AO can reopen the case u/s 147 where assessee has not filed return : HC
The reopening of assessment u/s 147 on the basis of information in the form of observations of ITAT is on sound footing and which constitutes a tangible material for the purpose of reopening as the assessee did not file her return of income as required u/s 139(1) of the Act explaining the source of investment.
Bombay High Court in matter of Smt. S. Rajalakshmi, Indian Inhabitant v/s ITO
The Extract of Bombay High court Judgement is given below for referance :
14. In fact, when one looks at the merits of the matter, it is recorded that the appellant was unable to explain the source of income from which these investments have been made by furnishing her bank statements, and which finding has even not been challenged before us. The only so called explanation given was that since her husband had expired in the year 2011, the records were not available with her to explain the source of these investments. This excuse of the appellant was not believed by the authorities below, and therefore, on merits also they proceeded to make the additions. In fact, if the appellant would have produced the material to show from what source these investments were made, she would have probably succeeded in the proceedings. However, she failed to do so as recorded by the authorities below. This being the case, and since the ITAT in her son’s case accepted the submission that these investments should not be brought to tax in his hands as he was the second holder and they could have been brought to tax, if any, in the hands of the first holder, namely, the appellant, we find that the A.O., in view of these observations of the ITAT, clearly had reason to believe that the income of the appellant with reference to these three investments had escaped assessment. We do not find that this subjective satisfaction of the A.O. suffers from any peversity or is vitiated by any error apparent on the face of the record which, in turn, would give rise to any substantial question of law.
15. In view of the foregoing discussion, we do not find any merit in the appeal. It is accordingly dismissed. However, in the facts and circumstances of the case, there shall be no order as to costs.