NITESH CHAJJED Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) This Appeal has been filed by the assessee against the order of the Income Tax Appellate Tribunal, "SMS" Bench, Chennai, dated 13.11.2015 passed in I.T.A. No.553/Mds./2015.

(2.) The facts of the case are as follows:-

(3.) Mr. B. Ramanakumar, learned counsel for the appellant would submit that consequent to survey under section 133A in the business premises of one Smt.Leela Surana, a share broker, in a sworn statement, mentioning the name of the appellant as one of her clients from whom she had allegedly received cash payments for the purchase of shares, proceedings were initiated and Notice under section 142(1) was issued on 29.07.2011. However, there was no such transaction with the appellant at all. The learned counsel would also submit that that the re-opening of assessment against the assessee only on the basis of an information gathered from a third party by way of sworn statement do not satisfy the ingredients of the Act viz., "reason to believe". Before issuing any notice u/s 148, the assessing officer must have reason to believe that any income chargeable to tax has escaped assessment. Reason to believe can not be a reason to suspect merely. There must be a direct relation between the material coming to the notice of the assessing officer and the formation of the belief that there has been escapement of income of the assessee from assessment in a particular year. The material for formation of belief must be relevant and not vague. The assessing officer must record reasons in writing before issuing notice u/s 148. Mere a reason recorded that "there is concealment of income' without any specific instance of entries or material relevant to the assessee will not constitute a valid reason as it is vague and general in nature. The next submission of the learned counsel is that while section 142(1) proceedings were pending, another notice under section 148 was issued on 209.2011.