Can suspicion be a ground to reopen on assessment u/s 147

This query is : Resolved

CA. Prashanth Kumar Jain (Querist)
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29 April 2010 Can an Assessing officer reopen the assessment completed u/s 143(3) of the Income Act by recording reason saying few transctions in bank account are of suspicious nature hence it is necessary to reopen the assessment ? can any one explain

NISHIT A. DOSHI

NISHIT A. DOSHI (Expert)
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05 May 2010 If the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or recompute the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year) :

Provided that where an assessment under sub-section (3) of section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment for that assessment year.

So, after reading the bear provision, in my opinion mere suspicion on the part of the assessing officer would not allow him to go for reassessment u/s 147 of Income-Tax Act,1961.

REGARDS,
NISHIT DOSHI