 14 7 o f t he I T A c t , pr e s c r i be s t h at e v e n a f t e r th e e x p i r y of 4 y e ar s a n a s s e s s m e n t c a n be r e o pe n e d on f ul f i l l m e n t o f o ne o f t h e t w o c o nd i ti o n s i e f i r s t th e r e w as f a i lu r e o n pa r t o f a s s e s s e e t o s ub m i t r e tur n e i t he r u nd e r s e c t io n 1 3 9 o r i n r e s p on s e t o a n o ti c e W/ s 1 4 2 (1 ) or 1 48 a n d s e c on d by f ai l u r e t o d is c lo s e fu l l y a n d t r u l y a l l ma t e r i al fa c t s ne c e s s a r y f o r a s s e s s m e nt . T he L d . C I T (A ) h a s e r r e d i n ap p r e c i at i n g th e f ac t t h at t he a s s e s s e e ha s no t di s c l o s e d f ul l y an d t r ul y m a t e r i al fa c t s a nd n e w i n f or m at i o n c a m e i n p o s s e s s i on d e p a r tm e n t o n t he ba s i s o f w h i c h c a s e w as r e o p e n e d. 2. T he Ld . C I T ( A ) h a s e r r e d i n f a c t s & la w i n n ot to t ak i n g a c c o u nt th e d o c um e n t a r y e v i de n c e c o ns i de r e d b y t h e A O , s p e cia l l y w i t h r e s p e c t t o t he bo gu s c l a i m of l o s s e s o f R s . 1, 8 1 , 5 7, 0 3 7 / - o b t ai n e d by t h e a s s e s s e e as ac c o m m o da t i on e nt r ie s t h r o ug h bro k e r n a m e l y A T O Z S t oc k T r a d e P r i v a t e Li m i t e d b y m i s u s i ng C l i e n t C o de Mo d i f i c a t io n f a c i li t y . C o n s i de r i n g a l l t h e m a t e r i al f ac t s w hi c h L d . A O h a s b r ou g ht o n t h e r e c o r d , i t i s c l e a r l y e s t ab l is h e d t h a t t he as s e s s e e h as no t f ul l y d i s c l os e d a l l t h e m a t e r i a l fa c t s d ur i n g t he as s e s s m e n t p r o c e e di n gs u n de r s e c t i o n 1 4 3 (3 ) o f I T . A c t , h e n c e , t he r e as s e s s m e nt p r o c e e d i ng s u s 1 4 7 w a s c l e a r l y j us t if ie d . ” 3. B ri e f l y s t a t e d , t h e a ss e s se e i n t h e i n st an t c as e is i n t e r al i a e ng a g e d i n th e t r a n sa c t i o ns i n de ri va t iv e se g me n t of t h e N S E. T he a ss es se e fi l ed r e t u rn o f i nc o m e a t R s. 2, 45 , 83, 1 90 / - for t he A sse s s me nt Y e a r 2 00 9 -1 0 i n q ue st i o n. T h e r e t u r n fi le d w a s su b je c t e d t o s cr ut i ny a ss es s me n t u nd er S e c ti on 1 43 (3 ) o f t he A ct vi d e or de r da t ed 2 7 . 1 2. 20 1 1. T he re a ft e r , no t i c e u n de r S e ct i on 1 48 o f t he A c t d a t ed 3 1. 0 3. 20 1 6 w a s is su e d up on t h e a s se sse e se e k i n g t o re o p e n t h e c o m p l e te d as s e ss m e nt . T he re - as se ss m e n t or d e r w a s a cc or di ng l y f in a l i z ed a ft e r ma k i n g a d di t i o n s o f Rs.1 , 8 1, 5 7, 03 7/ - ow i n g t o a l l eg e s hi ft i ng o u t o f pr o fi t e a r ne d b y t he a ss e s se e d ur i n g t he F i n a n c i a l Y e a r 2 0 0 8- 0 9 t hr ou g h C l i e nt C od e M od if i c a t i o n (C C M ) ro ut e . 4. T he a ss e s se e c ha l l en g e d t he r e - a ss es s m e nt o r d e r b e f or e t he CI T ( A ) o n b ot h c ou n t s n a me l y, v a l i d it y o f j ur is d ic ti o n a s su m e d un d e r S ec t i o n 14 8 o f t h e A c t a s w el l a s me ri t s o f th e a d d i t i o n s. T he I.T.A. No.283/Del/2021 3 CI T ( A ) t o o k no t e o f t he re a s on s re c or d e d for t h e p ur p o se s o f re - a ss es s m e n t a nd re f e rr ed t o se ve ra l j u d ic i a l d e c i s i on s i n t he c o n t e x t a nd f ou n d m e ri t i n t h e p l ea o f t he a s se s s ee t ow a rd s ab se n c e o f j ur i s d i c t io n u su r p e d u nd er S e ct i o n 14 7 r . w . S e ct i on 1 4 8 o f th e A ct . H av i n g h e l d t ha t t he r e -a ss e s s m en t o r de r h a s b e e n pa s s e d w i t h o ut j ur i s d i c t io n u n d e r S e c ti o n 1 4 7 o f t h e A c t , t h e C I T (A ) q ua s he d t h e re - a s se ss m e n t o r de r i n que st i o n. 5. A g gri e v e d by t h e a c t i o n o f t h e C I T( A ), th e R e v e nu e ha s pr e f e r re d a p p e a l be fo r e th e T ri b u na l . 6. W h e n t h e m a tt e r w as c a l l e d fo r h e a r in g, t h e l d. D R for t h e Re ve n u e r e l i e d up on t h e r ea so ns re c or d e d t o r e o pe n t h e c o mp l et e d a ss es s m e n t a n d su b m i tt e d t h a t i t i s not pr o p e r t o al l e g e w r on g fu l us u rp a t i o n o f j u ri s d ic t i o n u n de r S e c t i on 1 47 o f t he A c t. I t w a s su b mi t t e d t h a t t h e A sses si n g O ffi c e r ha s g a t h er ed ev i d e n ce s t o f or m a p rim a f ac i e o p i n i on t ow a rd s C l i e n t Co d e M od i f i ca t i o n re s ul t i ng i n c la nd es t i ne r e d u c t i on o f pr o fi t s r e p o r te d. It w a s furt h e r su b m i t t e d t ha t i n t h e l i g h t o f t he ma t e ri a l a va i l a b l e w i t h t he D e p a rt m e nt a s de p i c te d i n t he r e a so n s re c or de d, t h e p re re qu is i t e s fo r i n v o k in g t he j ur i s d i c t io n un d er S e c ti on 1 47 s t o od fu l f i ll e d an d t h e fa i lu re o n t h e pa r t o f t h e a ss e s se e to d is c l ose ma t e r i a l f a ct s t r ut h f ul l y a re i m p l i c it i n t he r e a s o ns r e c ord ed . I t w a s s ub mi t t e d t ha t m e r e r e p e t i ti o n o f st a t u t o ry la ng ua ge i s n ot i n c u m b e n t s o l on g a s t h e fa i l u re o f a ss es se e t o di sc l os e a l l fa c t s tr ut h f ul l y i s d i s c e rn i bl e fr o m r e a so ns re c or d e d . It w as t hu s co nt e n de d t h a t CI T (A ) o ug ht not t o ha ve i nv a l i d a t e d t h e a c t i on un d e r S ec t i o n 1 47 o f t he A ct. T he l d. D R th us su b mi t t e d t ha t t h e a c t io n o f t he C IT ( A ) i nva l i da ti ng t he ju ri sd i c t i o n sh o ul d b e r e v e r se d an d t he m a t t e r b e re st or ed t o t he f i l e o f t he CI T ( A ) fo r a dj ud ic a ti o n o f i ss u e o n m er i ts. 7. T he l d. c ou n s el f or t he a ss e s se e , on th e o th e r ha nd , v e he m e nt l y I.T.A. No.283/Del/2021 4 su p p or t e d t h e o rd e r o f t he C I T (A ) a nd su b m it t e d t h at t he r e as o n s re c or d e d gi vi ng r i se t o t h e j u ri s d i c t i on t o t h e A sse s si ng O ffi c e r ne i th er p a ss t h e m u st er o f m ai n pr o vi si o n no r t ha t o f 1 s t pr ov i s o t o S ec t i on 1 4 7 o f t h e A c t. M ul t ip l e d e fe n s es w e r e p e ddl e d t o assa i l t he us u rp a t i o n o f ju ri s di c ti o n w hi ch w e sha l l d ea l w it h i n a pp ro p r i a te pa r a g r a p h. T h e l d. co u ns e l s ub m i tt e d t ha t n o d e f au lt h a s be e n f o un d w it h th e o r de r o f t h e CI T ( A ). 8. W e h a v e c a re fu l l y c on si de re d t he ri va l s u b m i s s ion a nd p e r us e d t he r e a s on s r e co r d e d u n d e r S ec t i on 1 4 8 (2 ) o f th e A ct . T h e fi r st a pp e l la t e or de r a s w e l l as t h e a ss e ss m e n t or de r w ere c ar e f ul l y pe r u s ed a n d m a t e r i a l r e fe rr ed t o a nd r el i e d u po n i n th e c ou r s e o f he a ri ng h as b e e n t a ke n i nt o a c c ou n t. 9. T he CI T (A ) h a s a dj u d i c a t e d t he obj e c t i o n o f t h e a sse sse e t ow a r ds a ss u mp t i o n o f j ur i s d i c t i on u n de r S e c t i o n 147 o f t he A c t i n fa v o u r o f t h e as se sse e a ft e r ma k i n g r e f e r e nc e s t o se v e r a l j u di c i a l pr e c e de nt s. T h e r e l e v a n t p a r ag ra ph d e a l i n g w i t h t h e i s sue o f t he or d e r o f t h e C IT (A ) i s r ep ro d uc e d h e r e i n fo r r ea dy r e fe re n c e : “7 . 3 G r ou nd o f A p pe a l N o . 2. In t hi s G r ou n d o f a p pe a l , t he a p pe l l a n t ha s c o nt e n de d th a t t h e n o t i c e u s 1 4 8 w a s b ad i n l aw , w i t h ou t j ur i s di c t i o n , ba r r e d b y l i m i t at i o n an d i l leg a l. Th u s t he ap pe l l a nt c o n t e nd e d t ha t t h e s ai d n ot i c e an d t he ass e s s m e nt or d e r pa s s e d a r e li a b le t o be q u a s h e d . In t h i s g r o u n d o f a p p e al , t he ap pe l l a nt h a s c h a l l e n g e d t he v a l i di t y of i n i t i at i o n of r e a s s e s s m e nt pr o c e e di n g s . Th e s u bm i s s i o n o f t h e a p p e l l a nt is r e pr od u c e d a s un de r : It i s t h e r e s pe c t f ul s u b m is s i on of t h e a p pe l l a n t th a t a s s e s s m e nt in i t i at e d u n d e r s e c t io n 1 47 a n d th e i m pu gn e d a s s e s sm e n t o r d e r un de r s e c ti o n s 14 7 /1 4 3 ( 3 ) of t h e A c t i s w i t ho u t i u ri s d i c ti o n , i l l e g al an d b ad i n l a w f o r t he f o l lo w i ng r e a s on s , w hi c h a r e w i t ho ut pr e j u d ic e t o t he e a c h o t h e r . I. Th e r e as s e s s m e n t pr oc e e d i ng s i ni t i a t e d a r e ba d -in -l a w a n d ba r r e d by l i m i t at i o n. O r ig i n al as s e s s m e n t i n t hi s ca s e w a s c om pl e t e d w /s 1 4 3 ( 3 ) a n d a s p e r pr ov i s o t o s e c t io n 1 47 , no a c t i on of r e o p e n i n g c o ul d h a v e be e n t ak e n af t e r t h e e x p i r y o f 4 y e ar s f r o m I.T.A. No.283/Del/2021 5 t he e n d o f r e l e v an t a s s e s s m e nt y e a r . II . Th e r e as o n s r e c or de d un d e r s e c t io n 1 4 8 o f th e A c t c a n no t be c on s t r u e d as " r e a s o ns t o be l i e v e " t h at a n y i n c om e of t he as s e s s e e ha d e s c ap e d a s s e s s m e n t , w hi c h i s a c on d it i o n pr e c e de nt f o r in i t i at i n g r e as s e s s m e n t pr oc e e d i ng s . II I. Th e r e as s e s s m e n t pr oc e e d in g s ar e li a b le t o be q ua s h e d a s n o s an c t i o n w / s 15 1 of t h e A c t h a s b e e n p r o v i d e d . Th e a b ov e a r e b e in g e la b or a t e d a s u n de r : - 1. Th e r e a s s e s s m e n t p r o c e e d i n gs i n it i a t e d ar e b ad -in - la w a n d ba r r e d b y l i m it a t i on . O r i g i na l as s e s s m e nt i n t h is c a s e w as c o m p l e t e d u s 14 3 ( 3 ) a nd a s pe r p r o v i s o t o s e c t io n 1 4 7, n o a c t i o n of r e o pe n i ng c ou l d h av e b e e n ta k e n af t e r t he e x p i r y o f 4 y e ar s f r o m t h e e n d o f re l e v a nt as s e s s m e n t y e ar . A s pe r p r o v is o t o s e c t i o n 1 4 7 , no ac t i o n o f r e o p e ni n g c a n b e t a k e n af t e r t he e x pi r y o f 4 y e ar s f r o m t h e e n d o f r e l e v a nt a s s e s s m e nt y e a r s i n t h e c as e w he r e a n as s e s s m e n t h a d be e n m ad e w / s 1 4 3 ( 3 ) . Th e p r o v i s o i s r e p r o d u c e d a s u n d e r : P r ov i d e d th a t w he r e an as s e s s m e n t u n d e r s u b - s e c t i on ( 3 ) of s e c t i o n 14 3 o r t h is s e c t i on h a s b e e n m ad e f o r t h e re l e v a nt a s s e s s m e n t y e a r , no ac t i o n s h al l b e t a k e n u n d e r t h is s e c t i o n a f t e r t h e e x p i r y o f f ou r y e a r s f r o m t he e n d of r e l ev a n t a s s e s s m e n t y e a r , u nl e s s a n y i n c om e c h ar ge a bl e t o t ax h a s e s c a p e d a s s e s s m e n t f o r s u c h a s s e s s m e nt y e a r b y r e aso n o f t h e f a i l ur e o n t h e p ar t of t he as s e s s e e t o m a k e a r e t u rn u n d e r s e c t i o n 1 3 9 or i n r e s p on s e t o a n o t ic e i s s u e d u n de r s u b - s e c t i o n ( 1 ) of s e c t i on 1 4 2 or s e c t i o n 14 8 o r to di s c l o s e ful l y a n d t r ul y a l l m at e r i a l f ac t s n e c e s s ar y f o r h i s as s e s s m e n t f or t h at a s s e s s m e n t y e a r . O r i g i na l l y , t he as s e s s m e n t w as c o m pl e t e d w /s 1 43 (3) o n 27 . 1 2 . 2 01 1 . Th e r e h a s b e e n n o f a i l ur e o n t h e p a r t of t he as s e s s e e to f u r n i s h a n d d is c lo s e f ul l y an d t r u l y a l l m at e r i al f a c t s ne c e s s a r y fo r t he as s e s s m e n t . I t i s a s e t t l e d l a w t h a t w he r e t he a s s e s s e e ha s fu r n i s h e d al l m a t e r i al f ac t s , t h e c a s e c a n no t b e r eo p e ne d af t e r t he e x p i r y o f f o u r y e a r s w h e r e t h e as s e s s m e nt h as be e n o r i g i n al l y c om p l e t e d W / s 1 43 ( 3 ). M e r e l y m ak i n g a b a l d s t a t e m e nt i n t he " r e as o n " t h at t he r e i s a f ai l u r e o n t he p a r t o f t h e as s e s s e e is n ot s uf f i c i e n t. I n s uc h a s i t u at i o n, t h e n o ti c e u / s 14 8 i s s ue d be y o n d t he pe r i o d o f f o u r y e ar s i s c l e ar l y b ar r e d by l i m i t a t i on . It i s a s e t t l e d la w t h a t no t i c e u/ s 1 48 h as t o s t a n d o r f a l l o n t h e ba s i s o f " r e as on s r e c or de d . I.T.A. No.283/Del/2021 6 Th e H on 'b l e D e l hi C ou r t i n H C L Te c h n o l os i e s L t d, o. D e p ut y C o m m i s s i on e r o f I n c o m e Ta x ( W . P . ( C . ) 8 1 6 4 / 2 0 1 0 d e ci de d o n 20 / 7/ 2 01 7 ) h a s he l d as f o l l o w s : " 16 . Th e A O h a s n o t m a de t h e e f f o r t of d is c l os i n g, i n t he r e a s on s , w ha t a c c o r d i ng t o h i m c on s t i t u t e d t he f a il ur e b y t he A s s e s s e e t o m ak e a f u l l an d t r u e d i s c l o s u r e . A m e r e r e pr o d uc t i o n o f t h e l a ng ua g e of t he p r o v i s i o n w i l l n ot s uf f i c e . A l s o , al t ho u gh m a k i ng s u c h a n a v e r m e n t e i th e r i n t he o r d e r r e j e c t in g t h e ob j e c t i o ns o f t he A s s e s s e e o r s ub s e q ue n t l y i n t h e c o un t e r - a f f i da v i t i n t h e a n s w e r t o a w r i t p e t i t io n w i l l n ot s a t i s f y t h e r e qu i r e m e n t o f th e l aw . T he r e as o n s w i l l h av e t o s p e ak f o r t h e m s e l v e s . F o r c o m pl y i n g w i t h t h e j u r i s d i c t io n al r e q ui r e m e nt un d e r th e f i r s t p r ov i s o t o S e c t i on 14 7 of t h e A c t, th e r e a s o ns w o ul d ha v e t o sho w i n w h at m a nn e r t he A s s e s s e e h ad f ai l e d t o m ak e a f ul l a nd t r ue d i s c l o s u r e o f al l t he m a t e r i a l f a c t s ne c e s s ar y f o r t he a s s e s s m e n t . T he f ai l u r e t o d o s o w o u ld no t b e a m e re i r r e gu l a r i ty . I t w o ul d r e nd e r t h e r e op e ni n g o f th e as s e s s m e nt a f t e r f ou r y e ar s v ul n e r a b l e t o i n v al i d at i o n. " ( e m p ha s i s s up pl i e d ) Th e H on 'b l e D e l h i H i gh C ou r t i n t he c a s e o f O R A C LE I N D I A P R I V A T E LI M I T E D A SS I S TA N T C O M M I SS IO N E R O F I N C O M E TA X C I R C L E 1 3 (1 ), N E W D E L H I d e c i s i on da t e d 2 6 t h J uly 20 1 7 he l d as un de r :- 2 7 . A s e c on d a s p e c t o f t he m at t e r i s t h at t h e ab ove j u r i s d i c t io n al r e q u ir e m e nt s h o ul d b e s h o w n t o h av e b e e n f u l f i ll e d f r o m t h e r e a s o n s f or r e - o p e ni n g o f t h e ass e s s m e n t . I n ot h e r w o r ds , t he r e as on s m u s t s p e a k f o r t h e m s e l ve s . T he m an da t o r y j u r i s d i c ti o na l r e qu i r e m e n t i n t e r m s o f t he f i r s t p r o v i s o t o Se c t i o n 1 4 7 of t he A c t w i l l n ot be f ul f il l e d if t he r e as o n s d o n ot t he m s e lv e s c l e ar l y i n di c a te t ha t th er e w a s in f a c t a f ai l u r e by t he A s s e s s e e t o m a k e a f ul l an d tr ue d i s c l o s u r e o f a l l m at e r i a l f a c t s . T he r e a s on s h av e t o e x pl a i n w h at t he m at e r i a l w a s t ha t w a s n ot d is c l o s e d by t h e A s s e s s e e w h ic h t he A s s e s s e e ou gh t t o h a v e di s c l o s e d i n t he fi r s t i n s t a nc e . T h i s s h o u ld b e a pp ar e nt f r o m a r e a d i ng o f t he r e as o n s t he m s e l v e s . Th e r e as o n s h av e t o g o be y o nd me r e l y r e pe a t in g th e l an g ua ge o f t he p r ov i s i o n r e ga r d i n g the f a i l u r e o f t he A s s e s s e e t o m ak e a fu l l an d tr ue d i s c l os ur e o f m a t e r i al f a c t s . Th e y s h o ul d i n di c a t e i n w h at m a n n e r w as t h e re s uc h a f a i l ur e . 2 8 . I n m a ny of t h e c as e s , w he r e t he r e - op e ni n g o f a n a s s e s s m e n t i s c h al l e ng e d , t he R e v e n ue t r i e s to m a k e u p f o r t h e ob v i ou s d e f e c t i n t h e r e as on s t he m s e l v e s w h i c h d o n ot s pe l l ou t t he r e a s o ns by p r ov i d i ng a j u s t i f i c at i o n a t t h e s t a ge I.T.A. No.283/Del/2021 7 o f di s p o s al o f t h e o b j e c t i o ns o r l at e r i n t h e c o u nte r - a ff i d av i t w h e n t h e r e - op e ni n g i s c ha l l e n g e d b y a w r i t pe t i t i on . T h i s , a g ai n , i s i m pe r m is s i bl e i n l a w . S i nc e t he r e a s o ns mu s t s p e ak f o r t h e m s e l v e s , a s u bs e q u e nt a t t e m p t t o s u pp l y t h e o m i s s i o n a t t he s t a ge o f an o r de r d i s p os i n g o f t he o bj e c t i ons r a i s e d by t h e A s s e s s e e or p r o v i di n g t he m i n t h e c o u nt e r - af f i dav i t i n r e pl y t o th e w r i t pe t i t i on or e v e n w or s e , m a k i ng g oo d t h at d e f e c t i n t h e c o u r s e of a r g um e n t s be f o r e t h e C o ur t , w i l l s i m pl y n ot s uf f i c e . Th e H on 'b l e B om b a y H i g h C o u r t i n t h e c as e of L up i n L t d. o. A s s i s t a r t C o m m i s s i o n e r o f I nc o m e - t ax (L TU ) , Mu m b a i [ 2 0 1 4] 46 ta x m a n n. c o m 3 96 ( B o m b a y ) h e l d a s u nd e r : 8 . I t i s t r ue t ha t t h e r e a s o n s f or i ni t i a t i n g t h e r e a s s e s s m e nt p r o c e e di n gs d o e s i n f ac t s t a t e th a t t h e r e w a s a f ail u r e on t he p a r t o f t h e p e t i t i on e r t o di s c l o s e fu l l y a nd t r ul y al l m a t e r i al f a c t s n e c e s s a r y f o r i t s a s s e s s m e n t . H o w e v e r , m e r e l y m ak i n g t h i s b a l d as s e r t i on i s n ot e n o u g h . I t i s n ow w e l l se t t l e d t h at t h e r e a s o n s w h ic h a r e r e c or de d b y t h e A s s e s s i n g O f fi c e r f o r r e - o pe n i ng t he a s s e s s m e n t , ar e t h e on l y r e a s o n s w h ic h c a n b e c on s i d e r e d . N o s u bs t i tu t i on or d e l e t io n i s p e r m is s i bl e . N o a d di t i on s c a n b e m a d e t o t h o s e r e a s on s . N o i n fe r e n ce c an be a l l ow e d t o b e d r aw n b as e d on r e a s o ns n ot r e c o r de d . T he r e as o n s r e c or d e d s h o ul d b e c le a r a n d u n a m bi g uo us a nd s ho ul d n o t s u f f e r f r o m an y v ag u e ne s s . Th e r e as o n s ar e t he m an i f e s t at i o n of t h e m i n d of t h e A s s e s s i n g O f f i c e r a n d t h e r e f or e , s h o u l d b e s e l f -e x p l an at o r y a n d s h o u l d n ot k e e p t he A s s e s s e e g ue s s i ng f o r t he r e as on s . Th e r e a s o ns pr ovi d e t he l i n k be t w e e n t he c on c l u s i o n a nd t he e v i d e nc e . Th e re as o n s r e c o r d e d m u s t b e b a s e d o n e v i de n c e s o t h at i n t h e ev e n t o f a c h al l e n ge , th e A s s e s s i ng O ff i c e r m us t be a b le t o j us t i f y t he s am e b as e d on th e m at e r ia l av a i la b l e o n r e c o r d. H e m u s t d i s c l o s e i n t h e r e a s o ns a s t o w h i c h f ac t or m a t e r i al w a s n ot d i s c l o s e d by t he A s s e s s e e f u l ly an d t r u l y n e c e s s a r y f o r a s s e s s m e n t f or t h a t a s s e s s m e n t y e ar , s o a s t o e s t abl i s h t he v i t a l li n k be t w e e n t h e r e as on s a nd t he e v i d e n c e . Thi s v i t al l i n k i s t h e s a f e gu ar d a g ai n s t a r b it r a r y r e op e ni n g of a c o nc l u d e d a s s e s s m e n t . In t h e c a s e of S w ar ov s k i I n di a (P ) L t d . • D C I T ( 2 01 4 ) 5 0 ta x m a n n. c o m 57 (D e l ) t h e H on 'b l e H i gh C o ur t h as h e ld t ha t in t he r e as on s r e c o r d e d , i t h as to b e s pe c i f i c a l l y i n di c a te d a s t o w h i c h m a te r i a l f a c t a s f a c t s w as / w e r e n o t d is c lo s e d b y t h e a s s e s s e e i n th e or i gi n a l a s s e s s m e nt pr oc e e d in g s . Th e r e l e v a nt fi nd i n g gi v e n by c ou r t i s a s u n d e r : 1 2 . I t i s c l e ar t h at t h e e s c ap e m e n t o f i n c om e b y it s e l f i s n ot s uf f i c i e nt f or r e o pe n i ng t h e as s e s s m e n t i n a c as e cov e r e d by I.T.A. No.283/Del/2021 8 t h e f i r s t p r ov i s o t o Se c t i on 1 47 of t h e s a id A c t unl e s s a n d u n ti l t he r e i s f a i l u r e o n t h e pa r t of t h e a s s e s s e e t o di s c l o s e f u l l y a n d t r ul y a ll t h e m a t e r i al f a c ts ne c e s s a r y f or a s s e s s m e n t . I n t he p r e s e n t c a s e , it ha s n o t b e e n s pe c i f i c al l y i n di c a t e d a s t o w h i c h m a t e r i al f ac t or f a c ts w a s / w er e n ot d i s c l o s e d b y t he p e t i t i o ne r i n t he c o ur s e o f i t s ori gi n al a s s e s s m e n t u n de r Se c t i on 1 43 (3 ) of t h e s a id A c t ... . . In t h e c as e o f G l o ba l S i g n al C a b l e s (I n di a ) P o t . Lt d . > D C I T (2 0 1 5 ) 5 4 t ax m a n n. c o m 1 1 4 ( D e l ) t he H on 'b l e H i g h C ou r t ha s ag ai n h e l d t h a t w he r e i t w as no t s p e c i f i e d i n t h e re as o n s a s t o w h at w a s t h e m at e r i a l f ac t s n o t di s c l o s e d b y a s s e s s e e , th e n o t i c e w / s 1 4 8 w a s h e l d t o be i n v al i d . In t he c a s e o f C a l c ut t a D i s c o u n t C o . L t d . us I T O (1 9 61 ) 4 1 I T R 1 9 1 (S C ) , t he A pe x C o u r t h e l d t ha t o n c e t h e a s s e s s e e h as d i s c l os e d al l pr i m ar y f ac t s , h i s d u t y e nd s a nd i t i s f or t he a s s es s i n g o f f i c e r t o dr a w t h e p r o p e r c o n c lu s i o ns f r o m i t . If th e w r o ng co n c lu s i o n w a s dr a w n , t he n i t i s n o g r ou n d f or r e o pe n i n g a n a s s e s sm e n t. B e c au s e th e a s s e s s i n g a ut h or i t y p r e v i o us l y h e l d an ot h e r o pin i on a s t o t he le g a l e f f e c t o f c e r t a i n pr i m ar y f a c t s , a n d t he a s s es s i n g a ut h or i t y la t e r on to o k a d i f f e r e nt v ie w , t he r e do e s no t e x i st an y gr o u nd f o r s uc h r e o pe n i ng . In a r e c e nt d e c i s io n o f D e l hi I T A T i n t he c as e o f P R A B H U D A Y A L A G G A R W A L V E R SU S A C I T , 20 18 (7 ) T MI 5 9 - I TA T D E L H I t he r e op e ni n g w a s he l d t o be b a r r e d b y l i m i t at i o n w h e r e t h e or i gi n al as s e s s m e n t w a s c o m p l e t e d w /s 1 4 3 ( 3 ) an d c a s e w a s r eo p e ne d af t e r th e e x pi r y of 4 y e a r s f r o m t h e e nd o f t h e r e l e v an t a s s e s s m e n t y e a r s . In t hi s c a s e a l s o t h e r e o pe n i n g w a s d on e o n t h e ba si s o f l o s s du e t o al l e g e d c l i e nt c o de m od i f i c a t i o n . In v i e w o f t h e a bo v e , i t i s s u bm i t te d t h a t no t i c e i s s ue d w / s 1 4 8 of th e A c t i s b a r r e d b y l i m i t at i o n . II . Th e r e a s on s r e c o r d e d u n de r s e c ti o n 14 8 o f t h e A c t c a nn o t be c on s t r u e d as " r e a s o ns t o be l i e v e " t h at a n y i n c om e of t he as s e s s e e ha d e s c ap e d a s s e s s m e n t , w hi c h i s a c on d it i o n pr e c e de nt f o r in i t i at i n g r e as s e s s m e n t pr oc e e d i ng s . It i s t h e r e s pe c t f ul s u b m i s s i on o f t h e a p pe l l a n t th a t a s s e s s m e nt in i t i at e d u n d e r s e c t io n 1 47 a n d th e i m pu gn e d a s s e s sm e n t o r d e r un de r s e c ti o n s 14 7 /1 4 3 ( 3 ) of t h e A c t i s w i t ho u t j u ri s d i c ti o n , il l e g al an d b a d i n l aw . S e c t i on 1 47 o f t h e A c t a ut h o r i z e s an d pe r m it s a n as s e s s i n g of f i c e r t o a s s e s s o r r e a s s e s s i n c o m e c ha rg e ab l e t o t a x i f an d on l y i f h e h a s r e a s o n t o be l i e v e ' t h at an y i n c om e f or a ny as s e s s m e n t y e ar ha s e s c a pe d a s s e s s m e n t . Se c t i on 1 47 o f th e A c t e m p ow e r s t h e a s s e s s i n g of f ic e r t o i n i t i at e pr o c e e di n g s u n de r t h at s e c t i o n t o a s s e s s or r e a s s e ss an y i nc o m e of I.T.A. No.283/Del/2021 9 th e a s s e s s e e t h at e s c ap e s a s s e s s m e n t. T h e p ow e r s t o in i t i at e pr o c e e di n g s u nd e r s e c t i o n 14 7 o f t he Ac t ar e , ho w e ve r , n ot un f e t te r e d a n d u nr e s t r i c t e d. I n o r de r t o i n i ti a t e pr o c e e di n gs u nd e r s e c t io n 14 7 , t h e as s e s s i n g of f i c e r ha s t o c om pl y w it h t he p r o v i s i on s of s e c t i on 1 4 8 t o 1 5 3 o f t h e A c t . U nd e r t he s c h e m e o f t h e A c t , t he as s e s s i n g o ff i c e r c an i ni t i at e p r oc e e d i ng s un d e r s ec t i o n 1 4 7 o f t he A c t o nl y if he h as " r e a s o ns t o b e li e v e " t ha t a ny i nc o m e of t he as s e s s e e ha s e s c a pe d as s e s s m e nt . I n t e r m s o f s e c t i on 14 8 o f t he A c t , t he as s e s s i n g o f f i c e r i s r e qu i r e d t o r e c o r d t he r e a s o ns o n t he ba s i s o f w h i c h p r o c e e d i ng s un d e r s e c t io n 1 4 7 o f t h e A c t a r e in i t i at e d . T he r e as o n s r e c o r d e d m u s t s h o w ap pl i c a t io n o f m i n d by th e a s s e s s i ng o f f i c e r t o c om e t o t h e b e l i e f t ha t a ny i n c o m e o f t he as s e s s e e ha d e s c a pe d as s e s s m e n t , a n d t hu s a c t s a s the s t e p pi n g s t on e i n i n i t i a t i o n of p r o c e e d i n gs u n de r s e c t i o n 1 47 o f t h e A c t . T he v al i d it y o r o t he r w i s e o f th e p r oc e e d i ng s i n i ti a t e d u n de r s e c t i o n 1 4 7 is ad j u d g e d o n th e b as i s of s u c h r e a s on s r e c o r d e d . Th e r e a s o ns r e c or d e d m us t, t h e r e f or e , s h o w a pp l i c at i o n o f m i nd by th e a s s e s s i ng o ff i c e r . If t h e r e a s on s r e c o r d e d ar e v a g ue o r am bi g uo us , t h e p r o c e e d i ng s i ni t i at e d u n d e r s e c t i on 1 4 7 o f t h e A c t ar e l i a bl e t o be h e l d a s i n v a l i d an d ba d i n l a w . Yo u r h on ou r ' s k i n d a t t e nt i o n i n t h is r e ga r d i s i n vit e d t o t he fo l l o w i n g d e c i s i on s e x p l ai n i n g t he m e a n i n g of ' r e ason s t o be l i e v e Th e S u p r e m e C o ur t i n t he c a s e Sh e N a t h S i n g h v s . AC I T : 8 2 I T 14 8, c o n s t r u i n g t he e x p r e s s i o n r e as o n t o b e l i e v e ' , o b s e r v e d : " T h e r e c an b e no m a n n e r o f d ou bt t h at t h e w or d s " re as o n t o be l i e v e " s u g ge s t t h a t t he be l i e f m u s t b e t h a t of a n h on e s t a n d r e as on ab l e p e r s o n b as e d u p o n r e as o n a b l e g r o un d s a nd t h at t he In c o m e -t a x O f fi c e r m a y ac t o n d i r e c t o r c i r c u m s t a n ti a l e v i d e nc e bu t no t on m e r e s u s p i c i o n , g o s s i p o r r u m o ur . T he I nc o m e - t ax O f f i c e r w o u l d b e a c t in g w i t h ou t j u r i s d ic t i o n if th e r e a s o n f o r h i s be l i e f t h a t t he c on d i t i o ns a r e s at i s f i e d d oe s n ot ex is t o r i s n ot m a te r i a l o r r e l e v an t t o t h e be l i e f r e q u i r e d b y th e s e c t i on . T h e c ou r t c an a l w a y s e x a m i n e t h i s a s p e c t t h o u gh t h e d e c l a r a t ion o r s uf f i c i e n c y of th e r e as o n s f o r t h e b e l i e f c an no t b e i n v e s t i g a t e d by th e c o ur t . " (e m p h as i s s u p p li e d ) In G a n g a S a r a n & So n s (P ) L t d u s . I T O : 1 3 0 I TR 1 , 1 1, T he i r Lo r ds h i p s o f t h e a pe x C ou r t o bs e r v e d : " T h e i m p or t a n t w o r d s un d e r s . 1 47 (a ) a r e " h a s r e a so n t o b e l i e v e " an d t h e s e w or d s a r e s t r o ng e r t h a n t he w o r d s " i s s ati s f i e d " T he be l i e f e nt e r t a i ne d by t h e I TO m u s t no t be a r b i t r ar y o r i r r at i o na l . It m u s t b e r e a s o n ab l e o r in ot h e r w o r d s i t m u s t b e b a se d o n r e as on s w h i c h a r e r e le v a nt an d m at e r i a l . Th e c o ur t , of c o urs e , c an n ot in v e s t i g at e i nt o t he a de q u ac y or s u f i c i e n c y o f t he r e a s o ns w h i c h ha v e w e i g h e d w i t h t h e I T O i n c o m i n g t o t he be l i e f , b ut t h e c ou r t I.T.A. No.283/Del/2021 10 c an c e r t ai n l y e x a m i n e w h e t h e r t h e r e a s o n s ar e r e l e va nt a nd h a v e a he a r i n g o n t he m a t t e r s i n r e g a r d t o w h i c h h e i s r e qui r e d t o e nt e r t a i n th e b e l i e f be f o r e h e c a n i s s u e n ot i c e u n de r S . 14 7 ( a ). If th e r e i s n o r a t i o n al a nd i nt e l l i g i b l e n e x u s be t w e e n t he r e a s o n s a n d th e be l i e f , s o t ha t , o n s uc h r e a s o n s , n o o ne p r op e rl y i n s t r u c t e d o n fa c t s a nd l a w c o ul d r e as on a bl y e nt e r t a i n t h e b e l i e f, t h e c o nc l u s i o n w o ul d b e i n e s c a pa bl e t h at t h e I TO c ou l d n o t h a v e r eas o n t o b e li e v e th a t a n y pa r t of t h e i n c om e of t he a s s e s s e e ha d e s ca p e d a s s e s s m e nt an d s u c h e s c a p e m e n t w a s by r e as o n o f t he om i s s i o n or f a i l u r e o n th e pa r t o f t he a s s e s s e e t o d i s c l os e f u l l y a nd tr uly a l l m a t e r i al fa c t s a nd t h e no t i c e i s s ue d by h i m w o u l d be l i a bl e t o b e s tr uc k do w n a s i nv a l i d . " (e m p h as i s s up p l ie d ) Th e G uj a r a t H i gh C ou r t i n t he c a s e o f B i r la V X L u s. A C I T : 2 1 7 I TR 1 h e l d t ha t t h e r e as on s r e c or de d s h o ul d c l e a r l y r e fl e c t t he r e as on i ng o f t h e as s e s s i n g of f i c e r t o a r r i v e a t a be li e f , ob s e r v i n g as u n de r : " A no t he r r e q u ir e m e n t w hi c h i s n e c e s s a r y f or a s s u m in g j ur i s di c t i o n is t ha t t h e As s e s s i n g O f f i c e r s h a l l r e c o r d hi s r e ason s f o r i s s u i n g no t i c e . T h i s r e qu i r e m e n t ne c e s s ar i l y p o s tu l a te s th at be f o r e t he A s s e s s i n g O f f i c e r i s s at i s f i e d t o a c t u n de r t h e a f or e s a i d p r o v i s i on s , he m u s t p ut i n w r i t i n g a s t o w hy i n hi s o p i n i on or w h y he h o l d s t he be l i e f t h at i nc o m e h a s e s c a p e d as s e s s m e n t . " W h y f o r ho l di n g s u c h be l i e f m u s t be r e f l e c t e d f r o m t h e r e c or d o f r e as o n s m a de b y t he A s s e s s i n g O f f i c e r . In a c as e w he r e t h e A s s e s s i n g O ff i c e r h o l d s t h e op i ni o n t h a t be c a u s e o f e x c e s s i v e l os s or de p r e c i ati o n a l l o w a nc e in c o m e h a s e s c a p e d as s e s s m e n t , t h e r e as o n s r e c or d e d b u t he A s s e s s i n g O f f i c e r m us t di s c l o s e by w h at p r o c e s s of r e as o n i n g he ho l ds s u c h a b e li e f t h at e x c e s s iv e l o s s or de p r e c i at i o n a l l o w a nc e ha s b e e n c om pu t e d i n t he o r i g i na l a s s e s s m e n t. M e r e ly s a y i n g t h a t e x c e s s i v e lo s s or de p r e c i at i o n a l l ow a n c e h as be e n co m p u t e d w i t h ou t di s c l o s i n g t h e r e a s o n s w h ic h l e d t he a s s e s si n g a u t ho r i t y t o ho l d s u c h a b e l i e f , i n ou r o p i ni o n, d oe s no t c o n fe r j u r i s d i c t i o n o n th e A s s e s s i n g O f fi c e r t o t a k e a c t i on u n d e r s e c t i o ns 1 47 an d 1 48 of th e A c t . . . . . (e m p h as i s s u p p l i e d ) F r o m t h e " r e a s o n" r e c o r d e d fo r t he i s s u e d of no t i ce w / s 1 4 8 , i t i s e v i d e nt t ha t t he s am e c an n ot b e c o ns t r uc t e d as " r e as o ns t o be l i e v e " . T h e r e a s o n s r e c or de d b y t he A . O . a r e m e r el y s u s pi c i o n, c on j e c t u r e a nd s ur m i s e s . T h e r e i s di f f e r e n c e b e t w e en " r e as on t o be l i e v e " an d " r e a s o n s t o s u s pe c t " a n d t he c as e c a nno t b e r e op e n e d on t h e b a s i s of T he H o r b l e D e l hi H i g h C ou r t i n t h e c as e o f Sa b h In f r a s t r uc t u r e Lt d . V e r s u s A s s t . C o m m i s s i o ne r o f Inc o m e T ax i t s de c i s i o n d a te d 2 5/ 0 9 / 2 91 7 ha s h e l d a s u n d e r : (i i ) t he r e a s o ns t o b e l i e v e ou gh t t o s p e l l o u t al l t h e r e a s o n s a n d I.T.A. No.283/Del/2021 11 gr o u nd s av a i l ab l e w i t h t h e A Q f o r r e -o p e n i ng t he a ss e s s m e nt e s pe c i a l l y i n t ho s e c as e s w he r e t he f i r s t p r o v i s o to Se c t i o n 1 4 7 i s at t r a c t e d. Th e r e a s o ns t o b e l ie v e ou gh t t o a l s o p a rap h r a s e a ny in v e s t i g at i o n r e po r t w hi c h m a y f o r m t he b as i s o f t he r e as on s a n d an y e nq u ir y c on du c t e d b y t h e A O o n t h e s a m e a n d i f s o , t he c on c l us i o ns t he r e o f ; (i i i ) w h e r e t h e r e a s o ns m a k e a r e f e r e n c e t o an o t her do c u m e nt , w h e t he r as a l e t t e r o r r e p or t , s uc h d o c u m e nt a n d o r r e l e v a nt po r t i on s o f s u c h r e p o r t s h ou l d b e e n c l o s e d al o ng w it h t h e r e as on s ; In a r e c e n t c as e of P r . C I T v . Me e n ak s hi O v e r s e as P v t . L td . (2 0 1 7 )( 5 ) T M I 1 42 8 , D e l hi , r e o pe n i n g w / s 1 4 8 w a s m ad e on t he ba s i s o f in f o r m a t i o n r e c e i v e d f or m i nv e s t i g at i o n w ing . Th e H o n’ bl e H i gh C ou r t h e l d t h a t s uc h r e o pe n i ng w h i c h w a s b a s e d m e r e l y o n th e i nf o r m a t i on r e c e i v e d f r o m In v e s t i g at i o n. Wi n g wi th o ut in d e pe n de n t a p p li c a t i on of m i n d b y A . O . a m o u n t e d t o " b o r r o w e d s at i s f a c t i on " a nd s u c h r e o p e n i n g w a s l i ab l e t o b e qu a s he d . In t h e c a s e of C o r o n a t i on A g r o I nd u s t r i e s Lt d. v s D C I T ( W . P . N o , 26 27 / 2 01 6 ) , h a v i n g s i m i l a r f ac t s a nd c i r c u m s t a n c e s t h e B o m b ay H i gh C o u r t v i d e i t s d e c i s i o n d at e d 2 8 . 11 . 20 1 6 h as he l d t h at , r e op e n in g w / s 14 8 w as n o t j u s t i fi e d m e r e l y b e c au s e t he r e w as l o s s in c u r r e d du e t o c l i e n t m o d i f i c at i o n c o de . II I. Th e r e as s e s s m e n t p r o c e e d i n gs ar e l i a b l e t o be q u as h e d as no s an c t i o n u s 1 5 1 of t h e A c t ha s b e e n p r o v i d e d . C o nc l u s i o n F or t h e r e as o n s di s c u s s e d he r e i n a b o v e , i t i s r e s p ec t f u l l y p r a y e d th a t t h e a s s e s s m e n t o r d e r pa s s e d by t h e as s e s s i n g of f ic e r u nd e r s e c t io n s 1 47 / 14 4 of t h e Ac t c a l l s f o r be i n g q u as h e d. 7. 4 F i n d i ng o f G r o un d of A p pe a l N o . 2 : a ) I h av e c ar e fu l l y c o n s i de r e d t he f a c ts of t he c as e , r e a s on s r e c or de d by A O f o r i s s ue o f no t i c e u / s . 1 4 8 o f t h e A c t , ob s e r v a t i on s of t h e A . O . m a de i n th e a s s e s s m e nt o r d e r , t he s u b m is s i o n o f t he ap pe l l a nt a n d t he c a s e la w s r e li e d u po n b y t he ap pel l a nt . H e r e i t w i l l b e r e le v a n t t o r e p r o du c e t h e r e a s o n s r e c o r d e d by t he A . O f o r is s u e of n o t i c e u / s 14 8 of t h e A c t , w h i c h a r e a s u nd e r : - " R e as o n s f o r t he be l i e f th a t t h e i n c o m e h ag e s c ap ed a s s e s s m e nt i n th e c a s e O f S hr i N e e r a i K u m a r S in g h a l P r o p M / s . S y st e m s & E qu i pm e nt M ai n t e n a nc e C o. P A N A A T P S 35 4 6 G f o r A . Y . 2 0 0 9 - 10 Th e de p ar t m e nt i s i n p os s e s s i o n o f i n f o r m at i o n t h at s o m e b r o k e r s ha d m i s u s e d c l i e nt c o d e m o d i f i c a t io n f ac i l i t y (i n sh or t " C C M " ) t o tr an s f e r l o s s a n d p r o f i t s o n a c c o u nt o f s h a r e t r a nsac t i o n s f r o m o ne I.T.A. No.283/Del/2021 12 c li e n t t o t h e ot h e r . T h e lo s s e s pr of i t s w e r e s h if t ed t o r e d u c e t h e t ax li a b i li t y i n t h e ha n d s of e i t h e r t he o r i g i na l c l i e nt o r m o d i f i e d c li e n t . T h e i n f or m at i o n r e c e i v e d i n t he c a g e of th e a s s e s s e e i s a s un de r : P A N o f B e n e f i c i a r y C l i e n t N a m e o f t h e B e n e f i c i a r y C l i e n t A d d r e s s o f B e n e f i c i a r y N a m e o f B r o o k e r F Y . 2 0 0 8 - 0 9 W h e n O r i g i n a l C l i e n t ( A s c e r t a i n e d P r o f i t S h i f t e d O u t ) ( i n R s W h e n M o d i f i e d C l i e n t ( A s c e r t a i n e d P r o f i t S h i f t e d O u t ) ( i n R s N e t r e d u c t i o n i n I n c o m e d u e t o C C M ( i n R s . ) A A T P S 3 5 4 6 G S y s t e m & E q u i p m e n t m a i n t a i n a n c e C o . ( P r o p . N e e r a j K u m a r S i n g h a l ) 1 3 1 - A G C R E n c l a v e D e l h i - 1 1 0 0 9 2 A T o Z S t o c k T r a d e P r i v a t e L i m i t e d 1 0 3 9 0 2 3 0 - 7 7 6 6 8 0 7 . 5 - 1 8 1 5 7 0 3 7 . 5 Th e i n f o r m at i o n r e c e i v e d w a s e x am i ne d w i t h r e f e r e nc e to t he r e t ur n o f i nc o m e f i l e d b u t h e a s s e s s e e . O n p e r u s a l of t h e I T f i l e d by th e as s e s s e e an d f r o m t h e e x a m i na t i on o f t he a bo v e i n f or m a t i o n , i t is e v i d e nt t h at t hr o u gh c l ie n t c od e m od i f i c at i o n, a n e t r e du c t i on of in c o m e t o t h e t un e o f R s . 1 , 8 1 , 5 7, 0 3 7. 5 / - h as t a k e n p l ac e i n t he c as e o f t he a s s e s s e e , r e d uc i n g t a x l i ab i li t y i n F Y 2 0 0 8 - 0 9 . In v i e w of t he ab o v e m e n t i on e d f a c t s a n d e v i de n c e s g a t he r e d , I ha v e r e as o n s t o b e l ie v e t h at i nc o m e t o t h e t un e of R s 1, 8 1 , 57 , 03 7 . 5 / - c h ar ge a bl e t o t ax h a s e s c a pe d a s s e ss m e n t a n d th i s in c o m e n e e ds t o be a s s e s s e d/ r e as s e s s e d u/ s . 1 47 o f t he A c t . If ap pr ov e d , n o t i c e u/ s 14 8 o f t he A c t m ay b e i s s u e d . Su b m i t te d f or k i nd a p p r ov a l p le a s e " (b ) Th e u n di s p u te d f a c t i s t h at t he or i g i na l a s s e ss m e n t i n t h e c a s e of a p p e l la n t w a s c o m pl e t e d u s 1 4 3 (3 ) o f th e A c t o n 27 / 12 / 20 1 1 , N e i t h e r i n t h e r e as o n s r e c or de d no r i n th e i m p ug n e d a s s e s s m e nt or d e r u s 1 4 7/ 1 43 (3 ) , t he r e is r e f e r e n c e to t h e af o re s a i d or d e r pa s s e d u / s 1 4 3 ( 3 ) o f t h e A c t . I n t h e r e a s on s r e c or de d , t h e r e i s n o al l e g at i o n by t h e A . O t h at t he r e w as a n y f ai l u r e on th e p a r t of t he as s e s s e e t o d i s c l os e f u l l y a n d t r u l y a l l m at e r i a l fa c t s n e c e s s a r y f o r th e a s s e s s m e nt . It i s s e e n t h at H o n b l e IT A T D e l hi B e nc h ha s d e c i de d a c as e b as e d on i d e nt i c a l f a c t s i n P r ab hu D a y a l A g g ar w a l V s . A C IT , C i r c l e - 59 (1 ) , D e l h i ( 2 0 1 8 ) ( 7 ) TM I 5 9 (I T A T D e l hi ) d a te d 29 . 06 . 2 0 1 8 ( I n th e s a i d c as e t he r e o p e ni n g w a s d o n e o n ba s i s o f i nf o r m at i o n r e c e iv e d f r o m t he I nv e s t i g at i o n W i ng ab o ut c l i e nt co de I.T.A. No.283/Del/2021 13 m o di f i c at i o n. T he H on ' b l e I T A T h e l d t h at r e o p e ni n g to b e b ar r e d by t i m e l i m i t at i o n w h e r e o r i g i n a l a s s e s s m e nt w a s c om p l e t e d u s 14 3 ( 3 ) a nd c a s e w as r e o pe n e d a f t e r e x p i r y of 4 y e a rs f r o m t h e e nd of r e l e v a n t A Y . I t w as h e l d t h at t h e r e i s n o a l l e gat i on o f a ny fa i l u r e o n p a r t o f t h e as s e s s e e t o di s c l o s e f ul l y an d t r u l y al l m a te r i a l f ac t s n e c e s s ar y f o r c om pl e t i o n of a s s e s s m ent f o r w h i c h in c o m e h as e s c a p e d a s s e s s m e n t. d ) Th e A O i n t h e p r e s e n t c as e an d i n t he c a s e of Pr ab h u D a y al A gg a r w a l (a s ou t l i n e d i n p ar a 7. 4 c ab ov e ) w a s s a m e i e . A C I T, C i r c l e - 59 ( 1 ) , N e w D e l h i . Th e r e a s o ns r e c o r d e d i n t he p r e s e n t c a s e an d in t h e c as e of P r ab hu D a y a l A gg a r w a l w e r e r e c o rde d b y t he s am e A O . Th e r e as o n s r e c or de d i n t he p r e s e n t c as e and i n t h e c a s e of P r a b h u D a y a l A g g a r w al a r e i de n t i c al i n fa c t v e r bat i m e x c e pt f o r th e n am e a nd f i gu r e s a s o ut l i ne d i n p a r as 7 . 4 (a ) a nd 7 . 4 (e ) o f th i s or d e r . T h e A Y i nv o l v e d i n bo t h t h e c a s e s i s s a m e i .e . A Y 2 0 0 9- 10 . In bo t h t h e c a s e s t h e o r i g i na l a s s e s s m e n t w a s c o m ple t e d u / s . 14 3 ( 3 ) of t he A c t a n d i n b ot h t h e c a s e s t h e A O h a s n ot m e n t i o n e d an y t hi n g a bo u t s u c h o r d e r p as s e d i n t h e r e a s on s r e co r de d t o r e op e n t h e c a s e us 1 4 7/ 1 4 8 n or i n t h e o r d e r p a s s e d u/ s 1 4 3 ( 3 ) r . w . s 14 7. T he s e f a c t s s h ow t h at t h e f a c t s o f t h e pr e s e nt c a s e an d t he c as e o f P r a bh u D a y a l A g g a r w al a r e i de n t i c al . e ) T h e r e as o n s r e c or d e d i n th e p r e s e nt c as e a nd i n c as e o f P r ab h u D a y a l A g ga r w al w e r e r e c or d e d by t he s am e A O i e . A C IT , C i r c l e - 59 (1 ) , N e w D e lh i r e a s o n s r e c o r de d i n b ot h c as e s a r e i d e nt i c al i n fa c t v e r b at i m e x c e p t f o r t h e na m e a n d f ig u r e . T h e re as on s r e c o r d e d in pr e s e nt c as e a r e ou t l in e d i n P a r a 7 . 4 (a ) of t his o r de r . T he r e as on s r e c or de d i n t he c as e o f P r a b hu D a y a l A gg a r wa l a r e r e pr od uc e d a s un d e r :- " T h e d e pa r t m e n t i s i n p o s s e s s i o n o f i n f or m at i o n t hat s o m e b r o k e r s ha d m i s u s e d c l i e nt c o d e m o d i f i c a t io n f a c i l i t y (i n sh or t " C C M " ) t o tr an s f e r l o s s a n d p r o f i t s o n a c c o u nt o f s h a r e t r a nsac t i o n s f r o m o ne c li e n t t o t he o t he r . Th e l os s e s / p r of i t s w e r e s hi f te d t o r e du c e t he ta x l i a bi l i t y i n t h e h a n ds of e i t h e r t h e o r i gi n a l cl ie n t o r m o d i f i e d c li e n t . T h e i n fo r m at i o n r e c e i v e d i n th e c a s e o f t he a s s e s s e e i s a s un de r : P A N o f B e n e f i c i a r y C l i e n t N a m e o f t h e B e n e f i c i a r y C l i e n t A d d r e s s o f B e n e f i c i a r y N a m e o f B r o o k e r F Y . 2 0 0 8 - 0 9 W h e n O r i g i n a l C l i e n t ( A s c e r t a i n e d P r o f i t S h i f t e d O u t ) ( i n R s W h e n M o d i f i e d C l i e n t ( A s c e r t a i n e d P r o f i t S h i f t e d O u t ) ( i n R s N e t r e d u c t i o n i n I n c o m e d u e t o C C M ( i n R s . ) A C B P A 0 0 6 9 J P r a b h u D a y a l A g g a r w a l G - 4 7 , P r e e t V i h a r , D e l h i - 1 1 0 0 9 2 A m r a p a l i A a d y a T r e n d i n g & I n v e s t m e n t 1 , 3 7 , 8 6 , 2 9 8 . 4 - 2 4 , 8 9 , 5 2 7 . 5 1 , 6 2 , 7 5 , 8 2 5 I.T.A. No.283/Del/2021 14 P v t . L t d . Th e i n f o r m at i o n r e c e i v e d w a s e x am i ne d w i t h r e f e r e nc e to t he r e t ur n o f i nc o m e f i l e d b y t he a s s e s s e e . O n p e r u s a l of t h e I T f i l e d by th e as s e s s e e an d f r o m t h e e x a m i na t i on o f t he a bo v e i n f or m a t i o n , i t is e v i d e nt t h at t hr o u gh c l ie n t c od e m od i f i c at i o n, a n e t r e du c t i on of in c o m e t o t h e t u n e of R s . 1 , 6 2 , 7 5, 8 2 6/ - h a s t ak e n pl a c e i n t h e c a s e of t h e as s e s s e e , r e d u c i n g ta x l i ab i l i t y in F Y 2 0 08 -0 9 . In v i e w o f t h e ab ov e m e n t i o n e d f a c t s a nd e v i d e nc e s g a t he r e d , ' h av e r e as on s t o be l i e v e t ha t i n c om e t o t h e t u ne o f R s 1 ,6 2 , 7 5 , 82 6 / - c ha r g e ab l e t o t ax h a s e s c a p e d a s s e s s m e n t a nd t hi s in c o m e ne e d s t o be a s s e s s e d / r e a s s e s s e d w / s 1 47 of t h e A c t . If a p p r ov e d, n o t i c e w / s 14 8 o f t h e A c t m ay b e i s s u e d. Su b m i t te d f or k i nd a p p r ov a l p le a s e . " f ) P e r u s al o f a b ov e f ac t s s ho w t h at t h e r e a s o n s r ec or de d i n t he pr e s e nt c as e a n d t h e r e a s o ns r e c or d e d i n c as e o f P rab h u D a y al A gg a r w a l w e r e i de n t i c al i n f a c t v e r b at i m (e x c e p t nam e an d f i g ur e ) an d b o t h w e r e r e c o r d e d b y t he s a m e A O i . e . A C I T, C ir c l e - 5 9 ( 1 ) , D e l hi . T he G r ou n d o f ap pe a l i n t h e c as e o f P r a bh u Da y a l A g g a r w al w a s " I n i ti a t i n g p r o c e e d i n gs u/ s 14 7 / 1 4 8 o f IT A c t w i t h o ut th e r e be i n g c o g e n t m a t e r i a l l e a di n g t o t h e b e l ie f o f e s c ape m e n t of in c o m e " . Th i s G r o un d o f ap pe a l i s s i m i l a r t o t he G ro u nd of a pp e al N o . 2 r a i s e d i n t h e p r e s e n t a p p e a l . T h e H o w 'b l e I T AT D e l h i in t he c as e of P r a bh u D a y al A g g a r w a l f o r A Y . 2 00 9- 1 0 v id e o r d e r d a t e d 29 . 0 6 . 2 01 8 he l d as u n de r : " 30 . W e ha v e c o ns i d e r e d t he r i v a l a r g u m e n t s m ad e b y bo t h t he s i de s , pe r u s e d t he o r d e r s o f t he a u th o r i t ie s be l o w a n d t h e P ap e r B oo k f i l e d on be h al f of th e a s s e s s e e . W e h a v e a ls o c on s i d e r e d t he v ar i o u s d e c i s i o n s c i t e d b e f o r e u s . We f in d t h e o r i gi n a l a s s e s s m e nt in t h e in s t a nt c a s e w as c o m p l e t e d w / s 1 4 3 (3 ) o n 24 .1 2 . 2 0 1 1 c o p y of w h i c h i s pl a c e d a t p ag e 4 3 o f t h e P a p e r B o o k , w h e r ein t he A s s e s s i n g O f fi c e r h ad ac c e p t e d t he r e t u r ne d i nc o m e o f R s . 1, 1 6 , 37 , 35 3 /- . H o w e v e r , it i s v e r y s t r an g e t o n o t e t ha t t he A s s e s s i n g O f f ic e r f o r r e a s o n s b e s t k no w n t o h i m ha s n ot m e n t i o n e d an y t hi n g a bo ut s u c h or de r p as s e d u /s 1 4 3 (3 ) o f th e 1. T . A c t e it h e r in t he n ot i c e i s s u e d u / s 14 8 o r i n t h e or d e r p as s e d u / s . 1 43 (3 ) 1 4 7 . We f i nd d u r i ng t h e c o ur s e o f o r i g i na l a s s e s s m e n t p ro c e e d i n g s , t he as s e s s e e v i d e h i s le t t e r da t e d 0 7. 1 2. 20 11 i n C l a us e N o . - 4 h a d s ub m i t t e d t h e c o p y o f c l i e n t l e dg e r w i t h s e t t le m e nt d e t a i l s f r o m t he s ha r e b r o k e r M/ s . A d i t y a T r ad i ng & I n v e s t m e n t ( P ) Ltd . hi g hl i g ht i n g t h e po r t i on o f s e t tl e m e n t w hi c h c l e a r ly s h ow s t h a t l o s s of R s . 1 , 8 2, 1 0, 4 3 1. 5 4 s ho w n i n t he P r o f i t & L o s s A c cou n t . A c o p y of th e s am e i s p l a c e d at pa ge 3 9 t o 4 1 o f P a p e r B o o k . A f t e r c on s i d e r i ng t h e e l a b or a t e s ub m i s s i o n f i l e d o n 0 7. 1 2. 2 0 11 , t he A s s e s s i n g O f fi c e r h ad c o m p l e t e d t h e a s s e s s m e nt u / s . 14 3 ( 3 ) I.T.A. No.283/Del/2021 15 ac c e p ti n g t he r e t u r n e d i n c om e . A p e r u s a l of t h e r e as o ns r e c o r d e d on 29 . 0 3 . 2 0 1 6 s h o w t h a t t h e r e i s n o a l le g a ti o n b y the A s s e s s i n g O f f i c e r o f a ny f ai l u r e o n t he p a r t of t h e a s s e s s e e t o d i s c l os e f ul l y an d t r u ly al l m at e r i a l f a c t s n e c e s s a r y f o r c o m p l e tio n o f t he as s e s s m e n t . The r e fo r e , i n v i e w o f t h e p r o v i s o t o s ec t i o n 1 47 o f t he I. T . A c t w h e r e t h e o r i gi n al as s e s s m e n t w as c o m p l e t ed u / s . 14 3 (3 ) , no ac t i o n s h a l l be t a k e n u nd e r t hi s s e c t io n af t e r th e e x p i r y o f 4 y e a r s f r o m t h e e n d of t h e r e l e v a nt as s e s s m e n t y e a r u nl e s s a ny in c o m e c ha r g e ab l e t o t ax ha s e s c a pe d as s e s s m e n t on ac c o un t of an y f a il u r e o n t he p a r t o f t h e as s e s s e e t o d i s c l o s e f ul l y a n d tr ul y al l m a t e r i al f a c t s ne c e s s ar y f o r c om p l e t i o n o f th e as s e s s m e nt . H o w e v e r , i n t h e i ns t a n t c a s e , t h e n o ti c e u /s 1 4 8 h as be e n is s u e d o n 31 . 0 3 . 2 01 6 w h i c h i s b e y o n d a pe r i o d o f 4 y e a r s f r o m t h e e n d o f t he r e l e v a n t as s e s s m e n t y e a r i . e . A Y. 2 0 0 9 - 1 0 . A s m e nt io ne d e ar l ie r , i n th e i ns t a n t c a s e t h e a s s e s s m e n t w as c o m p l e t e d w /s 14 3 ( 3 ) o n 24 . 1 2 . 2 01 1 a nd t he r e i s n o a l l e g at i o n of a ny f ai l u re on th e p a r t of th e as s e s s e e t o d i s c l o s e fu l l y an d t r u l y a l l m a t e r ial f a c ts ne c e s s a r y fo r c o m pl e t i o n of t he a s s e s s m e nt f or w hi c h i n c o m e has e s c a p e d as s e s s m e n t . T h e r e f o r e , t he p r o v i s o t o s e c t i o n 1 4 7 is c l e a r l y ap pl i c a bl e t o t he f a c t s o f t he p r e s e n t c as e . S i n c e , t he I d. C I T ( A ) ha s no t a d d r e s s e d t he c as e of t he as s e s s e e f r om t h is a n gl e , th e r e f o r e , h is f i n d i n g on t he i s s ue o f v al i d it y o f r e a s s e s s m e nt pr o c e e di n g s i s i n c o r r e c t a n d n o t in a c c or d a nc e w i t h l a w . We , th e r e f o r e , h o l d t ha t t h e r e a s s e s s m e n t p r o c e e d i ng s ini t i a te d a f t e r a pe r i o d o f 4 y e a r s f r o m t he e nd of t he r e l e v an t as s es s m e n t y e a r w h e r e t he or i gi n al a s s e s s m e nt w a s c o m pl e t e d u / s . 1 43 (3 ) i s b ar r e d by l i m i t a ti o n a n d, t h e r e fo r e , v o i d a bi n i t i o . W e , t he r e f o r e , h o l d t h at s uc h r e a s s e s s m e nt p r o c e e d i n gs i n i t i a t e d b y t he A s s es s i n g O f f i c e r i s ba d in l a w an d v o i d ab -i n i t i o. A c c o r d i n g l y , t he s a me i s q ua s h e d . Si n c e , w e a r e qu a s h i n g th e r e a s s e s s m e nt p r o c e e d i n gs o n ac c o un t of be i n g b ar r e d b y l i m i t at i o n , t h e r e f or e , ot h e r ar gu m en t s ad v a nc e d by th e c ou n s e l fo r t h e s s e s s e e c h al l e ng i n g t h e a d di t i on o n m e r i t be c o m e ac a de m ic i n n at u r e an d t h e r e f or e a r e no t b e in g ad j ud i c at e d . Th e g r o u nd s r a i s e d b y t he a s s e s s e e ar e a c c or di n gl y al l o w e d . " In t h e p r e s e nt c a s e al s o t h e a s s e s s m e nt w a s c o m p l et e d u/ s 1 4 3 ( 3 ) v id e o r d e r d at e d 2 7. 1 2. 2 0 11 . I n t he s ai d o r de r , t he A D h a s m a de di s a l l ow a nc e s o u t o f C ar e x pe n s e s , B us i n e s s P r om ot io n E x p e n s e s , Te l e ph on e E x pe n s e s a n d T r av e l l i n g E x pe n s e s . T he A O ha s n ot m e nt i o ne d a ny t h i n g a bo u t s u c h o r d e r p a s s e d u s 1 4 3 ( 3) n e i t h e r i n th e r e a s o ns r e c or d e d to r e o p e n t h e c a s e o f ap p e ll a nt u / s 1 4 7 / 1 4 8 of th e A c t n o r i n t h e o r d e r p a s s e d u/ s 1 43 ( 3 ) r . w . s 1 47 . P e r u s a l of r e as on s r e c o r d e d s h ow t ha t t he r e i s n o al l e ga t i o n by A O o f a ny fa i l u r e o n p ar t o f ap pe l l a nt t o d i s c l os e f u ll y a n d t r ul y al l m a t e r i al fa c t s n e c e s s a r y f o r c o m p l e t io n o f as s e s s m e n t . T h u s , b y p l ac i n g r e l i an c e o n t h e j u dg m e n t o f H o n ' b l e J u r i s d i c t i o n a l I T A T , D e lh i i n th e c a s e of P r a bh u D ay a l A gg a r w a l V s . A C I T , 59 (1 ) , D e l hi f o r A Y . 20 09 - 1 0 da t e d 2 6 . 09 . 20 1 8 b as e d o n i d e nt i c a l f a c t s it i s h e r e by h e l d I.T.A. No.283/Del/2021 16 th a t i n v i e w o f p r o v i s o t o S e c t i on 1 4 7 of t he I T A ct w h e r e t he or i g i na l a s s e s s m e n t w a s c o m p l e te d u / s 1 43 (3 ) , n o a ct i on s h a ll be ta k e n u/ s 1 4 7 a f t e r e x pi r y o f 4 y e a r s fr om e nd of re le v a n t A Y u n l e s s an y i n c om e c h ar g e a b l e , t o t a x h a s e s c a p e d as s e s s m e nt o n a c c o u nt of f a i l ur e o n p a r t o f t he a pp e l l an t t o d i s c l o s e f ull y a nd t r u l y al l m a te r i a l f a c t s n e c e s s a r y fo r c om pl e t i o n o f a s s e s s m en t I n t he pr e s e nt c as e ( no t i c e u / s 14 8 w a s i s s u e d o n 3 1 . 0 3 . 2 016 w h i c h i s be y o nd pe r i o d o f 4 y e a r s f r o m e nd of r e l e v a nt A Y i .e . A Y . 2 0 0 9- 10 . I n t h e i ns t a n t c a s e , t h e as s e s s m e n t w a s c o m p le t e d u/ s 1 4 3 ( 3 ) on 27 . 1 2 . 2 01 1 a n d t he r e i s n o a l l e g at i o n o f a ny f a il u re o n p a r t o f ap pe l l a nt t o di s c l o s e f ul l y a nd t r u l y a l l m a t e r i a l f a c t s ne c e s s a r y fo r c o m p l e t i o n of a s s e s s m e n t f or w h i c h i n c om e ha s es c a p e d as s e s s m e n t i n t he r e as on s r e c or d e d by t he A O . R e l y ing o n t he ju d g m e nt o f H o n 'b l e J u r i s d i c t io n a l I T A T D e l h i i n t he c a s e of P r ab h u D a y a l A g g ar w a l b as e d o n i d e n t i c al f ac t s i t is he r e b y h e l d th a t r e as s e s s m e n t p r o c e e d i ng s i n i t i at e d af t e r a p e ri o d o f 4 y e a r s fr om t he e nd o f r e l e v an t A Y w h e r e o r i g i na l a s s e s s m ent w a s c om p l e t e d u s 1 4 3 (3 ) i s b a r r e d b y l i m i t at i o n a nd , t he r e f o r e , v o id a b in i t i o. I n v i e w of t he j u di c i a l d i s c i p li n e an d b i n di n g p r e c e de n t s t he r e op e n in g m a d e b y t h e A O u s 1 4 7/ 1 4 8 o f t h e A c t i s he l d t o b e n ot as p e r l aw in v i e w o f t h e j u dg m e n t o f H o n 'b l e J u r i sd i c t i on al I TA T, D e l hi in c a s e o f P r a bh u D a y al A g g ar w a l an d v ar i o u s o t he r c ou r t ju d g m e nt s i nc l u di n g t h at o f H o n 'b le D e l h i H i gh C o u rt a s r e l i e d up on i n t he ap p e ll a nt s s ub m i s s i o n . R e o pe n i ng o f as se s s m e n t u / s 14 7 / 1 4 8 c an n o t b e m a de af t e r e x p i r y of 4 y e ar s f ro m e n d of r e l e v a n t A Y w h e r e o r i g i n a l as s e s s m e n t h a s be e n m ad e us 1 4 3 ( 3 ) of th e A c t w h e r e t he r e i s n o a l l e ga t i o n by t h e A O i n re a s on s r e c o r d e d th a t t he r e w a s a fa i l ur e o n p a r t o f t he ap pe l l a nt to d i s c l os e f ul l y an d t r u l y a l l m a t e r ia l f ac t s n e c e s s ar y f o r c o m pl e t io n of as s e s s m e n t . R e l y i n g o n t h e j u d gm e nt o f H o n ' b l e J u r is d i c t io n al I TA T D e l h i Be n c h on i d e n t i c al f a c t s i n c as e o f P r a bh u D a y al A gg a r w a l Vs . A C I T , C i r c le - 5 9 ( 1 ) , D e l hi ( I n v i e w of j u d i c i al di s c i p l i ne an d bi n di n g p r e c e de n t s ), i t i s he l d t h at s u c h r e as s e s s m e nt p r oc e e d i ng s i ni t i a t e d by t h e A O is b a d i n l a w a n d v oi d a b i ni t i o , t he r e f o r e , t h e s a m e i s q ua s h e d . ” 10 . T he g e ne si s o f t h e c ont r o ve rs y t o w ar d s j ur is d i ct i o n i n t he pr e se nt c a se a r e t h e r e a s on s r e c o r de d u n de r S e c ti o n 14 8 (2 ) o f t he A ct th er e f or e, i t m a y b e r e l e v a n t t o r ep r o d uc e t he r ea so n s r ec or de d fo r r e a dy r e f e re n c e . “R e a s o n s f o r t h e be l i e f t h at t h e i n c o m e h a s e s c a p e d a s s e s s m e nt i n t h e c as e o f S hr i N e e r a j K u m a r S i ng h a l P r o p M / s S y s t e m s & E q u i p m e n t M a i n t e n an c e C o . , P A N A A T P S3 5 46 G f o f A . Y . 2 00 9 : 1 0 Th e d e p a r t m e n t i s i n p os s e s s i o n of i nf o r m a t i on t ha t s o m e br o k e r s ha d m i s u s e d c li e n t c od e m od i f ic a t i on f a c i lit y (i n s ho r t I.T.A. No.283/Del/2021 17 " C C M " ) to t r a n s f e r l o s s an d p r of i t s on a c c ou nt of sha r e tr an s a c t i on s f r o m o n e c l i e n t t o t h e o t he r . T h e l o s se s / p r o f i t s w e r e s hi f t e d t o r e d u c e t h e t ax l i a bi l i t y i n t h e h a n ds o f e i t he r t h e or i gi n al c li e n t o r m o d if i e d c l i e nt . T he i n f o r m a ti o n r e c e i v e d i n t h e c as e of th e a s s e s s e e i s a s u n de r : P A N o f B e n e f i c i a r y C l i e n t N a m e o f t h e B e n e f i c i a r y C l i e n t A d d r e s s o f B e n e f i c i a r y N a m e o f B r o o k e r F Y . 2 0 0 8 - 0 9 W h e n O r i g i n a l C l i e n t ( A s c e r t a i n e d P r o f i t S h i f t e d O u t ) ( i n R s W h e n M o d i f i e d C l i e n t ( A s c e r t a i n e d P r o f i t S h i f t e d O u t ) ( i n R s N e t r e d u c t i o n i n I n c o m e d u e t o C C M ( i n R s . ) A A T P S 3 5 4 6 G S y s t e m s & E q u i p m e n t M a i n t e n a n c e C o . ( P r o p . N e e r a j K u m a r S i n g h a l ) 1 3 1 - A G C R E n c l a v e - - - D e l h i - 1 1 0 0 9 2 A t o Z S t o c k T r a d e P r i v a t e L t d . 1 0 3 9 0 2 3 0 - 7 7 6 6 8 0 7 . 5 - 1 8 1 5 7 0 3 7 . 5 Th e i n f o r m at i o n r e c e i v e d w a s e x am i ne d w i t h r e f e r e n ce to t he r e t ur n o f i nc o m e f i l e d b y t he a s s e s s e e . O n p e r u s a l of t h e I T f i l e d by th e a s s e s s e e a nd f r o m t he e x a m i na t i on o f t h e ab ov e , i n f or m at i o n, i t is e v i d e nt t h at t hr o u gh c l ie n t c od e m od i f i c at i o n, a n e t r e du c t i on of in c o m e t o t he t un e o f R s . 1 , 8 1 , 57 , 0 3 7 . 5/ - h a s t a k e n p l a c e in t he c as e o f t he a s s e s s e e , r e d uc i n g t a x l i ab i li t y i n F Y 2 0 0 8 - 0 9 . In v i e w of t he ab o v e m e n t i on e d f a c t s a n d e v i de n c e s g a t he r e d , I ha v e r e as on s t o be l i e v e t ha t i nc o m e t o t he t u ne o f R s . 1, 8 1 , 57 , 03 7 . 5 / - c h ar ge a bl e t o t ax h a s e s c a pe d a s s e ss m e n t a n d th i s in c o m e n e e ds t o be a s s e s s e d/ r e as s e s s e d u/ s . 1 47 o f t he A c t . If ap pr ov e d , n o t i c e u/ s . 14 8 o f t he A c t m ay b e i s s u e d . Su b m i t te d f or k i nd a p p r ov a l p le a s e . ” 11 . T he ma i n t a i n a b i l i t y o f j ur is d i ct i o n u n de r S e c t io n 1 47 o f t he A ct i s c e nt ra l t o t he co nt ro ve rs y i n t he i ns t a nt case . T he de fe ns e pe d d l e d o n b eh al f o f th e a sse ss e e for l ac k o f j u r i sdi c ti o n u n d e r S ec t i on 1 4 7 o f t h e A ct a re tw o fol d s ; ( i ) t he f o r mat io n o f be l ie ve t ow a r ds a l l e ge d e s c a p e me n t o f in co m e i s cl e a r l y a pr e t e n se w i t h o ut a ny t a ng ib le m a te r i a l a nd w i t h o u t a ny co g e n t a nd cre d i bl e ma t e r i al a nd t h e A sse s s in g O f fi c er h a s p r o c e e d e d o n d ot t e d li ne s i n a me c ha ni c a l ma n n e r ; ( i i ) t h e re a s on s r e c or d e d d o n o t e v e n ma k e a n y re fe r e n c e t o t h e e a rl i er a s s es s m e n t c a r ri e d un de r Se c t i o n 14 3 ( 3 ) o f I.T.A. No.283/Del/2021 18 t he A c t a n d t he a dd i ti on al e m ba r g o p la c e d b y t h e 1 s t pr o v i so t o S ec t i on 14 7 a r e c l e ar l y n ot l i ft e d w he n t h e n ot i ce un de r S ec t i on 14 8 t o a s su m e t he j u r i s d ic t i on a r e c l ea r l y t i me b ar re d. 12 . A t t h e o u t se t , w e n ot i c e i n t h e i ns t a n t c a s e t ha t th e a ss e s s me nt w as ea r l i e r fr a me d u nd e r S ec t i o n 1 4 3( 3 ) o f t h e A c t . Th e n ot i c e un d e r S e c t i on 1 4 8 w a s i s su e d p r o po si n g re - a sse ss m e nt a f te r t he e xp i r y o f f o ur s ye a r fr o m t h e e nd o f t h e A ss e s s me n t Y e ar 20 0 9- 1 0 i n qu e st i o n . T h e F i r s t P ro vi so t o S e ct i on 14 7 o f t h e Ac t i n s uc h a si t u a t i on i m po se s ad d i t io na l f et t e r s on t h e A ss e s sing O f fi c er o v e r a nd a bo v e t h e c o n d i t i o n s s ti p ul at e d i n t he ma i n p r ovi si on t h er eo f. Th e F i r s t P ro v i so ne c es si t a t e s t h a t t h e ac t i on u n der S ec t i o n 1 47 i s pe r m i ss i b l e i n t he ca se o f c o mp l e t ed a sse ss m e n t un de r S e c t i o n 14 3 (3 ) o f t h e A c t a ft e r t h e e x p ir y o f fo ur ye a r s fro m t he e n d o f re l ev an t as se ss m e n t ye ar onl y w h e r e an y i n c o m e c h a rg e ab l e t o t a x ha s e s ca pe d a ss e s s m e n t by t h e r ea so n o f fa i l u re on t h e p ar t o f t he a ss es se e t o i n t e r a l i a di sc l o s e f u l l y a n d t r u l y a ll m a t e r i a l f a c t s ne c es sa r y f o r a s se s s m e nt o f t he r e l e v a n t a ss e s s m e n t y e a r. Th us, t he pr e r e q u i s i te u n d e r F i rst P r o vi so t o e r s t w h il e S ec t io n 1 4 7 e nj oi n s t h a t un l e s s t he re i s a fa i l u re o n t he pa r t o f t he a s se ssee t o d i s cl os e ma t e r i a l fa c t s ful l y a nd tr u l y, t h e re op e n in g a ft e r fo ur y e a r s fr o m t he e nd o f t he a ss e s s me nt y ea r w ou l d b e ba r re d by l i m i ta t i o n a n d th us no t p e r mi s si bl e i n la w . I f, in fa c t, i nc o m e w as f o un d t o be un d e r a s se s s ed b u t sa me w a s n ot a sc ri be d t o a ny f ai lur e or o m i ss io n on t h e pa r t o f t h e a ss es se e t o di sc lo s e m at e r i a l fac t s, t h e r e o p e n i n g i s n ot p os si bl e . T h e not i c e un de r S ec t i on 14 7 w he r e F i r st P r ovi so t o S ec t i on 1 47 o f th e A c t i s i n o pe r at i o n , i s ma de re la ta bl e to s o me o m i s sio ns or de fa ul t s o f t h e a s ses s e e . Wh e n t h e a c ti on o f t he A sse s si n g O f fi c e r i s t e s t ed o n t he t o u c hs t o ne o f e mb a r g o p l a c e d b y F i rst P r ov i so t o S e ct i on 1 47 o f t h e A c t , i t i s c l e ar l y n o t i c e d t ha t t he re a so ns r e c o r d e d d oe s n o t e v e n a l l e ge t h at th e a ss es se e h a s fa i l e d t o I.T.A. No.283/Del/2021 19 di s c l o s e a ny m at e ri a l fa c t r el e v a n t for t h e as s e ss me n t . T he r e - a ss es s m e n t o rd e r p a ss e d u n de r S e c t i on 1 4 7 a l s o d o e s n ot p or tr a y an y c on c e rn o f t he A ss e ss i n g O f fi c e r on t hi s a s pe c t e i th e r. O st e n si bl y, t he c on di t io n st i p u l at e d un de r F i r st P r ov is o t o S e ct i o n 1 4 7 i s n ot c o mp l ie d w i t h a t t h e t hr e s h ol d. I n s u c h e ve nt p r o v isi on o f se c t io n 14 7 o f t h e A c t co u l d no t h a v e b e e n tr i g ge re d. 13 . A t t hi s j u n c t ur e , w e m a y a ls o t o u c h up on t he sub mi ssi on o n be h a l f o f r e v en ue t ha t a f o r ma l al l e ga ti o n o f fa i l ure o n t he pa rt o f a ss es se e i s n ot st r i c t l y n ec e s sa r y w h e re i n su bs t a nc e su c h fa i l u r e i s ot h e rw i se d i sc e rn i bl e fr o m t h e r e a s o ns r e c or d e d. W e a r e n ot i mp re ss ed b y s u c h li n e o f a r gu me nt s . T he r e as o n s for r e o p e n i n g a c o mp l et e d a s se ss m e nt ar e j us t i c ia bl e . T h e fa i l u re att ri b ut ab l e t o a ss es se e t o r e p or t a l l p r i ma r y f a c t s fu ll y a nd t r u ly i s e sse nt i a l i ng r e d i e n t o f F ir st P r ov i so . Th e e x i s t en ce o f s uc h fa i l u re l i f t s t h e e m ba r go o f li m i t a t i o n for r e- op e n i n g t h e c o m pl e t e d a ss e s s me n t be y o n d fo u r y e a rs. T h e A ss es s i n g O f fi c er c a nn o t be ju dge o f hi s ow n c a u se . T he re as o ns n o t e d t h u s s h o ul d f ir s t a l l eg e fa i l u re an d se c o n dl y, a br i e f ba s is g i v i n g r i s e t o s u c h al l e ga ti o n sh o ul d be di s c e r n i b l e fr o m re a so n s re c o rd ed t o e n a b l e t h e a djud ic a t in g a ut ho r i t y to ap pr e c i at e t h e p e r s pe c ti v e o f t h e A s s essi n g O ffi c e r i n t he ma t te r . T he pl e a o f r e v en ue t h u s d o e s n ot h o l d w at e r. 15 . W e a re t h u s i n c o m p l e t e a g re e m e n t w i t h t h e fi r st a p p el l a t e a ut ho r i t y t ha t th e no t ic e u n d e r S e c t i o n 1 48 i s vi t iat e d in la w a n d c on se qu en t r e- as s e ss m e nt p r o ce e d i n g s a re w it h o ut juri sd i c t io n a n d l ia bl e t o b e a n n ul l e d. Th e C I T (A ), i n o u r v i e w , th us ri gh t l y he ld th at t he c on se qu e n t re -a sse ss m e n t o r d e r i s b ad i n l a w a nd t hu s li a bl e t o be st r u c k do w n a n d c a n c e l le d. Wh i le ho l d in g so, w e fi nd s u pp or t fr o m p le t ho ra o f j u di c i a l pr ec e d e nc e h ol d i n g t he fie l d n a me l y, A CIT vs. C E A T Li m i t e d as re po rt e d i n ( 2 0 2 2) 44 9 I T R 17 1 (S C) ; C I T v s. I.T.A. No.283/Del/2021 20 F or a m e r F r a nc e , re p or t e d in 2 6 4 I T R 55 6 (S C ) ; D r . Wi l l m a r S ch w a be I n d i a P vt . L td . vs. A CI T & O r s. , in W. P . ( C) 1 3 38 0/ 2 01 8 j ud g me n t d a te d 17 . 05. 2 02 3 ( D el ); P r. CI T vs. P ra bh u D ay a l A gga r w a l , IT A N o. 1 3 74 /2 01 8 o r de r d at e d 09 . 1 2. 2 0 22 ( D e l ); JS RS U dyo g L t d. an d O rs . v s. IT O , r e por t e d in 31 3 IT R 321 (D e l ). 16 . T he s t a te d po si t i o n o f l a w b e i n g ab un d an tl y cl ea r, w e d o n ot c on si de r i t ne c es sa ry t o go i nt o o th e r as p e ct o f l eg a l c h al l e n ge t o a ss u m e j u r i sd i c t i o n . H a vi ng e n d o r s ed t h e a c t i on o f t he CI T (A ) o n l ac k o f j uri sd ic t i on , w e do n o t c o n si d e r i t n e ce ss ar y t o e x a m i n e t h e a sp e c t s o n me r i t s. 17 . I n t h e re s ul t , th e a p p e a l o f th e R e v e n u e i s di smi ss e d. Order pronounced in the open Court on 13/09/2023 Sd/- Sd/- [SAKTIJIT DEY] [PRADIP KUMAR KEDIA] VICE PRESIDENT ACCOUNTANT MEMBER DATED: /09/2023 Prabhat