Sri Udit Kumar Dugar , Kolkata V. ITO, Ward - 36(4), Kolkata , Kolkata

ITA 799/KOL/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 6887 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 25-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANKAR HALDER
• Assessee Lawyers: S M SURANA
• Keywords: Reopening of assessment; Unexplained investment; Source of fund; Question of law; Tangible material; Accommodation entries; Reason to believe; Reassessment proceedings; Borrowed satisfaction; Set aside
• Section: 143(3); 133(6); 143(1); 147; 148; 263

Judgement Text

1 ITA NO. 799/KOL/2018 SHRI UDIT KUMAR DUGAR, AY 2012-13 , C , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA ( ) . . , . ' # $% % , '( ) [BEFORE SHRI A. T. VARKEY, JM & DR. A. L. SAINI, A M] I.T.A. NO. 799/KOL/2018 ASSESSMENT YEARS: 2012-13 SHRI UDIT KUMAR DUGAR (PAN: ACWPD5996Q) VS. INCOME-TAX OFFICER, WARD-36(4), KOLKATA APPELLANT RESPONDENT FOR THE APPELLANT SHRI S. M. SURANA, ADVOCATE FOR THE RESPONDENT SHRI SANKAR HALDER, JCIT, SR. D R DATE OF HEARING 13.02.2019 DATE OF PRONOUNCEMENT 03.05.2019 ORDER PER SHRI A.T.VARKEY, JM THIS APPEAL OF THE ASSESSEE ARISES OUT OF ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 10, KOLKATA FOR AY 2012-13 DATED 23.03.2018. 2. AT THE OUTSET ITSELF, THE LD. AR OF THE ASSESSEE DREW OUR ATTENTION TO THE LEGAL ISSUE THAT HAS BEEN RAISED BY THE ASSESSEE AS GROUND NO. 2 WHEREIN THE REOPENING U/S. 147/148 OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO A S THE ACT) OF THE AO HAS BEEN CHALLENGED BY THE ASSESSEE, THEREFORE, WE ARE INCLI NED TO ADJUDICATE FIRST THE LEGAL ISSUE RAISED BEFORE US, BECAUSE IF THERE IS MERIT ON THE LEGAL ISSUE THEN IT GOES TO THE ROOT OF THE REASSESSMENT ORDER FRAMED PURSUANT TO REOPENING ITS ELF. 3. THE BRIEF FACTS OF THE CASE NECESSARY FOR ADJUDI CATION OF THE LEGAL ISSUE ARE THAT THE ASSESSEE HAD FILED THE RETURN OF INCOME ON 17.12.20 12 FOR AY 2012-13. ON 30.09.2013 THE TIME PERIOD EXPIRED FOR ISSUANCE OF NOTICE U/S. 143 (2) OF THE ACT, THEREFORE ORIGINALLY, NO SCRUTINY ASSESSMENT WAS FRAMED. THEREFORE, THE RETU RN OF INCOME FILED BY ASSESSEE STOOD 2 ITA NO. 799/KOL/2018 SHRI UDIT KUMAR DUGAR, AY 2012-13 ACCEPTED BY THE DEPARTMENT. THEREAFTER, THE AO ON 28.03.2017 ISSUED NOTICE U/S. 148 OF THE ACT FOR REOPENING THE ASSESSMENT, WHICH PROPOSED AC TION OF AO WAS OBJECTED TO BY THE ASSESSEE ON 21.02.2017, WHICH WAS BRUSHED ASIDE AND THE REASSESSMENT ORDER WAS PASSED ON 27.12.2017. SINCE THE LEGAL CHALLENGE IS IN RESPEC T OF THE VERY ACTION OF THE AO TO INVOKE THE JURISDICTION TO REOPEN THE ASSESSMENT, AS STATE D ABOVE, WE WOULD LIKE TO FIRST DISPOSE OF THE SAID LEGAL GROUND. 4. THE LD. AR ASSAILED THE DECISION OF THE AO TO R EOPEN THE ASSESSMENT BASED ON LETTER FROM THE DIT (INV.), KOLKATA. ACCORDING TO LD. COU NSEL, THE AO WITHOUT APPLICATION OF MIND HAS PROCEEDED TO REOPEN THE ASSESSMENT ONLY ON THE BASIS OF A GENERAL REPORT GIVEN BY THE DIRECTORATE OF INVESTIGATION IN RESPECT OF CERT AIN BOGUS LTCG WHICH WAS NOT RELEVANT TO ASSESSEES CASE. ACCORDING TO LD. COUNSEL, BEFORE T HE AO DECIDES TO REOPEN THE ASSESSMENT, HE HAS TO SATISFY THE CONDITION PRECEDENT TO ASSUME JURISDICTION AND FOR THAT HE TOOK OUR ATTENTION TO THE EXPRESSION USED IN SEC. 147 OF THE ACT WHICH USES THE EXPRESSION THAT AO SHOULD HAVE REASON TO BELIEVE ESCAPEMENT OF INCOME. ACCORDING TO LD COUNSEL, T HE EXPRESSION REASON TO BELIEVE POSTULATES A FOUNDAT ION BASED ON INFORMATION AND BELIEF BASED ON REASONING. ACCORDING TO LD COUNSEL, EVEN A FTER THERE IS A FOUNDATION BASED ON INFORMATION IS THERE, STILL THERE MUST BE SOME REAS ONS WARRANT HOLDING A BELIEF THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. THE LD. AR REMINDED US THAT THE EXPRESSION USED BY PARLIAMENT IS REASON TO BELIEVE WHICH IS STRON GER THAN THE EXPRESSION SATISFIED AND IN THE PRESENT CASE SUCH REQUIREMENT AS CONTEMPLATED B Y LAW HAS NOT BEEN MET IN THE REASON RECORDED BY THE AO BEFORE VENTURING TO RE-OPEN THE ASSESSMENT WHICH VITIATES THE ASSUMPTION OF JURISDICTION BY AO TO REOPEN THE ASS ESSMENT ITSELF. 5. FURTHER, THE LD. COUNSEL SUBMITTED THAT EVEN IF THE INFORMATION GIVEN BY THE DIT (INV.) IS ADVERSE AGAINST THE ASSESSEE, AT THE MOST IT MAY TRIGGER REASON TO SUSPECT ; THEN THE AO HAS TO MAKE REASONABLE ENQUIRY AND COLLECT MATER IAL WHICH WOULD MAKE HIM BELIEVE THAT THERE IS IN FACT AN ESCAPEMENT OF INCOME. WITHOUT DOING SO, THE JURISDICTIONAL FACT NECESSARY TO USURP JURISDICTION TO REOPEN THE REGULAR ASSESSM ENT CANNOT BE INVOKED BY THE AO. FOR THE SAID PROPOSITION, THE LD. AR DREW OUR ATTENTION TO FOLLOWING CASE LAWS: 3 ITA NO. 799/KOL/2018 SHRI UDIT KUMAR DUGAR, AY 2012-13 I) PCIT VS. MEENAKSHI OVERSEAS LTD. 395 ITR 677(DEL .) (REFERRED TO PARA 19 TILL PARA 37). II) DCIT VS. GREAL WALL MARKETING PVT. LTD. ITA NO. 660/KOL/2011 (REFERRED TO PAGE 10 PARA 11) III) SHRI RAJ KUMAR GOEL VS. ITO ITA NO.1028/KOL/20 17 (REFERRED TO PAGE 5-8 PARA 11) (IV) CLASSIC FLOUR & FOOD PROCESSING PVT. LTD. VS. CIT ITA NOS. 764 TO 766/KOL/2014 (PAGE 7 PARA 12 TO 16) V) PCIT VS. SHODIMAN INVESTMENTS (P) LTD. (2018) 93 TAXMANN.COM 153 (BOM) PAGE 4 PARA 12 TO 14) VI) KSS PETRON PVT. LTD. VS. ACIT ITA NO. 224/MUM/ 2014 (REFERRED TO PAGE 3 PARA 8- 11) VII) PCIT VS. TUPPERWARE INDIA PVT. LTD. (2016) 236 TAXMAN 494 (REFERRED TO PAGE 3 PARA 6 AND 9) VIII) DCIT VS. NATIONAL BANK FOR AGRICULTURE AND R URAL DEVELOPMENT ITA NO.4964/MUM/2014 (REFERRED TO PAGE 10- 13 PARA 12) IX) CIT VS. INSECTICIDES (INDIA) LTD. (2013) 357 IT R 330 (DEL.) X) HONBLE CALCUTTA HIGH COURT IN THE CASE OF PR. C IT VS. G4G PHARMA INDIA LTD. IN ITA 545/2015 VIDE ORDER DATED 08.10.2015 (PARA 12 A ND 13) 6. THE LD. AR DREW OUR ATTENTION TO THE DECISION OF THE HONBLE HIGH COURT OF DELHI IN ACIT VS. MEENAKSHI OVERSEAS (P) LTD. (2017) 82 TAXM ANN.COM 300 (DEL) WHEREIN IT HAS BEEN HELD AS UNDER: 22. AS RIGHTLY POINTED OUT BY THE ITAT, THE 'REASO NS TO BELIEVE' ARE NOT IN FACT REASONS BUT ONLY CONCLUSIONS, ONE AFTER THE OTHER. THE EXPRESSI ON 'ACCOMMODATION ENTRY' IS USED TO DESCRIBE THE INFORMATION SET OUT WITHOUT EXPLAINING THE BASIS FOR ARRIVING AT SUCH A CONCLUSION. THE STATEMENT THAT THE SAID ENTRY WAS GIVEN TO THE ASSESSEE ON HIS PAYING 'UNACCOUNTED CASH' IS ANOTHER CONCLUSION THE BASIS FOR WHICH IS NOT DI SCLOSED. WHO IS THE ACCOMMODATION ENTRY GIVER IS NOT MENTIONED. HOW HE CAN BE SAID TO BE 'A KNOWN ENTRY OPERATOR' IS EVEN MORE MYSTERIOUS. CLEARLY THE SOURCE FOR ALL THESE CONCLU SIONS, ONE AFTER THE OTHER, IS THE INVESTIGATION REPORT OF THE DIT. NOTHING FROM THAT REPORT IS SET OUT TO ENABLE THE READER TO APPRECIATE HOW THE CONCLUSIONS FLOW THEREFROM. 23. THUS, THE CRUCIAL LINK BETWEEN THE INFORMATION MADE AVAILABLE TO THE AO AND THE FORMATION OF BELIEF IS ABSENT. THE REASONS MUST BE SELF EVIDE NT, THEY MUST SPEAK FOR THEMSELVES. THE TANGIBLE MATERIAL WHICH FORMS THE BASIS FOR THE BEL IEF THAT INCOME HAS ESCAPED ASSESSMENT MUST BE EVIDENT FROM A READING OF THE REASONS. THE ENTIRE MATERIAL NEED NOT BE SET OUT. HOWEVER, SOMETHING THEREIN WHICH IS CRITICAL TO THE FORMATION OF THE BELIEF MUST BE REFERRED TO. OTHERWISE THE LINK GOES MISSING. 24. THE REOPENING OF ASSESSMENT UNDER SECTION 147 IS A POTENT POWER NOT TO BE LIGHTLY EXERCISED. IT CERTAINLY CANNOT BE INVOKED CASUALLY OR MECHANICALLY. THE HEART OF THE PROVISION IS THE FORMATION OF BELIEF BY THE AO THAT INCOME HA S ESCAPED ASSESSMENT. THE REASONS SO RECORDED HAVE TO BE BASED ON SOME TANGIBLE MATERIAL AND THAT SHOULD BE EVIDENT FROM READING THE REASONS. IT CANNOT BE SUPPLIED SUBSEQUENTLY EIT HER DURING THE PROCEEDINGS WHEN OBJECTIONS 4 ITA NO. 799/KOL/2018 SHRI UDIT KUMAR DUGAR, AY 2012-13 TO THE REOPENING ARE CONSIDERED OR EVEN DURING THE ASSESSMENT PROCEEDINGS THAT FOLLOW. THIS IS THE BARE MINIMUM MANDATORY REQUIREMENT OF THE FIRST PART OF SECTION 147 (1) OF THE ACT. 25. AT THIS STAGE IT REQUIRES TO BE NOTED THAT SINC E THE ORIGINAL ASSESSMENT WAS PROCESSED UNDER SECTION 143 (1) OF THE ACT, AND NOT SECTION 143 (3) OF THE ACT, THE PROVISO TO SECTION 147 WILL NOT APPLY. IN OTHER WORDS, EVEN THOUGH THE RE OPENING IN THE PRESENT CASE WAS AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT A Y, IT WAS NOT NECESSARY FOR THE AO TO SHOW THAT THERE WAS ANY FAILURE TO DISCLOSE FULLY OR TRU LY ALL MATERIAL FACTS NECESSARY FOR THE ASSESSMENT. 26. THE FIRST PART OF SECTION 147 (1) OF THE ACT REQUIRES THE AO TO HAVE 'REASONS TO BELIEVE' THAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSES SMENT. IT IS THUS FORMATION OF REASON TO BELIEVE THAT IS SUBJECT MATTER OF EXAMINATION. THE AO BEING A QUASI JUDICIAL AUTHORITY IS EXPECTED TO ARRIVE AT A SUBJECTIVE SATISFACTION IND EPENDENTLY ON AN OBJECTIVE CRITERIA. WHILE THE REPORT OF THE INVESTIGATION WING MIGHT CONSTITU TE THE MATERIAL ON THE BASIS OF WHICH HE FORMS THE REASONS TO BELIEVE THE PROCESS OF ARRIVIN G AT SUCH SATISFACTION CANNOT BE A MERE REPETITION OF THE REPORT OF INVESTIGATION. THE RECO RDING OF REASONS TO BELIEVE AND NOT REASONS TO SUSPECT IS THE PRE- CONDITION TO THE ASSUMPTION OF JURISDICTION UNDER SECTION 147 OF THE ACT. THE REASONS TO BELIEVE MUST DEMONSTRATE LINK BETWEE N THE TANGIBLE MATERIAL AND THE FORMATION OF THE BELIEF OR THE REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT. 27. EACH CASE OBVIOUSLY TURNS ON ITS OWN FACTS AND NO TWO CASES ARE IDENTICAL. HOWEVER, THERE HAVE BEEN A LARGE NUMBER OF CASES EXPLAINING THE LE GAL REQUIREMENT THAT REQUIRES TO BE SATISFIED BY THE AO FOR A VALID ASSUMPTION OF JURIS DICTION UNDER SECTION 147 OF THE ACT TO REOPEN A PAST ASSESSMENT. 28.1 IN SIGNATURE HOTELS PVT. LTD. V. INCOME TAX OFFICER (SUPRA), THE REASONS FOR REOPENING AS RECORDED BY THE AO IN A PROFORMA AND PLACED BEFORE THE CIT FOR APPROVAL READ THUS: '11. REASONS FOR THE BELIEF THAT INCOME HAS ESCAPED ASSESSMENT.- INFORMATION IS RECEIVED FROM THE DIT (INV.-1), NEW DELHI THAT THE ASSESSEE HAS I NTRODUCED MONEY AMOUNTING TO RS. 5 LAKH DURING THE F.Y. 2002-03 RELATING TO A.Y. 2003-04. D ETAILS ARE CONTAINED IN ANNEXURE. AS PER INFORMATION AMOUNT RECEIVED IS NOTHING BUT ACCOMMOD ATION ENTRY AND ASSESSEE IS A BENEFICIARY.' 28.2 THE ANNEXURE TO THE SAID PROFORMA GAVE THE NAM E OF THE BENEFICIARY, THE VALUE OF ENTRY TAKEN, THE NUMBER OF THE INSTRUMENT BY WHICH ENTRY WAS TAKEN, THE DATE ON WHICH THE ENTRY WAS TAKEN, NAME OF THE ACCOUNT HOLDER OF THE BANK FROM WHICH THE CHEQUE WAS ISSUED, THE ACCOUNT NUMBER AND SO ON. 28.3 ANALYSING THE ABOVE REASONS TOGETHER WITH THE ANNEXURE, THE COURT OBSERVED: '14. THE FIRST SENTENCE OF THE REASONS STATES THAT INFORMATION HAD BEEN RECEIVED FROM DIRECTOR OF INCOME-TAX (INVESTIGATION) THAT THE PETITIONER H AD INTRODUCED MONEY AMOUNTING TO RS. 5 LACS DURING FINANCIAL YEAR 2002-03 AS PER THE DETAI LS GIVEN IN ANNEXURE. THE SAID ANNEXURE, REPRODUCED ABOVE, RELATES TO A CHEQUE RECEIVED BY T HE PETITIONER ON 9TH OCTOBER, 2002 FROM SWETU STONE PV FROM THE BANK AND THE ACCOUNT NUMBER MENTIONED THEREIN. THE LAST SENTENCE RECORDS THAT AS PER THE INFORMATION, THE AMOUNT REC EIVED WAS NOTHING BUT AN ACCOMMODATION ENTRY AND THE ASSESSEE WAS THE BENEFICIARY. 5 ITA NO. 799/KOL/2018 SHRI UDIT KUMAR DUGAR, AY 2012-13 15. THE AFORESAID REASONS DO NOT SATISFY THE REQUIR EMENTS OF SECTION 147 OF THE ACT. THE REASONS AND THE INFORMATION REFERRED TO IS EXTREMEL Y SCANTY AND VAGUE. THERE IS NO REFERENCE TO ANY DOCUMENT OR STATEMENT, EXCEPT ANNEXURE, WHIC H HAS BEEN QUOTED ABOVE. ANNEXURE CANNOT BE REGARDED AS A MATERIAL OR EVIDENCE THAT P RIMA FACIE SHOWS OR ESTABLISHES NEXUS OR LINK WHICH DISCLOSES ESCAPEMENT OF INCOME. ANNEXURE IS NOT A POINTER AND DOES NOT INDICATE ESCAPEMENT OF INCOME. FURTHER, IT IS APPARENT THAT THE ASSESSING OFFICER DID NOT APPLY HIS OWN MIND TO THE INFORMATION AND EXAMINE THE BASIS AND M ATERIAL OF THE INFORMATION. THE ASSESSING OFFICER ACCEPTED THE PLEA ON THE BASIS OF VAGUE INF ORMATION IN A MECHANICAL MANNER. THE COMMISSIONER ALSO ACTED ON THE SAME BASIS BY MECHAN ICALLY GIVING HIS APPROVAL. THE REASONS RECORDED REFLECT THAT THE ASSESSING OFFICER DID NOT INDEPENDENTLY APPLY HIS MIND TO THE INFORMATION RECEIVED FROM THE DIRECTOR OF INCOME-TA X (INVESTIGATION) AND ARRIVE AT A BELIEF WHETHER OR NOT ANY INCOME HAD ESCAPED ASSESSMENT.' 28.4 THE COURT IN SIGNATURE HOTELS PVT. LTD. V. INCOME TAX OFFICER (SUPRA) QUASHED THE PROCEEDINGS UNDER SECTION 148 OF THE ACT. THE FACTS IN THE PRESENT CASE ARE MORE OR LESS SIMILAR. THE PRESENT CASE IS THEREFORE COVERED AGAI NST THE REVENUE BY THE AFOREMENTIONED DECISION. 29.1 THE ABOVE DECISION CAN BE CONTRASTED WITH THE DECISION IN AGR INVESTMENT V. ADDITIONAL COMMISSIONER OF INCOME TAX (SUPRA), WHERE THE 'REASONS TO BELIEVE' READ AS UN DER: 'CERTAIN INVESTIGATIONS WERE CARRIED OUT BY THE DIR ECTORATE OF INVESTIGATION, JHANDEWALAN, NEW DELHI IN RESPECT OF THE BOGUS/ACCOMMODATION ENT RIES PROVIDED BY CERTAIN INDIVIDUALS/COMPANIES. THE NAME OF THE ASSESSEE FIG URES AS ONE OF THE BENEFICIARIES OF THESE ALLEGED BOGUS TRANSACTIONS GIVEN BY THE DIRECTORATE AFTER MAKING THE NECESSARY ENQUIRIES. IN THE SAID INFORMATION, IT HAS BEEN INTER-ALIA REPORT ED AS UNDER: 'ENTRIES ARE BROADLY TAKEN FOR TWO PURPOSES: 1. TO PLOUGH BACK UNACCOUNTED BLACK MONEY FOR THE P URPOSE OF BUSINESS OR FOR PERSONAL NEEDS SUCH AS PURCHASE OF ASSETS ETC., IN THE FORM OF GIF TS, SHARE APPLICATION MONEY, LOANS ETC. 2. TO INFLATE EXPENSE IN THE TRADING AND PROFIT AND LOSS ACCOUNT SO AS TO REDUCE THE REAL PROFITS AND THEREBY PAY LESS TAXES. IT HAS BEEN REVEALED THAT THE FOLLOWING ENTRIES HAV E BEEN RECEIVED BY THE ASSESSEE:....' 29.2 THE DETAILS OF SIX ENTRIES WERE THEN SET OUT I N THE ABOVE 'REASONS'. THESE INCLUDED NAME OF THE BENEFICIARY, THE BENEFICIARY'S BANK, VALUE OF T HE ENTRY TAKEN, INSTRUMENT NUMBER, DATE, NAME OF THE ACCOUNT IN WHICH ENTRY WAS TAKEN AND TH E ACCOUNT FROM WHERE THE ENTRY WAS GIVEN THE DETAILS OF THOSE BANKS. THE REASONS THEN RECORD ED: 'THE TRANSACTIONS INVOLVING RS. 27,00,000/-, MENTIO NED IN THE MANNER ABOVE, CONSTITUTES FRESH INFORMATION IN RESPECT OF THE ASSESSEE AS A BENEFIC IARY OF BOGUS ACCOMMODATION ENTRIES PROVIDED TO IT AND REPRESENTS THE UNDISCLOSED INCOM E/INCOME FROM OTHER SOURCES OF THE ASSESSEE COMPANY, WHICH HAS NOT BEEN OFFERED TO TAX BY THE ASSESSEE TILL ITS RETURN FILED. ON THE BASIS OF THIS NEW INFORMATION, I HAVE REASON TO BELIEVE THAT THE INCOME OF RS. 27,00,000/- HAS ESCAPED ASSESSMENT AS DEFINED BY SECTION 147 OF THE INCOME TAX ACT. THEREFORE, THIS IS A FIT CASE FOR THE ISSUANCE OF T HE NOTICE UNDER SECTION 148 .' 29.3 THE COURT WAS NOT INCLINED TO INTERFERE IN THE ABOVE CIRCUMSTANCES IN EXERCISE OF ITS WRIT JURISDICTION TO QUASH THE PROCEEDINGS. A CAREFUL PE RUSAL OF THE ABOVE REASONS REVEALS THAT THE AO DOES NOT MERELY REPRODUCE THE INFORMATION BUT TA KES THE EFFORT OF REVEALING WHAT IS CONTAINED IN THE INVESTIGATION REPORT SPECIFIC TO T HE ASSESSEE. IMPORTANTLY HE NOTES THAT THE INFORMATION OBTAINED WAS 'FRESH' AND HAD NOT BEEN O FFERED BY THE ASSESSEE TILL ITS RETURN PURSUANT TO THE NOTICE ISSUED TO IT WAS FILED. THIS IS A CRUCIAL FACTOR THAT WENT INTO THE 6 ITA NO. 799/KOL/2018 SHRI UDIT KUMAR DUGAR, AY 2012-13 FORMATION OF THE BELIEF. IN THE PRESENT CASE, HOWEV ER, THE AO HAS MADE NO EFFORT TO SET OUT THE PORTION OF THE INVESTIGATION REPORT WHICH CONTAINS THE INFORMATION SPECIFIC TO THE ASSESSEE. HE DOES NOT ALSO EXAMINE THE RETURN ALREADY FILED TO A SCERTAIN IF THE ENTRY HAS BEEN DISCLOSED THEREIN. 30.1 IN COMMISSIONER OF INCOME TAX, NEW DELHI V. HIGHGAI N FINVEST (P) LIMITED (2007) 164 TAXMAN 142 (DEL) RELIED UPON BY MR. CHAUDHARY, THE REASONS TO BELIEVE READ AS UNDER: 'IT HAS BEEN INFORMED BY THE ADDITIONAL DIRECTOR OF INCOME TAX (INVESTIGATION), UNIT VII, NEW DELHI VIDE LETTER NO. 138 DATED 8 TH APRIL 2003 THA T THIS COMPANY WAS INVOLVED IN THE GIVING AND TAKING BOGUS ENTRIES/ TRANSACTIONS DURING THE F INANCIAL YEAR 1996-97, AS PER THE DEPOSITION MADE BEFORE THEM BY SHRI SANJAY RASTOGI, CA DURING A SURVEY OPERATION CONDUCTED AT HIS OFFICE PREMISES BY THE INVESTIGATION WING. THE PART ICULARS OF SOME OF THE TRANSACTION OF THIS NATURE ARE AS UNDER: DATE PARTICULARS OF CHEQUE DEBIT AMT. CREDIT AMT 18.11.96 305002 5,00,000 THROUGH THE BANK ACCOUNT NO. CA 4266 OF M/S. MEHRAM EXPORTS PVT. LTD. IN THE PNB, NEW ROHTAK ROAD, NEW DELHI. NOTE: IT IS NOTED THAT THERE MIGHT BE MORE SUCH ENT RIES APART FROM THE ABOVE. THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 1997-9 8 WAS FILED BY THE ASSESSEE ON 4TH MARCH 1998 WHICH WAS ACCEPTED UNDER SECTION 143 (1) AT THE DECLARED INCOME OF RS. 4,200. IN VIEW OF THESE FACTS, I HAVE REASON TO BELIEVE THAT THE A MOUNT OF SUCH TRANSACTIONS PARTICULARLY THAT OF RS. 5,00,000 (AS MENTIONED ABOVE) HAS ESCAPED THE A SSESSMENT WITHIN THE MEANING OF THE PROVISO TO SECTION 147 AND CLAUSE (B) TO THE EXPLANATION 2 OF THIS SECTIO N. SUBMITTED TO THE ADDITIONAL CIT, RANGE -12, NEW DEL HI FOR APPROVAL TO ISSUE NOTICE UNDER SECTION 148 FOR THE ASSESSMENT YEAR 1997-98, IF APPROVED.' 30.2 THE AO WAS NOT MERELY REPRODUCING THE INFORMAT ION RECEIVED FROM THE INVESTIGATION BUT TOOK THE EFFORT OF REFERRING TO THE DEPOSITION MADE DURING THE SURVEY BY THE CHARTERED ACCOUNTANT THAT THE ASSESSEE COMPANY WAS INVOLVED I N THE GIVING AND TAKING OF BOGUS ENTRIES. THE AO THUS INDICATED WHAT THE TANGIBLE MATERIAL WA S WHICH ENABLED HIM TO FORM THE REASONS TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT. IT W AS IN THOSE CIRCUMSTANCES THAT IN THE CASE, THE COURT CAME TO THE CONCLUSION THAT THERE WAS PRI MA FACIE MATERIAL FOR THE AO TO COME TO THE CONCLUSION THAT THE ASSESSEE HAD NOT MADE A FULL AN D TRUE DISCLOSURE OF ALL THE MATERIAL FACTS RELEVANT FOR THE ASSESSMENT. 31. IN COMMISSIONER OF INCOME TAX V. G&G PHARMA (SUPRA) THERE WAS A SIMILAR INSTANCE OF REOPENING OF ASSESSMENT BY THE AO BASED ON THE INFO RMATION RECEIVED FROM THE DIT (I). THERE AGAIN THE DETAILS OF THE ENTRY PROVIDED WERE SET OU T IN THE 'REASONS TO BELIEVE'. HOWEVER, THE COURT FOUND THAT THE AO HAD NOT MADE ANY EFFORT TO DISCUSS THE MATERIAL ON THE BASIS OF WHICH HE FORMED PRIMA FACIE VIEW THAT INCOME HAD ESCAPED ASSESSMENT. THE COURT HELD THAT THE BASIC REQUIREMENT OF SECTION 147 OF THE ACT THAT THE AO SHOULD APPLY HIS MIND IN OR DER TO FORM REASONS TO BELIEVE THAT INCOME HAD ESCAPED ASSESSME NT HAD NOT BEEN FULFILLED. LIKEWISE IN CIT-4 V. INDEPENDENT MEDIA P. LIMITED (SUPRA) THE COURT IN SIMILAR CIRCUMSTANCES INVALIDATED THE INITIATION OF THE PROCEEDINGS TO RE OPEN THE ASSESSMENT UNDER SECTION 147 OF THE ACT. 32. IN ORIENTAL INSURANCE COMPANY LIMITED V. COMMISSION ER OF INCOME TAX 378 ITR 421 (DEL) IT WAS HELD THAT 'THEREFORE, EVEN IF IT IS AS SUMED THAT, IN FACT, THE ASSESSEE S INCOME HAS ESCAPED ASSESSMENT, THE AO WOULD HAVE NO JURISDICTI ON TO ASSESS THE SAME IF HIS REASONS TO 7 ITA NO. 799/KOL/2018 SHRI UDIT KUMAR DUGAR, AY 2012-13 BELIEVE WERE NOT BASED ON ANY COGENT MATERIAL. IN A BSENCE OF THE JURISDICTIONAL PRE-CONDITION BEING MET TO REOPEN THE ASSESSMENT, THE QUESTION OF ASSESSING OR REASSESSING INCOME UNDER SECTION 147 OF THE ACT WOULD NOT ARISE.' 33. IN RUSTAGI ENGINEERING UDYOG (P) LIMITED (SUPRA ), IT WAS HELD THAT '...THE IMPUGNED NOTICES MUST ALSO BE SET ASIDE AS THE AO HAD NO REA SON TO BELIEVE THAT THE INCOME OF THE ASSESSEE FOR THE RELEVANT ASSESSMENT YEARS HAD ESCA PED ASSESSMENT. CONCEDEDLY, THE AO HAD NO TANGIBLE MATERIAL IN REGARD TO ANY OF THE TRANSA CTIONS PERTAINING TO THE RELEVANT ASSESSMENT YEARS. ALTHOUGH THE AO MAY HAVE ENTERTAINED A SUSPICION TH AT THE ASSESSEE S INCOME HAS ESCAPED ASSESSMENT, SUCH SUSPICION COULD NOT FORM THE BASIS OF INITIATING PROCEEDINGS UNDER SECTION 147 OF THE ACT. A REASON TO BELIEVE - NOT REASON TO SU SPECT - IS THE PRECONDITION FOR EXERCISE OF JURISDICTION UNDER SECTION 147 OF THE ACT. ' 34. RECENTLY IN AGYA RAM V. CIT (SUPRA), IT WAS EMPHASIZED THAT THE REASONS TO BEL IEVE 'SHOULD HAVE A LINK WITH AN OBJECTIVE FACT IN THE F ORM OF INFORMATION OR MATERIALS ON RECORD...' IT WAS FURTHER EMPHASIZED THAT 'MERE ALLEGATION IN REASONS CANNOT BE TREATED EQUIVALENT TO MATERIAL IN EYES OF LAW. MERE RECEIPT OF INFORMATIO N FROM ANY SOURCE WOULD NOT BY ITSELF TANTAMOUNT TO REASON TO BELIEVE THAT INCOME CHARGEA BLE TO TAX HAS ESCAPED ASSESSMENTS.' 35. IN THE DECISION OF THIS COURT DATED 16TH MARCH 2016 IN W.P. (C) NO. 9659 OF 2015 ( RAJIV AGARWAL V. CIT ) IT WAS EMPHASIZED THAT 'EVEN IN CASES WHERE THE A O COMES ACROSS CERTAIN UNVERIFIED INFORMATION, IT IS NECESSARY FOR HIM TO TAKE FURTHER STEPS, MAKE INQUIRIES AND GARNER FURTHER MATERIAL AND IF SUCH MATERIAL INDICATES THA T INCOME OF AN ASSESSEE HAS ESCAPED ASSESSMENT, FORM A BELIEF THAT INCOME OF THE ASSESS EE HAS ESCAPED ASSESSMENT.' 36. IN THE PRESENT CASE, AS ALREADY NOTICED, THE RE ASONS TO BELIEVE CONTAIN NOT THE REASONS BUT THE CONCLUSIONS OF THE AO ONE AFTER THE OTHER. THER E IS NO INDEPENDENT APPLICATION OF MIND BY THE AO TO THE TANGIBLE MATERIAL WHICH FORMS THE BAS IS OF THE REASONS TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT. THE CONCLUSIONS OF THE AO ARE A T BEST A REPRODUCTION OF THE CONCLUSION IN THE INVESTIGATION REPORT. INDEED IT IS A 'BORROWED SATISFACTION'. THE REASONS FAIL TO DEMONSTRATE THE LINK BETWEEN TH E TANGIBLE MATERIAL AND THE FORMATION OF THE REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMEN T. 37. FOR THE AFOREMENTIONED REASONS, THE COURT IS SA TISFIED THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, NO ERROR HAS BEEN COMMITTED BY THE ITA T IN THE IMPUGNED ORDER IN CONCLUDING THAT THE INITIATION OF THE PROCEEDINGS UNDER SECTION 147 / 148 OF THE ACT TO REOPEN THE ASSESSMENTS FOR THE AYS IN QUESTION DOES NOT SATISFY THE REQUIR EMENT OF LAW. 38. THE QUESTION FRAMED IS ANSWERED IN THE NEGATIVE , I.E., IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. THE APPEAL IS, ACCORDINGLY, DISMISSED BUT WITH NO ORDERS AS TO COSTS. 7. WE ALSO NOTE THAT THE COORDINATE BENCH OF THIS T RIBUNAL IN ITA NO. 660/KOL/2011 FOR AY 2002-03 IN THE CASE OF DCIT VS. GREAT WALL MARKE TING (P) LTD. VIDE ORDER DATED 03.02.2016 HAS HELD AS UNDER: 8 ITA NO. 799/KOL/2018 SHRI UDIT KUMAR DUGAR, AY 2012-13 9. WE HAVE GIVEN A CAREFUL CONSIDERATION OF THE S UBMISSIONS MADE BY THE LEARNED COUNSEL FOR THE ASSESSEE. IT IS CLEAR FROM THE REASONS RECO RDED BY THE AO THAT THE AO ACTED ONLY ON THE BASIS OF A LETTER RECEIVED FROM INVESTIGATION W ING, NEW DELHI. THE REASONS RECORDED DOES NOT GIVE AS TO WHO HAS GIVEN THE BOGUS ENTRIES TO T HE ASSESSEE. THE REASONS RECORDED ALSO DOES NOT MENTION AS TO ON WHICH DATES AND THROUGH W HICH MODE THE BOGUS ENTRIES WERE MADE BY THE ASSESSEE. THE REASONS RECORDED WHICH ARE EXT RACTED IN THE EARLIER PART OF THE ORDER DOES NOT SHOW, WHAT WAS THE INFORMATION GIVEN BY DI T(INV.),NEW DELHI. THE DATE OF THE INFORMATION RECEIVED BY THE AO WERE NOT SPELT OUT I N THE REASONS RECORDED. THE INVOLVEMENT OF THE ASSESSEE IS ALSO NOT SPELT OUT, EXCEPT MENTI ONING THE CORPORATE BODIES WHO HAD SUBSCRIBED TO THE SHARE CAPITAL OF THE ASSESSEE WER E NON-EXISTENT AND NOT CREDITWORTHY. ON IDENTICAL FACTS THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS INSECTICIDES (INDIA) LTD (SUPRA) HAS TAKEN A VIEW THAT THE REASONS RECORDED WERE VAGUE AND UNCERTAIN AND CANNOT BE CONSTRUED AS SATISFACTION ON THE BASIS OF THE RELEV ANT MATERIAL ON THE BASIS OF WHICH A REASONABLE PERSON CAN FORM A BELIEF THAT INCOME HAS ESCAPED ASSESSMENT. THE HON'BLE DELHI HIGH COURT HAS ALSO COME TO THE CONCLUSION THAT THE REASONS RECORDED DID NOT DISCLOSE THE AO'S MIND REGARDING ESCAPEMENT OF INCOME. THE HON'B LE DELHI HIGH COURT ULTIMATELY HELD THAT INITIATION OF PROCEEDINGS U/S 148 OF THE ACT W AS NOT VALID AND JUSTIFIED IN THE EYES OF LAW. THE FACTS AND CIRCUMSTANCES IN THE PRESENT CASE ARE IDENTICAL TO THE CASE DECIDED BY THE HONBLE DELHI HIGH COURT. FOLLOWING THE SAID DECIS ION WE HOLD THAT INITIATION OF RE- ASSESSMENT PROCEEDINGS IS NOT VALID. ON THIS GROUN D, THE ASSESSMENT IS LIABLE TO BE ANNULLED. 8. THE HONBLE BOMBAY HIGH COURT IN PR.CIT VS. SHOD IMAN INVESTMENTS (P) LTD. (2018) 93 TAXMANN.COM 153 (BOM) IT HAS BEEN HELD AS UNDER: 9. WE FIND THAT AT THE TIME OF RE-OPENING OF THE ASSESSMENT, THE ASSESSING OFFICER DID NOT PROVIDE THE REASONS RECORDED IN SUPPORT OF THE RE-O PENING NOTICE IN ITS ENTIRETY, TO THE RESPONDENT-ASSESSEE. THIS WAS CONTRARY TO AND IN DE FIANCE OF THE DECISION OF THE APEX COURT IN GKN DRIVESHAFTS V. ITO [2002] 125 TAXMAN 963/ [2 003]259 ITR 19. THE ENTIRE OBJECTS OF REASONS FOR RE- OPENING NOTICE AS RECORDED BEING MA DE AVAILABLE TO AN ASSESSEE, IS TO ENABLE THE ASSESSING OFFICER TO HAVE A SECOND LOOK AT HIS REASONS RECORDED BEFORE HE PROCEEDS TO ASSESS THE INCOME, WHICH ACCORDING TO HIM, HAS ESCA PED ASSESSMENT. IN FACT, NON FURNISHING OF REASONS WOULD MAKE AN ASSESSMENT ORDER BAD AS HE LD BY THIS COURT IN CIT V. VIDESH SANCHAR NIGAM LTD. [2012] 21 TAXMANN.COM 53, 340 IT R 66. IN FACT, PARTIAL FURNISHING OF REASONS WILL ALSO NECESSARILY MEET THE SAME FATE I. E. RENDER THE ASSESSMENT ORDER ON RE- OPENING NOTICE BAD. THEREFORE, ON THE ABOVEGROUND I TSELF, THE QUESTION AS PROPOSED DOES NOT GIVE RISE TO ANY SUBSTANTIAL QUESTION OF LAW AS IT IS COVERED BY THE DECISION OF THIS COURT IN VIDESH SANCHAR NIGAM LTD.S CASE (SUPRA) AGAINST T HE REVENUE IN THE PRESENT FACTS. 10. BESIDES, THE SUBMISSIONS MADE ON BEHALF OF THE REVENUE THAT IN VIEW OF THE DECISION OF THE APEX COURT IN RAJESH JHAVERI STOCK BROKERS (P) LTD.'S, CASE (SUPRA), THE ASSESSING OFFICER IS ENTITLED TO RE-OPEN THE ASSESSMENT FOR W HATEVER REASONS AND THE SAME CANNOT BE SUBJECTED TO JURISDICTIONAL REVIEW, IS PREPOSTEROUS . FIRST OF ALL, TAKING OUT A WORD OR SENTENCE FROM THE ENTIRE JUDGMENT, DIVORCED FROM THE CONTEXT AND RELYING UPON IT, IS NOT PERMISSIBLE (SEE CIT V. SUN ENGG. WORKS (P) LTD. [L992] 64 TAXM AN 442/198 ITR 297 (SC). IT MAY BE USEFUL TO REPRODUCE THE CONTEXT IN WHICH THE SENTEN CE IN RAJESH JHAVERI STOCK BROKERS (P) LTD. 'S CASE (SUPRA) BEING RELIED UPON BY THE REVEN UE TO SUPPORT ITS CASE, WAS MADE. THE CONTEXT, IS AS UNDER: 'THE SCOPE AND EFFECT OF SECTION 147 AS SUBSTITUTED WITH EFFECT FROM APRIL 1, 1989, AS ALSO SECTIONS 148 TO 152 ARE SUBSTANTIALLY DIFFERENT FRO M THE PROVISIONS AS THEY STOOD PRIOR TO SUCH 9 ITA NO. 799/KOL/2018 SHRI UDIT KUMAR DUGAR, AY 2012-13 SUBSTITUTIONS. UNDER THE OLD PROVISIONS OF SECTION 147, SEPARATE CLAUSES (A) AND (B) LAID DOWN THE CIRCUMSTANCES UNDER WHICH INCOME ESCAPING ASSES SMENT FOR THE PAST ASSESSMENT YEARS COULD BE ASSESSED OR REASSESSED TO CONFER JURISDICT ION UNDER SECTION 147(A) TWO CONDITIONS WERE REQUIRED TO BE SATISFIED: FIRSTLY THE ASSESSIN G OFFICER MUST HAVE REASON TO BELIEVE THAT INCOME, PROFITS OR GAINS CHARGEABLE TO, INCOME TAX HAVE ESCAPED ASSESSMENT, AND SECONDLY HE MUST ALSO HAVE REASON TO BELIEVE THAT SUCH ESCAP EMENT HAS OCCURRED BY REASON OF EITHER OMISSION OR FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY OR TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT OF THAT YEAR. BOTH THE SE CONDITIONS PRECEDENT TO BE SATISFIED BEFORE THE ASSESSING OFFICER COULD HAVE JURISDICTIO N TO ISSUE NOTICE UNDER SECTION 148 READ WITH SECTION 147(A). BUT UNDER THE SUBSTITUTED SECT ION 147 EXISTENCE OF ONLY THE FIRST CONDITION SUFFICES.' . THEREFORE, THE SENTENCE BEING RELIED UPON WAS MADE IN THE CONTEXT OF THE CHANGE IN LAW THAT UNDER THE AMENDED PROVISION 'REASON TO BELIEVE' THA T IN CASE OF ESCAPED ASSESSMENT, IS SUFFICIENT TO RE-OPEN THE ASSESSMENT. THIS UNLIKE T HE EARLIER PROVISION OF SECTION 147(A) OF THE ACT WHICH REQUIRED TWO CONDITIONS I.E. FAILURE TO D ISCLOSE FULLY AND TRULY ALL FACTS NECESSARY FOR ASSESSMENT AND REASON TO BELIEVE THAT INCOME HA S ESCAPED ASSESSMENT THUS, THE OBSERVATIONS BEING RELIED UPON MUST BE READ IN THE CONTEXT IN WHICH IT RENDERED. ON SO READING THE SUBMISSION, WILL NOT SURVIVE. 11. FURTHER, A READING OF THE ENTIRE DECISION, IT IS CLEAR THAT THE REASONABLE BELIEF ON THE BASIS OF TANGIBLE MATERIAL COULD BE, PRIMA FACIE, F ORMED TO CONCLUDE THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. MR. MOHANTY, LEARNE D COUNSEL IS IGNORING THE FACT THAT 6THE WORDS WHATEVER REASONS IS QUALIFIED BY THE WORDS HAVING REASONS TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT. THE WORDS WHATEVER REASON S ONLY MEANS ANY TANGIBLE MATERIAL WHICH WOULD ON APPLICATION OF THE FACTS ON RECORD L EAD TO REASONABLE BELIEF THAT INCOME CHARGEABLE, TO TAX HAS ESCAPED, ASSESSMENT THIS MAT ERIAL WHICH, FORMS THE BASIS, IS NOT RESTRICTED, BUT THE MATERIAL MUST LEAD TO THE FORMA TION OF REASON TO BELIEVE THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT MERE OBTAI NING, OF MATERIAL BY ITSELF DOES NOT RESULT IN REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT. IN FACT, THIS WOULD BE EVIDENT FROM THE FACT THAT IN PARA 16 OF THE DECISION IN RA JESH JHAVERI STOCK BROKERS (P) LTD. 'S, CASE (SUPRA), IT IS OBSERVED THAT THE WORD 'REASON' IN T HE 'REASON TO BELIEVE' WOULD MEAN CAUSE OR JUSTIFICATION. THEREFORE, IT CAN ONLY BE THE BASIS OF FORMING THE BELIEF. HOWEVER, THE BELIEF MUST BE INDEPENDENTLY FORMED IN THE CONTEXT OF THE MATERIAL OBTAINED THAT THERE IS AN ESCAPEMENT OF INCOME. OTHERWISE, NO MEANING IS BEIN G GIVEN TO THE WORDS 'TO BELIEVE' AS FOUND IN SECTION 147 OF THE ACT. THEREFORE, THE WOR DS 'WHATEVER REASONS' IN RAJESH JHAVERI STOCK BROKERS (P) LTD.'S, CASE (SUPRA), ONLY MEANS WHATEVER THE MATERIAL, THE REASONS RECORDED MUST INDICATE THE REASONS TO BELIEVE THAT INCOME HAS, ESCAPED ASSESSMENT. THIS IS SO AS REASONS AS RECORDED ALONE GIVE THE ASSESSING OFFICER POWER TO RE-OPEN AN ASSESSMENT, IF IT REVEALS/INDICATE, REASONS TO BELIEVE THAT INC OME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. 12. THE RE-OPENING OF AN ASSESSMENT IS AN EXERCISE OF EXTRA-ORDINARY POWER ON THE PART OF THE ASSESSING OFFICER, AS IT LEADS TO UNSETTLING TH E SETTLED ISSUE/ASSESSMENTS. THEREFORE, THE REASONS TO BELIEVE HAVE TO BE NECESSARILY RECORDED IN TERMS OF SECTION 148 OF THE ACT, BEFORE RE-OPENING NOTICE, IS ISSUED. THESE REASONS, MUST I NDICATE THE MATERIAL (WHATEVER REASONS) WHICH FORM THE BASIS OF RE-OPENING . ASSESSMENT AND ITS REASONS WHICH WOULD EVIDENCE THE LINKAGE/NEXUS TO THE CONCLUSION THAT INCOME CHARGEA BLE TO TAX HAS ESCAPED ASSESSMENT THIS IS A SETTLED POSITION AS OBSERVED BY THE SUPREME CO URT IN S. NARAYANAPPA V. CIT [1967] 63 ITR 219, THAT IT IS OPEN TO EXAMINE WHETHER THE REA SON TO BELIEVE HAS RATIONAL CONNECTION WITH THE FORMATION OF THE BELIEF. TO THE SAME EFFEC T, THE APEX COURT IN ITO V. LAKHMANI MERWAL DAS [1976] 103 ITR 437 HAD LAID DOWN THAT TH E REASONS TO BELIEVE MUST HAVE 10 ITA NO. 799/KOL/2018 SHRI UDIT KUMAR DUGAR, AY 2012-13 RATIONAL CONNECTION WITH OR RELEVANT BEARING ON THE FORMATION OF BELIEF I.E. THERE MUST BE A LIVE LINK BETWEEN MATERIAL COMING THE NOTICE OF THE ASSESSING OFFICER AND THE FORMATION OF BELIEF REGARDING ESCAPEMENT OF INCOME. IF THE AFORE SAID REQUIREMENT ARE NOT MET, THE ASSESSEE IS ENTITLED TO CHALLENGE THE VERY ACT OF R E-OPENING OF ASSESSMENT AND ASSUMING JURISDICTION ON THE PART OF THE ASSESSING OFFICER. 13. IN THIS CASE, THE REASONS AS MADE AVAILABLE TO THE RESPONDENT- ASSESSEE AS PRODUCED BEFORE THE TRIBUNAL MERELY INDICATES INFORMATION RE CEIVED FROM THE DIT (INVESTIGATION) ABOUT A PARTICULAR ENTITY, ENTERING INTO SUSPICIOUS TRANS ACTIONS. HOWEVER, THAT MATERIAL IS NOT FURTHER LINKED BY ANY REASON TO COME TO THE CONCLUS ION THAT THE RESPONDENT-ASSESSEE HAS INDULGED IN ANY ACTIVITY WHICH COULD GIVE RISE TO R EASON TO BELIEVE ON THE PART OF THE ASSESSING OFFICER THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. IT IS FOR THIS REASON THAT THE RECORDED REASONS EVEN DOES- NOT INDICATE T HE AMOUNT WHICH ACCORDING TO THE ASSESSING OFFICER, HAS ESCAPED ASSESSMENT. THIS IS AN EVIDENCE OF A FISHING ENQUIRY AND NOT A REASONABLE BELIEF THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. 14. FURTHER, THE REASONS CLEARLY SHOWS THAT THE ASS ESSING OFFICER HAS NOT APPLIED HIS MIND TO THE INFORMATION RECEIVED BY HIM FROM THE DDIT (INV. ). THE ASSESSING OFFICER HAS MERELY ISSUED A RE-OPENING NOTICE ON THE BASIS OF INTIMATI ON REGARDING RE-OPENING NOTICE FROM THE DDIT (INV.) THIS IS CLEARLY IN BREACH OF THE SETTLE D POSITION IN LAW THAT RE- OPENING NOTICE HAS TO BE ISSUED BY THE ASSESSING OFFICE ON HIS OWN SAT ISFACTION AND NOT ON BORROWED SATISFACTION. 15. THEREFORE, IN THE ABOVE FACTS, THE VIEW TAKEN B Y THE IMPUGNED ORDER OF THE TRIBUNAL CANNOT BE FOUND FAULT WITH. THIS VIEW OF THE TRIBUN AL IS IN ACCORDANCE WITH THE SETTLED POSITION IN LAW. '\ 16. THEREFORE, THE QUESTION; AS FRAMED DOES NOT GIV E RISE TO ANY SUBSTANTIAL QUESTION OF LAW. THUS, NOT ENTERTAINED.' 9. THE COORDINATE BENCH OF THIS TRIBUNAL IN ITA NOS . 764 TO 766/KOL/2014 IN M/S. CLASSIC FLOUR & FOOD PROCESSING PVT. LTD. VS. CIT F OR AY 2009-10, 2007-08 AND 2008-09 VIDE ORDER DATED 05.04.2017 HAS HELD AS UNDER: 7. AS FAR AS THE ADDITIONAL GROUNDS OF APPEAL RAI SED BY THE ASSESSEE ARE CONCERNED, IT CAN BE SEEN FROM THE ADDITIONAL GROUNDS THAT THE ASSESSEE WANTS TO CONTEND THAT THE VERY INITIATION OF PROCEEDINGS U/S 147 OF THE ACT WAS BAD IN LAW AND T HEREFORE PROCEEDINGS U/S 263 OF THE ACT CANNOT BE INITIATED ON AN ORDER WHICH IS INVALID IN LAW. IT IS THE FURTHER CONTENTION OF THE ASSESSEE THAT IN THE REASONS RECORDED FOR REOPENING OF THE ASSESSMENTS U/S 147 OF THE ACT, THE AO HAS MENTIONED THAT THERE WAS UNEXPLAINED INVESTM ENT IN CONSTRUCTION OF HOTEL AND RESORTS AT MANDARMONI, PURBA MIDNAPORE AND SUCH UNEXPLAINED INVESTMENT IN THE CONSTRUCTION WHICH OUGHT TO HAVE BEEN BROUGHT TO TAX AS INCOME OF THE ASSESSEE HAS ESCAPED THE ASSESSMENT. IT IS THE CASE OF THE ASSESSEE THAT IN THE ASSESSMENT ORD ER PASSED U/S 147 OF THE ACT, THE AO DID NOT MAKE ANY ADDITION ON ACCOUNT OF UNEXPLAINED INVESTM ENT IN CONSTRUCTION. IT IS THE PLEA OF THE ASSESSEE THAT WHEN NO ADDITION IS MADE ON THE GROUN DS ON WHICH RE-ASSESSMENT PROCEEDINGS ARE INITIATED THEN NO OTHER ADDITION CAN BE MADE IN SUCH REASSESSMENT PROCEEDINGS. 8. THE FIRST ASPECT WHICH NEEDS TO BE EXAMINED IS A S TO WHETHER THE ASSESSEE IS ENTITLED TO CHALLENGE THE VALIDITY OF INITIATION OF PROCEEDINGS U/S 147 OF THE ACT IN THE PRESENT APPEALS IN WHICH HE HAS CHALLENGED THE VALIDITY OF ORDER PASSE D U/S 263 OF THE ACT. THE LD. COUNSEL FOR THE 11 ITA NO. 799/KOL/2018 SHRI UDIT KUMAR DUGAR, AY 2012-13 ASSESSEE SUBMITTED BEFORE US THAT IT IS OPEN TO AN ASSESSEE IN AN APPEAL AGAINST THE ORDER U/.S 263 OF THE ACT WHICH SEEKS TO REVISE AN ORDER PASSE D U/S 147 OF THE ACT, TO CHALLENGE THE VALIDITY OF THE ORDER PASSED U/S.147 OF THE ACT AS WELL AS INITIATION OF PROCEEDINGS U/.S 147 OF THE ACT. IN THIS REGARD THE LD. COUNSEL FOR THE ASS ESSEE PLACED BEFORE US TWO DECISIONS ONE RENDERED BY LUCKNOW BENCH OF ITAT IN THE CASE OF IN DER KUMAR BACHANI (HUF) VS ITO 99 ITD 621 (LUCK) AND ITAT MUMBAI G BENCH IN THE CAS E OF M/S. WESTLIFE DEVELOPMENT LTD. VS PRINCIPAL C.I.T. IN ITA NO.688/MUM/2016. IN BOTH TH E DECISIONS A VIEW HAS BEEN TAKEN BY THE TRIBUNAL THAT WHEN AN ASSESSMENT ORDER PASSED U/S 1 47 OF THE ACT WAS ILLEGAL THE CIT CANNOT INVOKE THE JURISDICTION U/S 263 OF THE ACT AGAINST SUCH VOID OR NON-EST ORDER. IN THE SECOND DECISION CITED THE HONBLE MUMBAI BENCH OF THE TRIB UNAL HAS SPECIFICALLY FRAMED THE FOLLOWING QUESTIONS :- 1.WHETHER THE ASSESSEE CAN CHALLENGE THE VALIDITY OF AN ASSESSMENT ORDER DURING THE APPELLATE PROCEEDINGS PERTAINING TO EXAMINATION OF VALIDITY OF ORDER PASSED U/S 263? 2. WHETHER THE IMPUGNED ASSESSMENT ORDER PASSED U/ S 143(3) DATED 24-10-2013 WAS VALID IN THE EYES OF LAW OR A NULLITY AS HAS BEEN C LAIMED BY THE ASSESSEE? 3. IF THE IMPUGNED ASSESSMENT ORDER PASSED U/S 143( 3) WAS ILLEGAL OR NULLITY IN THE EYES OF LAW, THEN, WHETHER THE CIT HAD A VALID JURI SDICTION TO PASS THE IMPUGNED ORDER U/S 263 TO REVISE THE NON EST ASSESSMENT ORDER? 9. ON QUESTION NO. 1 AND 3 WHICH IS RELEVANT TO TH E PRESENT CASE THE HONBLE MUMBAI BENCH OF THE TRIBUNAL HAS TAKEN THE VIEW THAT WHEN THE ORIGI NAL ASSESSMENT PROCEEDINGS ARE NULL AND VOID IN THE EYES OF LAW FOR WANT OF PROPER ASSUMPTI ON OF JURISDICTION THEN SUCH VALIDITY CAN BE CHALLENGED EVEN IN COLLATERAL PROCEEDINGS. THE MUMB AI BENCH TOOK THE VIEW THAT THE PROCEEDINGS U/S 147 OF THE ACT ARE PRIMARY PROCEEDI NGS AND PROCEEDINGS U/S 263 OF THE ACT ARE COLLATERAL PROCEEDINGS AND IN SUCH COLLATERAL P ROCEEDINGS, THE VALIDITY OF INITIATION OF THE ORIGINAL PROCEEDINGS U/S 147 OF THE ACT CAN BE CHAL LENGED. THE MUMBAI BENCH OF THE TRIBUNAL IN THIS REGARD HAS PLACED RELIANCE ON SEVERAL DECIS IONS, THE PRINCIPAL DECISION BEING THAT OF THE HONBLE SUPREME COURT IN THE CASE OF KIRAN SINGH & ORS. V. CHAMAN PASWAN & ORS. [1955] 1 SCR 117 WHEREIN THE HONBLE SUPREME COURT OBSERVE D AS FOLLOWS :- IT IS A FUNDAMENTAL PRINCIPLE WELL-ESTABLISHED TH AT A DECREE PASSED BY A COURT WITHOUT JURISDICTION IS A NULLITY, AND THAT ITS INV ALIDITY COULD BE SET UP WHENEVER AND WHEREVER IT IS SOUGHT TO BE ENFORCED OR RELIED UPON , EVEN AT THE STAGE OF EXECUTION AND EVEN IN COLLATERAL PROCEEDINGS. A DEFECT OF JURISDI CTION, WHETHER IT IS PECUNIARY OR TERRITORIAL, OR WHETHER IT IS IN RESPECT OF THE SUB JECT-MATTER OF THE ACTION, STRIKES AT THE VERY AUTHORITY OF THE COURT TO PASS ANY DECREE AND SUCH A DEFECT CANNOT BE CURED EVEN BY CONSENT OF PARTIES.' 10. THE ITAT MUMBAI BENCH MADE A REFERENCE TO ANOT HER DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF SUSHIL KUMAR MEHTA VS GOBIND R AM BOHRA, (1990) 1 SCC 193 AND THE DECISIONS IN THE CASE OF INDIAN BANK VS MANILAL GOV INDJI KHONA (2015) 3 SCC 712. THE ITAT MUMBAI BENCH ALSO HELD THAT IF ORDER OF ASSESSMENT PASSED U/S 147 OF THE ACT WAS ILLEGAL AND NULLITY IN THE EYES OF LAW THEN THAT ORDER CANNOT B E REVISED BY INVOKING POWERS U/S 263 OF THE ACT BY CIT. THE MUMBAI BENCH HAS IN THIS REGARD PLA CED RELIANCE ON THE DECISION OF HONBLE DELHI BENCH OF THE TRIBUNAL IN THE CASE OF KRISHNA KUMAR SARAF VS CIT IN ITA NO.4562/DEL/2007 ORDER DATED 24.09.2015 WHEREIN IT WAS HELD AS FOLLOWS :- 17. THERE IS NO QUARREL WITH THE PROPOSITION ADVA NCED BY ID. DR THAT THE PROCEEDINGS U/S 263 ARE FOR THE BENEFIT OF REVENUE AND NOT FOR ASSESSEE. 12 ITA NO. 799/KOL/2018 SHRI UDIT KUMAR DUGAR, AY 2012-13 18. HOWEVER, U/S 263 THE ID. COMMISSIONER CANNOT RE VISE A NON EST ORDER IN THE EYE OF LAW. SINCE THE ASSESSMENT ORDER WAS PASSED IN PURSU ANCE TO THE NOTICE U/S 143(2), WHICH WAS BEYOND TIME, THEREFORE, THE ASSESSMENT OR DER PASSED IN PURSUANCE TO THE BARRED NOTICE HAD NO LEGS TO STAND AS THE SAME WAS NON EST IN THE EYES OF LAW. ALL PROCEEDINGS SUBSEQUENT TO THE SAID NOTICE ARE OF NO CONSEQUENCE. FURTHER, THE DECISION OF HONBLE MADRAS HIGH COURT IN THE CASE O F CIT VS. GITSONS ENGINEERING CO. 370 ITR 87 (MAD) CLEARLY HOLDS THAT THE OBJECTI ON IN RELATION TO NON SERVICE OF NOTICE COULD BE RAISED FOR THE FIRST TIME BEFORE TH E TRIBUNAL AS THE SAME WAS LEGAL, WHICH WENT TO THE ROOT OF THE MATTER. 19. WHILE EXERCISING POWERS U/S 263 ID. COMMISSIONE R CANNOT REVISE AN ASSESSMENT ORDER WHICH IS NON EST IN THE EYE OF LAW BECAUSE IT WOULD PREJUDICE THE RIGHT OF ASSESSEE WHICH HAS ACCRUED IN FAVOUR OF ASSESSEE ON ACCOUNT OF ITS INCOME BEING DETERMINED. IF ID. COMMISSIONER REVISES SUCH AN ASS ESSMENT ORDER, THEN IT WOULD IMPLY EXTENDING/ GRANTING FRESH LIMITATION FOR PASS ING FRESH ASSESSMENT ORDER. IT IS SETTLED LAW THAT BY THE ACTION OF THE AUTHORITIES T HE LIMITATION CANNOT BE EXTENDED. BECAUSE THE PROVISIONS OF LIMITATION ARE PROVIDED I N THE SAME. 20. IN VIEW OF ABOVE DISCUSSION GROUND NO.3 IS ALLO WED AND REVISION ORDER PASSED U/S 263 IS QUASHED. 11. THE LEARNED DR RELIED ON THE ORDER OF THE CIT(A ). WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE ARE OF THE VIEW THAT THE VALIDITY O F THE ORDER U/S 147 OF THE ACT DEPENDS UPON THE AO ASSUMING JURISDICTION TO MAKE AN ORDER OF AS SESSMENT U/S 147 OF THE ACT AFTER FULFILLING THE CONDITIONS LAID DOWN IN THE SAID SECTION NAMELY REASON TO BELIEVE THE INCOME CHARGEABLE TO TAX FOR THAT ASSESSMENT YEAR HAS ESCAPED ASSESSMENT . IF THIS CONDITION IS NOT SATISFIED THEN IT CANNOT BE SAID THE AO HAS VALIDLY ASSUMED JURISDICT ION U/S 147 OF THE ACT. IF THE VALIDITY OF PROCEEDINGS U/S 147 OF THE ACT HAS NOT BEEN CHALLEN GED BY THE ASSESSEE BY FILING APPEAL AGAINST THE ORDER U/S.147 OF THE ACT, CAN IT BE CHA LLENGED IN THE APPEAL AGAINST AN ORDER U/S 263 OF THE ACT REVISING THE INVALID ORDER U/S 147 O F THE ACT. THIS ISSUE HAS BEEN ANALYSED BY THE HONBLE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF M/S. WESTLIFE DEVELOPMENT LTD. (SUPRA) AND 147 PROCEEDINGS HAS BEEN EQUATED TO PRIMARY PRO CEEDINGS AND THE PROCEEDINGS U/S 263 PASSED EQUATED TO COLLATERAL PROCEEDINGS. IT HAS FU RTHER BEEN HELD BASED ON VARIOUS JUDICIAL PRONOUNCEMENTS OF THE HONBLE SUPREME COURT THAT IF THE PRIMARY PROCEEDINGS ARE NON-EST IN LAW OR VOID ON THE GROUND OF LACK OF JURISDICTION T HEN THE VALIDITY OF SUCH PROCEEDINGS CAN BE CHALLENGED EVEN IN AN APPEAL ARISING OUT OF COLLATE RAL PROCEEDINGS. WE HAVE ALREADY SET OUT THE RATIO LAID DOWN IN THESE DECISIONS AND WE DO NO T WISH TO REPEAT THE SAME. SUFFICE IT TO SAY THE LAW IS WELL SETTLED THAT INVALIDITY OF THE PRIM ARY PROCEEDINGS FOR WANT OF PROPER JURISDICTION CAN BE CHALLENGED EVEN IN APPELLATE PR OCEEDINGS ARISING OUT OF A COLLATERAL PROCEEDING. IN VIEW OF THE AFORESAID LEGAL POSITION WE ADMIT THE ADDITIONAL GROUNDS FOR ADJUDICATION. 12. AS FAR AS THE MERITS OF THE VALIDITY OF INITIA TION OF PROCEEDINGS U/S 147 OF THE ACT FOR A.Y.2007-08 AND 2008-09 ARE CONCERNED THE QUESTION FOR CONSIDERATION IS AS TO WHETHER ON THE BASIS OF THE REASONS RECORDED IT CAN BE SAID THAT T HERE CAN ARISE ANY BELIEF ON THE PART OF THE AO THAT INCOME CHARGEABLE TO TAX FOR THE RELEVANT A SSESSMENT YEARS HAS ESCAPED ASSESSMENT. IN THIS REGARD THE REASONS RECORDED BY THE AO FOR I NITIATING PROCEEDINGS U/.S 147 OF THE ACT FOR A.Y.2007-08 AND 2008-09 HAS ALREADY BEEN SET OUT BY AN ORDER IN THE EARLIER PART OF THIS ORDER. THE GIST OF THE REASONS RECORDED BY THE AO I S THAT THE ASSESSEE HAD MADE INVESTMENTS OF ABOUT RS.4 CRORE IN CONSTRUCTION OF HOTEL/RESORT AT MANDARMONI, PURBA MIDNAPORE. IT IS THE FURTHER ALLEGATION IN THE REASONS RECORDED THAT TO A NOTICE U/S 133(6) OF THE ACT, THE ASSESSEE HAD IN REPLY ADMITTED INVESTMENT OF ONLY RS.3.38 CR ORES IN CONSTRUCTION OF HOTEL AND THAT SOURCE OF FUNDS FOR SUCH CONSTRUCTION WAS OUT OF SH ARE CAPITAL AND SECURED LOAN. IT IS ALSO NOT 13 ITA NO. 799/KOL/2018 SHRI UDIT KUMAR DUGAR, AY 2012-13 DISPUTED THAT THE VALUE OF INVESTMENTS AS STATED BY THE ASSESSEE IN ITS REPLY TO THE NOTICE U/S 133(6) OF THE ACT, WAS DULY SHOWN AS THE INVESTMENT IN CONSTRUCTION OF HOTEL WITH THE BALANCE SHEET OF THE ASSESSEE. THE AO HAS HOWEVER INFERRED THAT THERE IS A DIFFERENCE IN THE VALUE OF INVESTMENT IN CONSTRUCTION OF HOTEL AS SHOWN IN THE BOOKS OF ACCOUNT AND AS PER THE INFORMATION IN POSSESSION OF THE AO WHICH IS A SUM OF RS.4 CRORES. ANOTHER REASON GIVEN BY THE AO IS THAT THE DIFFERENCE IN THE AMOUNT OF INVE STMENT IN CONSTRUCTION MIGHT HAVE BEEN MET BY THE ASSESSEE OUT OF INCOME NOT DISCLOSED. IT HAS ALSO BEEN MENTIONED THAT THE SOURCE OF INVESTMENT WITH REGARD TO THE ACTUAL COST OF CONSTR UCTION REQUIRES INVESTIGATION. 13. IN THIS REGARD IT CAN BE SEEN THAT IN ITS REPLY DATED 26.07.2010 TO THE NOTICE U/S 133(6) OF THE ACT THE ASSESSEE HAS GIVEN THE FOLLOWING DETAIL S :- KINDLY REFER TO YOUR ABOVE LETTER DATED 18.06.201 0 CALLING FOR INFORMATION U/S. 133(6) OF THE INCOME TAX ACT, 1961 REGARDING INVEST MENT IN HOTEL AJOY MINAR SITUATED IN MANDARMONI, DIST. - PURBA MEDINIPUR. AS ASKED FOR, WE ARE FURNISHING THE INFORMATION ALO NG WITH ENCLOSURES FOR YOUR KIND PERUSAL.- I. TOTAL AMOUNT INVESTED UP TO 31.03.2010 IS RS. 3,38, 43,644.00 AND SOURCE OF FUND IS GIVEN HEREUNDER: - SHARE CAPITAL RS. 1,88,30,000.00 UNSECURED LOAN . RS. 1.65.16,005.00 TOTAL RS. 3,53,46,005.00 WE ARE ENCLOSING HEREWITH THE LIST OF SHARE HOLDER S AND LOANERS UP TO 31.03.2010 SHOWING NAMES, ADDRESS AND PAN OF THE RESPECTIVE PARTIES FO R YOUR READY REFERENCE. THE FIGURES RELATING TO 2009-10 INCLUDED WITH THE ABOVE ARE SUB JECT TO AUDIT. THE ABOVE TWO LISTS ARE THE CLEAR EVIDENCE IN SUPPO RT OF CREDIT WORTHINESS OF OUR COMPANY, 2. A SEPARATE YEAR WISE LIST OF INVESTMENT IN HOTEL AJOY MINAR IS ENCLOSED AS ASKED FOR. 3 WE ARE ENCLOSING HEREWITH PHOTO COPY OF AUDITED BALANCE SHEET FOR THE YEARS 2006-07, 2007-08 & 2008-09. THE AUDIT OF ACCOUNTS FOR THE YE AR ENDING 31ST MARCH2010 IS UNDER PROGRESS. THE SAME, IF REQUIRED, WILL BE FURNISHED WHEN THE SAME WILL BE SIGNED BY THE AUDITOR. 4 THE PHOTO COPIES OF TWO BANK ACCOUNTS ARE ENCLOS ED FOR YOUR KIND PERUSAL. 14. IN THE LIGHT OF THE AFORESAID REPLY THE QUESTI ON THAT NEEDS TO BE ANSWERED IS AS TO HOW DID THE AO GET INFORMATION THAT THE ASSESSEE HAD INVEST ED RS.4 CRORES IN HOTEL AT MANDARMONI, PURBA MEDINIPUR. APPARENTLY THERE APPEARS TO BE NO BASIS FOR THIS CONCLUSION ARRIVED AT BY THE AO IN THE REASONS RECORDED. THE LD. DR HOWEVER SOUGHT TO DEFEND THE ACTION OF THE AO BY SUBMITTING THAT THERE WAS A SURVEY IN THE BUSINESS PREMISES OF THE ASSESSEE AND IN SUCH SURVEY THERE WAS EVIDENCE TO SHOW THAT THE ASSESSEE HAD IN VESTED A SUM OF RS.4 CRORES IN CONSTRUCTION OF A HOTEL AT MANDARMONI. WE ARE OF THE VIEW THAT T HIS SUBMISSION OF THE LD. DR CANNOT BE ACCEPTED. THE LAW IS WELL SETTLED THAT THE REASONS RECORDED BY THE AO HAVE TO BE TESTED ON THE BASIS OF SPECIFIC WORDINGS OF THE REASONS SO RECORD ED. NO EXTERNAL MATERIAL CAN BE SHOWN TO JUSTIFY THE CONCLUSION ARRIVED AT IN THE REASONS RE CORDED UNLESS THESE MATERIALS ARE SPECIFICALLY REFERRED TO OR INCORPORATED IN THE REASONS RECORDED . IN THE REASONS RECORDED THE AO HAS NOT DISCLOSED THE BASIS OF THIS CONCLUSION THAT THE ASS ESSEE MADE AN INVESTMENT OF RS. 4 CRORES IN THE CONSTRUCTION OF A HOTEL AT MANDARMONI. WE FIND THAT IN THIS REGARD THAT HONBLE BOMBAY HIGH COURT IN THE CASE OF HINDUSTAN LEVER LTD., VS. R.B.WADKAR (2004) 268 ITR 0332 THE 14 ITA NO. 799/KOL/2018 SHRI UDIT KUMAR DUGAR, AY 2012-13 REASONS ARE REQUIRED TO BE READ AS THEY WERE RECORD ED BY THE AO. NO SUBSTITUTION OR DELETION IS PERMISSIBLE. NO ADDITIONS CAN BE MADE TO THOSE R EASONS. NO INFERENCE CAN BE ALLOWED TO BE DRAWN BASED ON REASONS NOT RECORDED. IT IS FOR THE AO TO DISCLOSE AND OPEN HIS MIND THROUGH REASONS RECORDED BY HIM. HE HAS TO SPEAK THROUGH HI S REASONS. IT IS FOR THE AO TO REACH TO THE CONCLUSION AS TO WHETHER THERE WAS FAILURE ON THE P ART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSME NT FOR THE CONCERNED ASSESSMENT YEAR. IT IS FOR THE AO TO FORM HIS OPINION. IT IS FOR HIM TO PU T HIS OPINION ON RECORD IN BLACK AND WHITE. THE REASONS RECORDED SHOULD BE CLEAR AND UNAMBIGUOU S AND SHOULD NOT SUFFER FROM ANY VAGUENESS. THE REASONS RECORDED MUST DISCLOSE HIS M IND. REASONS ARE THE MANIFESTATION OF MIND OF THE AO. THE REASONS RECORDED SHOULD BE SELF -EXPLANATORY AND SHOULD NOT KEEP THE ASSESSEE GUESSING FOR THE REASONS. REASONS PROVIDE LINK BETWEEN CONCLUSION AND EVIDENCE. THE REASONS RECORDED MUST BE BASED ON EVIDENCE. THE AO, IN THE EVENT OF CHALLENGE TO THE REASONS, MUST BE ABLE TO JUSTIFY THE SAME BASED ON MATERIAL AVAILABLE ON RECORD. HE MUST DISCLOSE IN THE REASONS AS TO WHICH FACT OR MATERIAL WAS NOT DISCLO SED BY THE ASSESSEE FULLY AND TRULY NECESSARY FOR ASSESSMENT OF THAT ASSESSMENT YEAR, S O AS TO ESTABLISH VITAL LINK BETWEEN THE REASONS AND EVIDENCE. THAT VITAL LINK IS THE SAFEGU ARD AGAINST ARBITRARY REOPENING OF THE CONCLUDED ASSESSMENT. THE REASONS RECORDED BY THE A O CANNOT BE SUPPLEMENTED BY FILING AFFIDAVIT OR MAKING ORAL SUBMISSION, OTHERWISE, THE REASONS WHICH WERE LACKING IN THE MATERIAL PARTICULARS WOULD GET SUPPLEMENTED BY THE TIME THE MATTER REACHES TO THE COURT, ON THE STRENGTH OF AFFIDAVIT OR ORAL SUBMISSIONS ADVANCED. 15. WE ARE ALSO OF THE VIEW THAT AS RIGHTLY CONTEN DED BY THE LD. COUNSEL FOR THE ASSESSEE THAT THE REASONS RECORDED ARE VAGUE AND BELIEF REGARDING ESCAPEMENT OF INCOME IS ON MERE PRETENCE. IN THIS REGARD THE DECISION OF ITAT KOLKA TA BENCH IN ITA NO.671/KOL/2015 DATED 18.09.2015 IN THE CASE OF DR.PAPIYA DUTTA VS ITO IS RELEVANT AND IT HAS BEEN HELD IN THE AFORESAID DECISION AS FOLLOWS :- IT IS CLEARLY EVIDENT FROM THE REASONS RECORDED B Y THE ASSESSING OFFICER THAT THERE WAS ACTUALLY NO REASON FOR HIM TO HAVE FORMED A BEL IEF ABOUT THE ESCAPEMENT OF ANY INCOME OF THE ASSESSEE FROM THE ASSESSMENT, BUT THE ASSESSMENT WAS REOPENED BY HIM TO VERIFY OR EXAMINE CERTAIN PARTICULARS FURNISHED BY THE ASSESSEE IN THE RETURN OF INCOME, WHICH ACCORDING TO THE ASSESSING OFFICER, M IGHT HAVE POSSIBLY INVOLVED INTRODUCTION OF HER UN ACCOUNTED MONEY BY THE ASSES SEE. IT IS THUS CLEAR THAT THE ASSESSMENT WAS REOPENED BY THE ASSESSING OFFICER ON THE BASIS OF SUSPICION AND IN ORDER TO MAKE FISHING AND ROAMING ENQUIRIES, WHICH, IN MY OPINION, IS NOT PERMISSIBLE. IT IS A SETTLED POSITION OF LAW THAT THE ASSESSMENT CAN BE REOPENED UNDER SECTION 147/148 ON THE BASIS OF 'REASON TO BELIEVE' AND NOT 'REASON TO SUSPECT'. AS HELD BY THE COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF DE PUTY DIRECTOR OF INC ME TAX (INTERNATIONAL TAXATION )-21, MUMBAI -VS.- SOCIETE INTERNATIONAL DE TELECOMMUNICATION ( SUPRA) CITED BY THE ID. COUNSEL FOR THE ASSESSEE, UNLESS THE REASONS TO BELIEVE ABOUT THE ESCAPEMENT OF INCOME E XIST, NO RECOURSE CAN BE TAKEN TO THE PROVISIONS OF SECTION 147. IT WAS HELD THAT WHE RE AN ASSESSING OFFICER VENTURES TO INITIATE REASSESSMENT PROCEEDINGS WITH AN OBJECT OF FINDING SOME MATERIAL ABOUT THE ESCAPEMENT OF INCOME, SUCH REASSESSMENT CANNOT LEGA LLY STAND AND THE LAW DOE S NOT PERMIT THE ASSESSING OFFICER TO CONDUCT INQUIRIES A FTER THE INITIATION OF REASSESSMENT ITA NO. 671 / KOL/2015 ASSESSMENT YEAR: 2008 - 2009 PROCEEDINGS, TO FIND IF THERE IS AN ESCAPEMENT OF INCOME. IT WAS HELD THAT THE SCOPE OF SECTION 147 CANNOT ENCOMPASS SUCH AN ACTION UNDER WHICH CERTAIN EXAMINATION IS T O BE CONDUCTED FOR FORMING A REASON TO BELIEVE AS TO THE ESCAPEMENT OF INCOME. I F THE FACTS OF THE PRESENT CASE INCLUDING ESPECIALLY THE REASONS RECORDED BY THE AS SESSING OFFICER FOR REOPENING THE ASSESSMENT A RECONSIDERED IN THE LIGHT OF THE DECIS ION OF THE COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF DEPUTY DIRECTOR OF INCOME T AX (INTERNATIONAL TAXATION)-21, 15 ITA NO. 799/KOL/2018 SHRI UDIT KUMAR DUGAR, AY 2012-13 MUMBAI - VS.- SOCIETE INTERNATIONAL DE TELECOMMUNIC ATION (SUPRA), I AM OF THE VIEW THAT THE INITIATION OF REASSESSMENT PROCEEDING ITSE LF WAS BAD IN LAW AND THE ASSESSMENT COMPLETED BY THE ASSESSING OFFICER UNDER SECTION 14 3(3) READ WITH SECTION 147 IN PURSUANCE OF SUCH INVALID INITIATION IS LIABLE TO B E CANCELLED. I ORDER ACCORDINGLY. 16. IN THE PRESENT CASE ALSO THE RE-ASSESSMENT PRO CEEDINGS HAVE BEEN INITIATED ONLY FOR THE PURPOSE OF VERIFICATION AND EXAMINATION WHICH IS NO T THE SCOPE OF REASSESSMENT PROCEEDINGS. IT WOULD BE THE CASE OF RATHER REASONS TO SUSPECT RATH ER THAN REASONS TO BELIEF THAT THERE WAS ESCAPEMENT OF INCOME. IT IS A CASE OF THE AO SEEKIN G TO MAKE FISHING AND ROVING INQUIRY WITHOUT ANY BASIS. WE HAVE NO HESITATION IN CONCLUD ING THAT INITIATION OF REASSESSMENT PROCEEDINGS IN THE PRESENT CASE WAS NOT VALID AS TH E MANDATORY REQUIREMENT OF SUCH 147 HAS NOT BEEN SATISFIED. WE THEREFORE HOLD THAT REASSESS MENTS ORDERS FOR A.Y.2007-08 AND 2008-09 DATED 30.12.2011 WERE INVALID. CONSEQUENTLY ORDER P ASSED U/S 263 OF THE ACT DATED 21.03.2014 FOR A.Y.2007- 08 AND 2008-09 ARE ALSO HE LD TO BE INVALID AND QUASHED. THUS THE APPEALS BEING ITA NO.765 AND 766/KOL/2014 ARE ALLOW ED. 10. THE HONBLE DELHI HIGH COURT IN THE CASE OF COM MISSIONER OF INCOME-TAX, IV V. INSECTICIDES (INDIA) LTD[2013] 357 ITR 330 (DELHI) UPHELD THE ORDER OF THE ITAT DELHI BENCH IN ITA NOS. 2332-2333/DEL/2010, HOLDING AS FO LLOWS:- 7. WE MAY POINT OUT AT THIS JUNCTURE ITSELF THAT T HE TRIBUNAL DID NOT GO INTO THE QUESTION OF MERITS. IT ONLY EXAMINED THE QUESTION OF THE VALIDITY OF THE PROCEE DINGS UNDER SECTION 147 OF THE SAID ACT. THE TRIBUN AL, IN ESSENCE, HELD THAT THE PURPORTED REASONS FOR REOPEN ING THE ASSESSMENTS WERE ENTIRELY VAGUE AND DEVOID OF ANY MATERIAL. AS SUCH, ON THE AVAILABLE MATERIAL, N O REASONABLE PERSON COULD HAVE ANY REASON TO BELIEV E THAT INCOME HAD ESCAPED ASSESSMENT. CONSEQUENTLY, T HE TRIBUNAL HELD THAT THE PROCEEDINGS UNDER SECTION 147 OF THE SAID ACT WERE INVALID. 8. THE TRIBUNAL GAVE DETAILED REASONS FOR CONCLUDING T HAT THE PROCEEDINGS UNDER SECTION 147 WERE INVALID. INSTEAD OF ADDING ANYTHING TO THE SAI D REASONS, WE THINK IT WOULD BE APPROPRIATE IF THE SAME ARE REPRODUCED: 'IN THE CASE AT HAND, AS IS SEEN FROM THE REASONS R ECORDED BY THE AO, WE FIND THAT THE AO HAS MERELY S TATED THAT IT HAS BEEN INFORMED BY THE DIRECTOR OF INCOME-TAX (INV.), NEW DELHI, VIDE LETTER DATED 16.06.2006 THAT THE A BOVE NAMED COMPANY WAS INVOLVED IN GIVING AND TAKING BOGUS ENT RIES/TRANSACTIONS DURING THE RELEVANT YEAR, WHICH I S ACTUALLY UNEXPLAINED INCOME OF THE ASSESSEE COMPANY. THE AO HAS FURTHER STATED THAT THE ASSESSEE COMPANY HAS FA ILED TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS AND SOU RCE OF THESE FUNDS ROUTED THROUGH BANK ACCOUNT OF T HE ASSESSEE COMPANY. IN THE REASONS RECORDED, IT IS NOWHERE MEN TIONED AS TO WHO HAD GIVEN BOGUS ENTRIES/TRANSACTIONS TO THE ASSESSEE OR TO WHOM THE ASSESSEE HAD GIVEN BOGUS EN TRIES OR TRANSACTIONS. IT IS ALSO NOWHERE MENTIONED AS TO ON WHICH DATES AND THROUGH WHICH MODE THE BOGUS ENTRIE S AND TRANSACTIONS WERE MADE BY THE ASSESSEE. WHAT WAS THE INFORMATION GIVEN BY THE DIRECTOR OF INCOME-TAX (INV.), NEW DELHI, VIDE LETTER DATED 16.06.2006 HA S ALSO NOT BEEN MENTIONED. IN OTHER WORDS, THE CONTENTS OF THE LETTER DATED 16.06.2006 OF THE DIRECTOR OF INCOME-TAX (INV.), NE W DELHI HAVE NOT BEEN GIVEN. THE AO HAS VAGUELY REF ERRED TO CERTAIN COMMUNICATIONS THAT HE HAD RECEIVED FROM THE DIT(IN V.), NEW DELHI; THE AO DID NOT MENTION THE FACTS ME NTIONED IN THE SAID COMMUNICATION EXCEPT THAT FROM THE INFORMATION S GATHERED BY THE DIT (INV.), NEW DELHI THAT THE AS SESSEE WAS INVOLVED IN GIVING AND TAKING ACCOMMODATION ENTRIES ONLY AND REPRESENTED UNSECURED MONEY OF THE ASSESS EE COMPANY IS ACTUALLY UNEXPLAINED INCOME OF THE ASSESSEE COMP ANY OR THAT IT HAS BEEN INFORMED BY THE DIRECTOR OF INCOME-TAX (INV.), NEW DELHI VIDE LETTER DATED 16.06.2006 THAT THE ASSESSEE COMPANY WAS INVOLVED IN GIVING AND TA KING BOGUS ENTRIES/TRANSACTIONS DURING THE RELEVANT FINANCIAL YEAR. THE AO DID NOT MENTION THE DETAILS OF TRANSAC TIONS THAT REPRESENTED UNEXPLAINED INCOME OF THE ASSESSEE COMP ANY. THE INFORMATION ON THE BASIS OF WHICH THE AO H AS INITIATED PROCEEDINGS U/S 147 OF THE ACT ARE UNDOUBTEDLY VAGU E AND UNCERTAIN AND CANNOT BE CONSTRUED TO BE SUFFI CIENT AND RELEVANT MATERIAL ON THE BASIS OF WHICH A REASONABL E PERSON COULD HAVE FORMED A BELIEF THAT INCOME HAD ESCAPED ASSESSMENT. IN OTHER WORDS, THE REASONS RECORDED BY THE AO ARE TOTALLY VAGUE, SCANTY AND AMBIGUOUS. TH EY ARE NOT 16 ITA NO. 799/KOL/2018 SHRI UDIT KUMAR DUGAR, AY 2012-13 CLEAR AND UNAMBIGUOUS BUT SUFFER FROM VAGUENESS. TH E REASONS RECORDED BY THE AO DO NOT DISCLOSE THE AO 'S MIND AS TO WHAT WAS THE NATURE AND AMOUNT OF TRANSACTION OR EN TRIES, WHICH HAD BEEN GIVEN OR TAKEN BY THE ASSESSE E IN THE RELEVANT YEAR. THE REASONS RECORDED BY THE AO ALSO DO NOT DISCLOSE HIS MIND AS TO WHEN AND IN WHAT MOD E OR WAY THE BOGUS ENTRIES OR TRANSACTIONS WERE GIVEN OR TAKEN B Y THE ASSESSEE. FROM THE REASONS RECORDED, NOBODY C AN KNOW WHAT WAS THE AMOUNT AND NATURE OF BOGUS ENTRIES OR TRANS ACTIONS GIVEN AND TAKEN BY THE ASSESSEE IN THE RELE VANT YEAR AND WITH WHOM THE TRANSACTION HAD TAKEN PLACE. AS ALREA DY NOTED ABOVE, IT IS WELL SETTLED THAT ONLY THE RE ASONS RECORDED BY THE AO FOR INITIATING PROCEEDINGS U/S 147 OF THE AC T ARE TO BE LOOKED AT OR EXAMINED FOR SUSTAINING OR SETTING ASIDE A NOTICE ISSUED U/S 148 OF THE ACT. THE REASONS ARE R EQUIRED TO BE READ AS THEY WERE RECORDED BY THE AO. NO SUBSTITUTION OR DELETION IS PERMISSIBLE. NO ADDITION CAN BE MADE TO THOSE REASONS. THEREFORE, THE DETAILS OF ENTRIE S OR AMOUNT MENTIONED IN THE ASSESSMENT ORDER AND IN RESPECT OF WHICH ULTIMATE ADDITION HAS BEEN MADE BY THE AO, C ANNOT BE MADE A BASIS TO SAY THAT THE REASONS RECORDED BY THE AO WERE WITH REFERENCE TO THOSE AMOUNTS MENTIONED IN T HE ASSESSMENT ORDER. THE REASONS RECORDED BY THE AO ARE TOTALLY S ILENT WITH REGARD TO THE AMOUNT AND NATURE OF BOGUS ENTRIES AND TRANSACTIONS AND THE PERSONS WITH WHOM THE TRANSACT IONS HAD TAKEN PLACE. IN THIS RESPECT, WE MAY RELY UPON THE DECISION OF HON'BLE JURISDICTIONAL DELHI HIGH COURT IN THE CASE OF CIT V. ATUL JAIN [2000] 299 ITR 383 , IN WHICH CASE THE INFORMATION RELIED UPON BY THE AO FOR INITIATING PR OCEEDINGS U/S 147 OF THE ACT DID INDICATE THE SOURC E OF THE CAPITAL GAIN AND NOBODY KNEW WHICH SHARES WERE TRANSACTED A ND WITH WHOM THE TRANSACTION HAS TAKEN PLACE AND IN THAT CASE THERE WERE ABSOLUTELY NO DETAILS AVAILABLE AND THE INFORMATION SUPPLIED WAS EXTREMELY SCANTY AND VAGUE AND IN THAT LIGHT OF THOSE FACTS, THE HON'BLE JURISDICTIONAL DE LHI HIGH COURT HELD THAT INITIATION OF PROCEEDINGS U/S 147 OF THE ACT BY THE AO WAS NOT VALID AND JUSTIFIED IN THE EYES OF L AW. THE RECENT DECISION OF HON'BLE JURISDICTIONAL H IGH COURT OF DELHI IN THE CASE OF SIGNATURE HOTELS (P.) LTD. (SUPRA) ALSO SUPPORTS THE VIEW WE HAVE TAKEN ABOVE.' 9. WE DO NOT SEE ANY REASON TO DIFFER WITH THE VIEW EX PRESSED BY THE TRIBUNAL. NO SUBSTANTIAL QUESTION OF LAW ARISES FOR OUR CONSIDERATION. THE APPEALS AR E DISMISSED. THERE SHALL BE NO ORDER AS TO COSTS . 11. THE JURISDICTIONAL HIGH COURT IN THE CASE OF PRINC IPAL CIT VS G&G PHARMA INDIA LTD. IN ITA 545/2015 VIDE ORDER DT. 08.10.2015 AT P ARAS 12 AND 13 WAS HELD AS FOLLOWS: 12. IN THE PRESENT CASE, AFTER SETTING OUT FOUR EN TRIES, STATED TO HAVE BEEN RECEIVED BY THE ASSESSEE ON A SINGLE DATE I.E. 10 TH FEB. 2003, FROM FOUR ENTRIES WHICH WERE RECEIVED B Y THE ASSESSEE ON A SINGLE DATE I.E. 10 TH FEB. 2003, FROM FOUR ENTRIES WHICH WERE TERMED AS ACCOMMODATIO N ENTRIES, WHICH INFORMATION WAS GIVEN TO HIM BY TH E DIRECTOR INVESTIGATION, THE A.O. STATED: I HAVE AL SO PERUSED VARIOUS MATERIALS AND REPORT FROM INVEST IGATION WING AND ON THAT BASIS IT IS EVIDENT THAT THE ASSESSEE C OMPANY HAS, INTRODUCED ITS OWN UNACCOUNTED MONEY IN ITS BANK ACCOUNT BY WAY OF ABOVE ACCOMMODATION ENTRIES. THE ABOVE CONCLUSION IS UNHELPFUL IN UNDERSTANDING WHE THER THE A.O. APPLIED HIS MIND TO THE MATERIALS THAT HE TALKS ABO UT PARTICULARLY SINCE HE DID NOT DESCRIBE WHAT THOS E MATERIALS WERE. ONCE THE DATE ON WHICH THE SO CALLED ACCOMMODATION ENTRIES WERE PROVIDED IS KNOWN, IT WOULD NOT HAVE B EEN DIFFICULT FOR THE A.O., IF HE HAD IN FACT UNDERTAKEN THE EXER CISE, TO MAKE A REFERENCE TO THE MANNER IN WHICH TH OSE VERY ENTRIES WERE PROVIDED IN THE ACCOUNTS OF THE ASSESSEE, WHIC H MUST HAVE BEEN TENDERED ALONG WITH THE RETURN, WH ICH WAS FILED ON 14 TH NOVEMBER, 2004 AND WAS PROCESSED U/S 143(3) OF THE ACT. WITHOUT FORMING A PRIMA FACIE OPINION, ON THE BASIS OF SUCH MATERIAL, IT WAS NOT POSSIBLE FOR THE A.O. TO HAVE SIMPLY CONCLUDED: IT IS EVIDENT THAT THE ASSE SSEE COMPANY HAS INTRODUCED ITS OWN UNACCOUNTED MONEY IN ITS BANK BY WAY OF ACCOMMODATION ENTRIES. IN THE CONSIDERED V IEW OF THE COURT, IN LIGHT OF THE LAW EXPLAINED WITH SUFFICIEN T CLARITY BY THE SUPREME COURT IN THE DECISION DISC USSED, THE BASIC REQUIREMENT THAT THE A.O. MUST APPLY HIS MIND TO THE MATERIALS IN ORDER TO HAVE REASONS TO BELIEVE THAT THE INCOME OF THE ASSESSEE ESCAPED ASSESSMENT IS MISSING IN THE P RESENT CASE. 13. A PERUSAL OF THE REASONS RECORDED DEMONSTRATE TOTAL NON APPLICATION OF MIND BY THE A.O. THUS APPLYING THE PROPOSITION LAID DOWN BY THE JURISDICTIONAL HIG H COURT IN G&G PHARMA INDIA (SUPRA) WE HOLD THAT TH E REOPENING OF ASSESSMENT IS BAD IN LAW 12. PER CONTRA, THE LD. DR SUPPORTING THE ORDER OF THE AUTHORITIES BELOW SUBMITTED THAT THOUGH THE ASSESSEE CLAIMED LTCG FROM SALE OF SHARE S WHICH HAPPENED ON THE PLATFORM OF STOCK EXCHANGE STILL THE ABNORMAL PRICE RISE OF SCR IPS DEFIES ALL LOGIC AND IS AGAINST HUMAN 17 ITA NO. 799/KOL/2018 SHRI UDIT KUMAR DUGAR, AY 2012-13 PROBABILITIES. AND WHILE ADJUDICATING THE LTCG CLA IM OF ASSESSEE ONE SHOULD TEST IT ON THE TEST OF HUMAN PROBABILITY AND CITED DECISIONS OF HO NBLE APEX COURT, HIGH COURTS AND TRIBUNAL IN FOLLOWING CASES: I) CIT VS. P. MOHANKALA 291 ITR 278 (SC), II) CIT VS. DURGA PRASAD MORE (1971) 82 ITR 540 (SC), III) SUMATI DAYAL VS. CIT (1995) 214 ITR 801 (SC), IV) DAS & SONS VS. CIT (2003) 264 ITR 435 (DELHI), V) SMT. PHOOLWATI DEVI 314 ITR (AT) 1 (DEL.), VI) CIT VS. N R. PORTFOLIO PVT. LTD. DATED 22.11.2013(D EL.), VII) CHUHAR MAL VS. CIT (1988) 172 ITR 250, VIII) M/S. MONT BLANE PROPERTIES & INDUSTRIES PVT. LTD. , ITA NO. 614/BOM/1987, IX) WI CHADHA VS. CIT (IT) IN ITA NO. 3088 & 3107/DEL/2 005 X) USHA CHANDRESH SHAH VS. ITO, ITAT MUMBAI DATED 26.0 8.2014 FOR AY 2006-07 XI) SOMNATH MAINI VS. ITO (226 100 TTJ 917, XII) SANJAY BIMALCHAND JAIN VS. PR. CIT DATED 10.04.20 17 (BOM.) AND THEREFORE DOES NOT WANT US TO INTERFERE WITH TH E ORDER OF LD. CIT(A). 13. HAVING TAKEN INTO CONSIDERATION THE AFORE SAID JUDICIAL PRECEDENTS AND OTHER CASE LAWS CITED BEFORE US BY BOTH THE PARTIES, IN ORDER TO AP PRECIATE THE LEGAL GROUND RAISED BEFORE US, WE NEED TO LOOK INTO THE REASONS RECORDED BY THE AO BEFORE PROPOSING TO REOPEN THE ASSESSMENT WHICH WE FIND PLACED AT PAGE 2 OF THE PA PER BOOK, WHICH IS REPRODUCED AS UNDER: 18 ITA NO. 799/KOL/2018 SHRI UDIT KUMAR DUGAR, AY 2012-13 19 ITA NO. 799/KOL/2018 SHRI UDIT KUMAR DUGAR, AY 2012-13 14. HAVING PERUSED THE REASONS RECORDED BY THE AO BEFORE REOPENING AND WHEN THE VALIDITY OF THE ORDER U/S. 147 OF THE ACT DEPENDS U PON THE AO RIGHTLY ASSUMING JURISDICTION AS CONTEMPLATED BY LAW TO MAKE AN ORDER OF ASSESSME NT U/S. 147 OF THE ACT, LET US UNDERSTAND THE SETTLED POSITION OF LAW ON THE LEGAL ISSUE AT HAND. WE NOTE THAT BEFORE THE AO ASSUMES JURISDICTION TO RE-OPEN IT IS NECESSARY TH AT THE CONDITIONS LAID DOWN IN THE SAID SECTION 147 HAS TO BE SATISFIED VIZ., AO SHOULD REC ORD REASON TO BELIEVE THAT THE INCOME CHARGEABLE TO TAX FOR THAT ASSESSMENT YEAR HAS ESCA PED ASSESSMENT . IF THIS CONDITION IS NOT SATISFIED AT THE FIRST PLACE, THEN IT CANNOT BE SAI D THE AO HAS VALIDLY ASSUMED JURISDICTION U/S. 147 OF THE ACT. THEREFORE, THE QUESTION FOR CONSID ERATION IS WHETHER ON THE BASIS OF THE REASONS RECORDED BY THE AO, HE COULD HAVE VALIDLY R EOPENED THE ASSESSMENT. FOR THAT IT HAS TO BE SEEN AS TO WHETHER THE AO ON THE BASIS OF WHA TEVER MATERIAL BEFORE HIM, [WHICH HE HAD INDICATED IN HIS REASONS RECORDED] HAD REASONS WA RRANT HOLDING A BELIEF THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. IT IS IM PORTANT TO REMEMBER THAT THE REASONS RECORDED BY AO TO REOPEN HAS TO BE EVALUATED ON A STAND-ALONE BASIS AND NO ADDITION/EXTRAPOLATION CAN BE MADE OR ASSUMED, WHIL E ADJUDICATING THE LEGAL ISSUE OF AOS USURPATION OF JURISDICTION U/S. 147 OF THE ACT. MO REOVER, THE PARLIAMENT HAS GIVEN POWER TO AO TO REOPEN THE ASSESSMENT, IF THE CONDITION PRECE DENT AS DISCUSSED ABOVE ARE SATISFIED, AND NOT OTHERWISE. IT SHOULD BE KEPT IN MIND THAT T HE CONCEPT OF ASSESSMENT IS GOVERNED BY THE TIME-BARRING RULE AND THE ASSESSEE ACQUIRES A R IGHT AS TO THE FINALITY OF PROCEEDINGS. QUEITUS OF THE COMPLETED ASSESSMENT IS THE FUNDAMEN TAL RULE AND EXCEPTION TO THIS RULE IS RE-OPENING OF ASSESSMENT BY AO UNDER SECTION 147 OR EXERCISE OF REVISIONAL JURISDICTION BY CIT UNDER SECTION 263 OF THE ACT. THEREFORE, THE P ARLIAMENT IN ITS WISDOM HAS PROVIDED SAFEGUARDS FOR EXERCISE OF THE REOPENING OF ASSESSM ENT JURISDICTION TO AO; AND REVISIONAL JURISDICTION OF CIT BY PROVIDING CONDITION PRECEDEN T WHICH IS SINE QUA NON FOR ASSUMPTION/USURPATION OF JURISDICTION. IN THE CASE OF REOPENING OF ASSESSMENT, THE REASON TO BELIEVE ESCAPEMENT OF INCOME IS THE JURISDICTIONAL FACT AND LAW (MIXED QUESTION OF FACT AND LAW) AND FOR REVISIONAL JURISDICTION THE ORDER OF T HE AO SHOULD BE ERRONEOUS AS WELL AS PREJUDICIAL TO THE REVENUE. UNLESS THE CONDITION P RECEDENT IS NOT SATISFIED, THE AO OR THE CIT CAN EXERCISE THEIR REOPENING JURISDICTION OR RE VISIONAL JURISDICTION RESPECTIVELY. THE LEGISLATIVE HISTORY IS THAT IN RESPECT TO THE REOPE NING U/S. 147 OF THE ACT, THE PARLIAMENT BY 20 ITA NO. 799/KOL/2018 SHRI UDIT KUMAR DUGAR, AY 2012-13 DIRECT TAX LAWS (AMENDMENT) ACT 1987 W.E.F. 01.04.1 989 HAD SUBSTITUTED FOR REASON TO BELIEVE ESCAPEMENT OF INCOME TO FOR REASONS TO BE RECORDED BY HIM IN WRITING, IS OF THE OPINION WHICH GAVE UNBRIDLED SUBJECTIVE SATISFACTION TO TH E AO WAS LATER SUBSTITUTED BACK TO REASON TO BELIEVE ESCAPEMENT OF INCOME , BY HE DIRECT TAX LAWS (AMENDMENT) ACT, 1989. THE HONBLE APEX COURT AS WELL AS THE HONBLE JURISDICTIONAL HIGH COURT AS WELL AS OTHER HONBLE HIGH COURTS HAVE ALREADY HELD IN PLET HORA OF CASES THE TEST OF A PRUDENT PERSON INSTRUCTED IN LAW IN UNDERSTANDING JURISDICT IONAL FACT AND LAW (MIXED QUESTION OF FACT AND LAW) THE REASON TO BELIEVE ESCAPEMENT OF INCOME (SUPRA). 15. THE AO, WHO IS A QUASI JUDICIAL AUTHORITY IS EMPOWE RED TO REOPEN THE COMPLETED ASSESSMENT ONLY IN A GIVEN CASE WHEREIN THERE IS RE ASON TO BELIEVE ESCAPEMENT OF CHARGEABLE INCOME TO TAX WHICH IS THE JURISDICTIONAL FACT & LA W AND SINE QUA NON TO ASSUME JURISDICTION TO REOPEN A COMPLETED ASSESSMENT. IT MUST BE KEPT I N MIND THAT REASONS TO BELIEVE POSTULATES FOUNDATION BASED ON INFORMATION AND BELIEF BASED ON REASON. EVEN IF THERE IS FOUNDATION BASED ON INFORMATION THERE MUST BE SOME REASON WARR ANT HOLDING THE BELIEF THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. IT HAS T O BE KEPT IN MIND THAT THE HONBLE SUPREME COURT IN GANGA SARAN & SONS P. LTD. VS. ITO (1981) 130 ITR 1 (SC) HELD THAT THE EXPRESSION REASON TO BELIEVE OCCURRING IN SEC. 147 IS STRONGER THAN THE EXPRESSION IF SATISFIED AND SUCH REQUIREMENT HAS TO BE MET BY TH E AO IN THE REASONS RECORDED BEFORE USURPING THE JURISDICTION U/S. 147 OF THE ACT. IT MUST BE KEPT IN MIND THAT INFORMATION ADVERSE AGAINST THE ASSESSEE MAY TRIGGER REASON TO SUSPECT THEN THE AO IS DUTY BOUND TO MAKE REASONABLE ENQUIRY TO COLLECT MATERIAL WHICH W OULD MAKE HIM BELIEF THAT THERE IS IN FACT AN ESCAPEMENT OF INCOME. 16. SO THE CONDITION PRECEDENT AS DISCUSSED ABOVE IS TH E JURISDICTIONAL FACT & LAW, WHICH IS SINE QUA NON FOR THE AO TO SUCCESSFULLY USURP THE JURISDICTION U/S. 147 OF THE ACT AND IT HAS TO BE ALSO KEPT IN MIND THAT THE JURISDICTIONA L FACT (MIXED QUESTION OF FACT AND LAW) REFERRED TO IN SECTION 147 OF THE ACT I.E REASON TO BELIEVE ESCAPEMENT OF INCOME SHOULD BE THAT OF AO AND NOT THAT OF ANY OTHER AUTHORITY, BEC AUSE THEN IT WILL BE AGAINST ONE OF THE BASIC FEATURE OF THE CONSTITUTION OF INDIA IE, THE RULE OF LAW, WHEREIN THE PARLIAMENT HAS EMPOWERED THIS REOPENING JURISDICTION ONLY TO THAT OF ASSESSING OFFICER AND THAT IS WHY IF 21 ITA NO. 799/KOL/2018 SHRI UDIT KUMAR DUGAR, AY 2012-13 THE REASON TO BELIEVE ESCAPEMENT OF INCOME IS NOT THAT OF AO, THE ASSUMPTION OF JURISDICTION TO RE-OPEN, HAS BEEN HELD TO BE VITIATED AND RESUL TANTLY BAD IN LAW, SINCE IT WILL BE ON THE BASIS OF BORROWED SATISFACTION. 17. FROM THE AFORESAID UNDERSTANDING OF LAW GOVERNING T HE ISSUE AT HAND, WE HAVE TO EXAMINE THE REASONS ALREADY SET OUT ABOVE AND TEST WHETHER THE CONDITION PRECEDENT NECESSARY TO USURP THE RE-OPENING JURISDICTION CAN BE DISCERNED FROM PERUSAL OF THE REASONS RECORDED BY THE AO IN THE INSTANT CASE (SUPRA). FRO M THE GIST OF THE REASONS RECORDED BY THE AO, WE UNDERSTAND THAT THE AO RECEIVED INFORMATION FROM DIT (INV.), KOLKATA DATED 21.09.2015 THAT THE INVESTIGATION CARRIED OUT BY TH E DIRECTORATE REVEALED THAT A VERY LARGE NUMBER OF PERSONS HAD TAKEN ENTRIES OF HUGE BOGUS L ONG TERM CAPITAL GAIN IN AN ORGANIZED MANNER THROUGH SHARE TRANSACTIONS OF PENNY STOCK CO MPANIES LISTED WITH CALCUTTA STOCK EXCHANGE WITH THE INVOLVEMENT OF THE PROMOTERS OF T HE PENNY STOCK COMPANIES, UNSCRUPULOUS BROKER AND ENTRY OPERATORS. IN THE RE ASONS RECORDED IT WAS ALSO STATED THAT THE AFORESAID LETTER WAS ACCOMPANIES BY CD WHICH CONTAI NS INVESTIGATION REPORT, DETAILS OF TRANSACTION AND OTHER RELATED INFORMATION. IN THE REASONS RECORDED, THE AO NOTICED THAT THE INVESTIGATION BY THE DIT(INV.) FOCUSED ON NINE PENN Y STOCK COMPANIES WHICH WERE LISTED WITH THE CALCUTTA STOCK EXCHANGE AND THEN AFTER NAR RATING THE GENERAL MODUS OPERANDI OF THESE UNSCRUPULOUS PEOPLE THE AO NOTES THAT THE INV ESTIGATION CARRIED OUT BY THE DIT(INV.) REVEALED THAT THE SHARE PRICE OF M/S. BAKRA PRATIST HAN LTD. (HEREINAFTER BPL) IS ONE OF THE PENNY STOCK COMPANIES LISTED WITH THE CALCUTTA STOC K EXCHANGE WHICH WAS ALSO ARTIFICIALLY RIGGED TO PROVIDE ENTRY OF BOGUS LTCG AND AS PER TH E INFORMATION OF DIT, THE ASSESSEE HAD TRANSACTED IN SHARES OF M/S. BPL DURING AY 2012-13 AND ACCORDINGLY THEASSESSEE IS ONE OF THE BENEFICIARY. ACCORDING TO INVESTIGATION BY THE DIT THE AO NOTES THAT THERE WAS A TOTAL SALE OF SHARES OF M/S. BPL BY THE ASSESSEE INVOLVIN G TRADE VALUE OF RS.2,38,54,750/- AND ACCORDING TO AO, THIS INFORMATION SUGGESTS LONG TER M CAPITAL GAIN BY THE ASSESSEE FOR THIS AMOUNT. AFTER TAKING NOTE OF THE INFORMATION FROM DIT (INV.), THE AO IN THE REASONS RECORDED OPINES HIS SUSPICION IN HIS OWN WORDS STATES MOREOVER, THE TRANSACTIONS CANNOT BE CONSIDERED GENUINE MERELY FOR THE REASON THAT THEY WERE CARRIED OUT ON THE EXCHANGE PLATFORM WITH THE INVOLVEMENT OF REGISTERED BROKER THROUGH BANKING CHANNEL IN A KNOWN 22 ITA NO. 799/KOL/2018 SHRI UDIT KUMAR DUGAR, AY 2012-13 SEQUENCE WITH NO APPARENT ABERRATIONS. THEREAFTER, IN THE REASONS RECORDED HE REFERS TO HONBLE APEX COURT DECISION IN CIT VS. DURGA PRASAD MORE (1971) 82 ITR 540 (SC) AND EXPRESS HIS OPINION THE TAXING AUTHORITIES ARE ENTI TLED TO LOOK INTO THE SURROUNDING CIRCUMSTANCES TO FIND OUT THE REALITY (WHICH MEANS THE AO HAS NOT FORMED THE BELIEF THAT THERE IS REASON TO BELIEVE ESCAPEMENT OF INCOME, HO WEVER NEEDS FURTHER PROBE) AND THEREAFTER THE AO OBSERVES THAT THE MATTER IS TO B E CONSIDERED BY APPLYING THE TEST OF HUMAN PROBABILITIES. THEREAFTER REFERRING TO THE HONBLE SUPREME COURT DECISION IN THE CASE OF SUMATI DAYAL VS. CIT (1995) 214 ITR 801 (SC) AND I N THE CASE OF CIT VS. P. MOHANKALA 291 ITR 278, HE CONCLUDES THAT IN VIEW OF THE ABOVE FACTS AND AFTER ANALYSING THE INFORMATION AVAILABLE ON RECORD, THE AO SAYS THAT HE HAS REASON TO BELIEVE THAT THE ASSESSEE HAS SUPPRESSED HIS INCOME BY USING LTCG TREATING IT AS EXEMPT TO THE TUNE OF RS.2,38,54,750/- WHICH IS/ARE REPORTED AS BOGUS BY THE DIRECTORATE . (WHICH MEANS THAT AS PER THE REPORT OF DIRECTORATE LTCG CLAIM OF ASSESSE E IS BOGUS) AND THEREAFTER, HE CONCLUDES THAT HE HAS REASON TO BELIEVE THAT INCOME TO THE EX TENT OF RS.2.38 CR. HAS ESCAPED ASSESSMENT. THUS, FROM A READING OF THE REASONS RECORDED BY AO TO JUSTIFY RE-OPENING OF ASSESSMENT, CLEARLY SHOW THAT THE AO HAS TAKEN NOTE OF THE INF ORMATION FROM THE DIT(INV.) AND TAKEN THE CONTENTS OF THE INFORMATION GIVEN BY DIT (INV) AS GOSPEL OF TRUTH AGAINST THE ASSESSEE [WITHOUT ANY VERIFICATION OR ENQUIRY] TO FORM A CON CLUSION ABOUT ESCAPEMENT OF INCOME WITHOUT INDEPENDENT APPLICATION OF MIND BY HIMSELF IS NOTHING BUT AN ACTION TAKEN BY AO BASED ON THE STRENGTH OF BORROWED BELIEF OF DIT (I NV) AND NOT THAT OF AO, WHICH VITIATES THE VERY ASSUMPTION OF JURISDICTION BY AO TO RE-OPEN TH E ASSESSMENT, WHICH FINDING OF US WILL BE CLEAR WHEN WE ANALYZE THE REASONS RECORDED IN DE TAIL INFRA. 18. FROM THE AFORESAID REASONS RECORDED BY AO IT IS EVI DENT THAT OTHER THAN THE GENERAL INFORMATION GIVEN BY DIT (INV) THERE IS NO OTHER MA TERIAL THE AO COLLECTED HIMSELF AFTER PRELIMINARY ENQUIRY WHICH COULD HAVE ENABLED HIM AT THE TIME OF RECORDING REASONS TO COME TO A CONSCIOUS INDEPENDENT CONCLUSION THAT INCOME OF THE ASSESSEE HAS ESCAPED ASSESSMENT . ACCORDING TO US, THE INFORMATION GIVEN BY DIT(I NV) CAN ONLY BE A BASIS TO IGNITE/TRIGGER AND BE THE STARTING POINT TO ENQUIRE ; AND AT THAT STAGE THE INFORMATION OF DIT (INV.) CAN BE TERMED AS A FOUNDATION ONLY TO FORM REASON TO SUSPECT AND NOT REASON TO 23 ITA NO. 799/KOL/2018 SHRI UDIT KUMAR DUGAR, AY 2012-13 BELIEVE ESCAPEMENT OF INCOME WHICH IS THE JURISDICT IONAL FACT & LAW REQUIRED TO ENABLE THE AO TO SUCCESSFULLY ASSUME JURISDICTION TO REOPEN AS ENVISAGED U/S. 147 OF THE ACT. AND THE REASON TO SUSPECT CANNOT BE THE BASIS FOR USURPING JURISDICTION TO REOPEN U/S. 147 OF THE ACT, FOR CONDUCTING ROVING/FURTHER EXAMINATION TO BE RES ORTED BY HIM IN ORDER TO STRENGTHEN THE SUSPICION TO AN EXTENT WHICH CAN LATER TRANSFORM TH E SUSPICION TO CREATE THE BELIEF IN HIS MIND THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSE SSMENT. MERELY ON AN ALLEGATIONS LEVELED BY DIT (INV.), AS IN THIS CASE EXPLAINING T HE GENERAL MODUS OPERANDI CARRIED OUT BY UN-SCRUPULOUS PERSONS IN SUSPECTED TRANSACTIONS TO EARN BOGUS LTCG, CAN ONLY RAISE SUSPICION IN THE MIND OF THE AO (WHICH FACT WE HAVE POINTED OUT EARLIER) WHICH IS NOT SUFFICIENT/REQUIREMENT OF LAW FOR REOPENING OF ASSE SSMENT. IT HAS TO BE KEPT IN MIND THAT THE REASONS TO BELIEVE IS NOT SYNONYMOUS TO REASON TO SUSPECT . REASON TO SUSPECT BASED ON AN INFORMATION CAN TRIGGER AN ENQUIRY SO THAT IT CA N BE FOUND OUT WHETHER THERE IS ANY SUBSTANCE OR MATERIAL TO SUBSTANTIATE THAT THERE IS MERIT IN THE INFORMATION ADDUCED BY THE DIT(INV.) AND AFTER POST ENQUIRY THE AO HAS TO TAKE AN INDEPENDENT DECISION WHETHER TO RE- OPEN THE ASSESSMENT OR NOT. AND AT THE COST OF REPE TITION WE SAY THAT THE AO SHOULD NOT ACT ON DICTATE OF ANY OTHER AUTHORITY LIKE IN THIS CASE FROM DIT (INV.) BECAUSE THEN IT WOULD BE BORROWED SATISFACTION OF THE JURISDICTIONAL FACT & LAW WHICH IS NOT PERMITTED BY LAW AND CONSEQUENTLY VITIATE THE ASSUMPTION OF JURISDICTION BY AO TO REOPEN U/S. 147 OF THE ACT. IN THIS CASE, AS DISCUSSED ABOVE, WE NOTE THAT THE AO AFTER REFERRING TO THE INVESTIGATION REPORT CONCLUDES THAT THE INFORMATION GIVEN BY THE DIT (IN V.) NEED TO BE LOOKED INTO FROM THE SURROUNDING CIRCUMSTANCES TO FIND OUT THE REALITY F ROM THE ANGLE OF HUMAN PROBABILITY. THEREAFTER, THE AO SAYS THAT HE HAS REASON TO BELIE VE THAT THE ASSESSEE HAD SUPPRESSED ITS INCOME BY USING LTCG TREATING IT AS EXEMPTED TO THE TUNE OF RS.2,38,54,450/-; WHICH IS/ARE REPORTED AS BOGUS BY THE DIRECTORATE. SO IT IS CLE AR FROM THE AFORESAID AVERMENTS THAT AO BASED ON DIRECTORATES REPORT (DIT INVESTIGATIONS REPORT) HAS TAKEN A VIEW THAT LTCG CLAIM OF ASSESSEE IS BOGUS, AND NOT AS PER HIS INDE PENDENT VIEW AFTER A PRELIMINARY ENQUIRY. BECAUSE THE AO HIMSELF RECORDS IN THE REASONS TO RE -OPEN THAT THE CLAIM OF ASSESSEE (LTCG) NEED TO BE LOOKED INTO FROM THE SURROUNDING CIRCUMS TANCES TO FIND OUT THE REALITY , WHICH ADMISSION OF AO GOES ON TO SHOW THAT AO HAD REASON TO SUSPECT ONLY AND NOT REASON TO BELIEVE. THIS STATEMENT OF AO CLEARLY SHOWS THAT TH E INFORMATION GIVEN BY DIT(INV.) NEED 24 ITA NO. 799/KOL/2018 SHRI UDIT KUMAR DUGAR, AY 2012-13 FURTHER PROBE TO FIND OUT THE REALITY. SO THE AO A DMITS THAT THE INFORMATION GIVEN BY DIT(INV.) HAS NOT RENDERED HIM TO MAKE UP HIS MIND TO BELIEVE THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. AT THE COST OF REPETITI ON WE SAY THAT AN ADVERSE INFORMATION AGAINST AN ASSESSEE MAY TRIGGER REASON TO SUSPECT , AS IN THIS CASE WAS, AND IT WAS INCUMBENT ON HIS PART PURSUANT TO THE INFORMATION REACHING HIS HAND (AO), TO MAKE REASONABLE ENQUIRY AND COLLECT MATERIAL WHICH COULD MAKE HIM BELIEVE, THAT THERE IS IN FACT AN ESCAPEMENT OF INCOME, WHICH EXERCISE AO ADMITTE DLY DID NOT DO AND HAS BLINDLY COPIED THE CONTENTS OF THE DIT(INV) REPORT AND PROCEEDED T O REOPEN THE ASSESSMENT/ INTIMATION PASSED U/S. 143(1) WHICH ACTION OF AO CANNOT BE COU NTENANCED. IN OTHER WORDS, WHEN THE AO WAS IN RECEIPT OF THE INFORMATION FROM THE DIT(I NV.) HE OUGHT TO HAVE MADE REASONABLE ENQUIRY AND COLLECT MATERIALS WHICH WOULD MAKE HIM BELIEVE, THAT THERE IS ESCAPEMENT OF INCOME. AS STATED EARLIER, IT HAS TO BE REMEMBERED THAT INFORMATION IS NOT SYNONYMOUS TO TRUTH. AT THE COST OF REPETITIONS, WE NOTE THAT AO SIMPLY ON THE BASIS OF THE INVESTIGATION REPORT OF DIT (INV.) HAS JUMPED INTO CONCLUSION THA T THERE IS AN ESCAPEMENT OF INCOME WHICH IS ERRONEOUS SINCE IT DOES NOT SATISFY THE JU RISDICTIONAL FACT AND LAW FOR REOPENING AS ENVISAGED U/S. 147 OF THE ACT. THE AO SIMPLY TAKING NOTE OF THE DIT(INV.) LETTER HAS BORROWED THE SATISFACTION WITHOUT INDEPENDENT APPLI CATION OF MIND TO FORM REASON WARRANT HOLDING A BELIEF THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. JUST BECAUSE A LETTER HAS BEEN RECEIVED FROM THE DIT(INV.) THE AO CANNOT REOPEN THE ASSESSMENT EVEN IF ORIGINAL ASSESSMENT WAS U/S. 143(1) OF THE ACT. IN THE LIGH T OF THE ABOVE, THE AO BASED ON THE REASONS RECORDED AS SET OUT ABOVE COULD NOT HAVE IN ITIATED A FISHING ENQUIRY TO FIND OUT THE VERACITY OF THE INFORMATION GIVEN BY THE DIT(INV.). THE REASONS RECORDED BY AO DOES NOT STAND THE TEST AS LAID BY PLETHORA OF JUDICIAL PREC EDENCE AS DISCUSSED ABOVE WHICH IS SINE QUA NON TO ASSUME JURISDICTION U/S 147 OF THE ACT, THER EFORE, IN THE LIGHT OF THE AFORESAID FACTS AND CIRCUMSTANCES OF THE CASE AS DISCUSSED, WE FIND THAT THE REASONS RECORDED BY THE AO TO JUSTIFY REOPENING THE ASSESSMENT U/S. 147 FAILS AND , THEREFORE, THE VERY ASSUMPTION OF JURISDICTION TO REASSESS THE ASSESSEE FALLS. SINCE THE AO FAILED TO VALIDLY ASSUME JURISDICTION U/S. 147 OF THE ACT, THE ASSUMPTION OF JURISDICTION BY HIM TO RE-OPEN THE ASSESSMENT ITSELF IS QORUM NON JUDICE AND, THEREFORE, ALL SUBSEQUENT ACT ION IS NULL IN THE EYES OF LAW AND THEREFORE, WE QUASH THE REOPENING AND CONSEQUENT RE ASSESSMENT ORDER FRAMED BY HIM. 25 ITA NO. 799/KOL/2018 SHRI UDIT KUMAR DUGAR, AY 2012-13 19. FURTHER AN IMPORTANT FACT WAS BROUGHT TO OUR NOTICE THAT IF THE AO HAD MADE SOME ENQUIRY (PRE-REOPENING) AT LEAST THEN HE WOULD HAVE DEFINITELY STUMBLED ACROSS THE ORDER OF THE TRIBUNAL PASSED IN ACIT VS. SWASTIK S. GHUWALEW ALA IN ITA NO. 92/KOL/2012 FOR AY 2004-05 WHEREIN THE TRIBUNAL HAS HELD THAT THE PURC HASE AND SALE OF SHARES OF M/S. BAKRA PRATISTHAN LTD. (M/S. BPL) IS NOT BOGUS VIDE ORDER DATED 23.05.2013 AND WE NOTE THAT THE INSTANT REOPENING NOTICE WAS ISSUED BY AO ON 28.03. 2017. SO IN THE LIGHT OF TRIBUNAL ORDER IN RESPECT TO THE SCRIP IN LIS, QUESTION OF REOPENI NG WOULD ARISE OR NOT AT THE FIRST INSTANCE SHOULD HAVE BEEN TAKEN INDEPENDENT BY THE AO, WHICH HE HAS NOT DONE AS DISCUSSED (SUPRA). THEREFORE, RESPECTFULLY APPLYING THE PROPOSITIONS O F LAW LAID DOWN IN THE JUDGMENTS CITED ABOVE TO THE FACTS OF THE CASE, WE HAVE NO OTHER AL TERNATIVE BUT TO HOLD THAT THE REOPENING OF THE ASSESSMENTS IS BAD IN LAW AND WE QUASH THE IMPU GNED REOPENING PROCEEDINGS AND CONSEQUENTIAL REASSESSMENT. 20. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWE D. ORDER IS PRONOUNCED IN THE OPEN COURT ON 03/05/201 9 SD/- SD/- (DR. A. L. SAINI) (A. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 3RD MAY, 2019 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 APPELLANT SHRI UDIT KUMAR DUGAR, 34, ROWLAND ROW , 4 TH FLOOR, FLAT NO. 4C, KOLKATA- 700020. 2 RESPONDENT ITO, WARD-36(4), KOLKATA. 3 4 5 CIT(A)-10, KOLKATA. (SENT THROUGH E-MAIL) CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA (SENT THROUGH E-MAIL) / TRUE COPY, BY ORDER, ASSISTANT REGISTRAR