TaxTMI 
TaxTMI 
2012 (4) TMI 273
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....ly stated, the reasons are as follows : (i) During the course of the scrutiny assessment for Assessment Year 2008-2009, the Assessing Officer came to know of the fact that the assessee had lodged a First Information Report (FIR) on 16 March, 2006 against Mr. Jagmohan Dalmiya, the then Secretary of the Board of Control for Cricket in India and others inter alia for misappropriation of funds; (ii) The FIR was transferred to the Economic Offences Wing (EOW), Crime Branch, CID, Mumbai and was investigated since 21 March, 2007. The FIR sets out that in order to conduct the World Cup cricket tournament in 1996, a Committee called PILCOM was formed amongst Pakistan, India and Srilanka of which Mr. Jagmohan Dalmiya, the then Secretary of BCCI was appointed as Convener Secretary. Another Committee in India called INDCOM was formed for the purpose of disbursing prize money to the teams and players; (iii) A chargesheet was filed against Mr. Jagmohan Dalmiya by the EOW in the Court of the Additional Chief Metropolitan Magistrate, 19th Court, Esplanade, Mumbai in which it is alleged that Mr. Dalmiya and certain others had committed offences inter alia punishable under sections 409, 420....
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....beyond a period of four years of the end of the relevant assessment year. Since the assessment was completed under Section 143(3), the proviso to Section 147 would come into operation and the reopening can be justified only if there was a failure on the part of the assessee to fully and truly disclose all material facts necessary for the assessment for that assessment year ; (ii) The FIR filed by the assessee on 16 March, 2006 only dealt with the misuse of funds in the amount of Rs.21,74,606/- for the period between September, 2004 and February, 2006. Therefore, the FIR dealt with facts which pertain to the period after the financial year relevant to Assessment Year 2004-2005; (iii) The EOW in the chargesheet which has been filed before the Additional Chief Metropolitan Magistrate on 26 March, 2008 has alleged misappropriation of funds of Rs.30,79,802/- for Financial Year 2003-2004 (relevant to Assessment Year 2004-2005). The Petitioner obtained knowledge of the filing of the chargesheet only on 22 June, 2011, when the gist of the investigation report was annexed to an affidavit in reply filed by the Revenue in the earlier writ proceedings before this Court under Article 226 ....
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....ee dated 16 March 2006 addressed to the Officer in Charge of Marine Drive Police Station and the FIR lodged on the same date would indicate that the period to which the misappropriation relates also covers Assessment Year 2004-2005. A plain reading of the complaint and the FIR would reveal facts to the contrary to what is asserted by the Petitioner; (iv) The merits of the contentions of the assessee would have to be decided by the Assessing Officer. Therefore, issues such as whether the assessee had applied its income for charitable purposes or whether there is accumulation only to the extent permissible are matters to be decided by the Assessing Officer after the assessment is reopened. In the present case, the only issue is whether there was any material before the Assessing Officer on the basis of which the assessment could be reopened. That material has been brought to the attention of the Assessing Officer after the chargesheet was filed on 26 March 2006. The Assessing Officer obtained knowledge of these facts during the course of assessment proceedings for Assessment Year 2008-2009 and hence, was entitled to reopen the assessment for the Assessment Year 2004-2005 though it....
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....e income of the assessee was misappropriated and was not applied to that extent for charitable purposes. The submission of the counsel for the assessee was based on the foundation that the period covered by the FIR relates to a time span after the conclusion of the financial year relevant to Assessment Year 2004-2005. As we have noted earlier, that is factually incorrect. Be that as it may, the issue before the Court is whether there was material before the Assessing Officer on the basis of which he could have formed reason to believe that income has escaped assessment. As the record would indicate the Assessing Officer has formed that belief on the basis of the material revealed in the investigation which was carried out by the EOW, which eventually resulted in the filing of a chargesheet on 26 March 2008. The chargesheet which has been filed by the EOW would in our view constitute tangible material on the basis of which the Assessing Officer could have reopened the assessment. The Assessing Officer has stated that there was a failure on the part of the assessee to fully and truly disclose material facts necessary for the assessment for the Assessment Year 2004-2005. This conclusi....
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.... unable to say that the said letter could not have constituted the basis for forming such a belief, it cannot be said that the issuance of notice was invalid." 10. On behalf of the petitioners reliance was placed on the judgment of the Division Bench of this Court in S.P. Divekar and A.P. Divekar Vs. Commissioner of Income Tax (Central) 1986 157 ITR 629. The judgment is clearly distinguishable for the reason that as the Division Bench held in that case the memorandum recording reasons for the reopening of the assessment was not produced either before the Appellate Assistant Commissioner or the Tribunal. There was therefore, not even a statement of the Assessing Officer indicating the reasons on the basis of which he had formed the belief that income had escaped assessment. Moreover, the Division Bench noted that there was nothing on record to indicate that the report made by another Income Tax Officer to the Inspecting Assistant Commissioner was before the Assessing Officer when he issued a notice for reopening the assessment under section 34 of the Income Tax Act, 1922. That judgment therefore, is clearly on a situation which was different in law and in fact. 11. In its deci....