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The Ahmedabad bench of ITAT in 82ITR (Trib) (S.N.) 32 has been candid in pointing out that the AO can compel a person to file return u/s 147 only in the event of escapement of income. It further opined that without cogent reasons for his belief of escapement even a person who has not filed the return cannot be forced to file a return.

Now that the Government has initiated an all-inclusive 26AS account statement of transactions of the assessee it may so happen that it reports certain transactions that have no income tax implications like an investment in a fixed deposit or say the purchase of a vehicle out of tax paid funds or out of legitimate gifts. Unless the AO has a cogent reason for his belief of escapement and he also discharges such burden at the time of issuing a notice there is no way that he can issue a notice. To discharge a burden he has to put down in black and white the material he possesses against the assessee and also record his belief of escapement drawn out of such material. Any missing link between the two could give ground for a legal challenge.

This case concerns transactions of a cash deposit in bank by the salaried person and relating the same to vague information about share transactions by the assessee without specific/.proper identification and quantification of alleged escaped income

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