2014 (7) TMI 559
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....sued under Section 148 of the Act seeking to reopen the petitioner's assessment for A.Y. 2005-06. On 11 July 2011, the reasons recorded for reopening the assessment for assessment year 2005-06 were furnished to the petitioner. The reasons recorded for reopening assessment read as under: "The assessee company is engaged in trading of various industrial products viz. Crucibles, graphites, spare parts of industry equipments safety equipments, safety masks etc. The suppliers of trading goods of the company both foreign as well as domestics. The clients of the company include Indian Ordinance authorities, DRDO BARC apart from other private corporate. During the scrutiny proceedings in the past assessment years as well as pending scrutiny proceedings for assessment year 2008-09 (pending with Addl. CIT), it is noticed that certain suppliers were found as bogus and additions are made on the issue. For A.Y.2007-08 addition on GP from bogus sales turnover as well as investment in bogus purchase amounting to Rs. 4.76 crores was made and the case is pending before CIT(A). Verification of the suppliers indicated one party M/s. Saileela Trading P. Ltd. from which the assessee had shown pu....
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.... the petitioner 's supplier is a new fact to which no mind had been applied earlier. Thus, it is contended that there was no change of opinion. 4. Mr. Mistry, learned Senior Counsel appearing for the petitioner submits that the grievance of the petitioner to the impugned notice and the reasons recorded both dated 7 December 2010 are as under: a) The impugned notice dated 7 December 2012 has been issued beyond the period of 4 years from the end of the assessment year 2005-06. Such cases are covered by the proviso to Section 147 of the Act and unless there is reason to believe that income chargeable to tax has escaped assessment coupled with the failure on the part of an assessee to disclose truly and fully all material facts necessary for assessment, then such a notice would be beyond jurisdiction. In this case, it is submitted that there was no failure on the part of the petitioner to disclose truly and fully all material facts necessary for assessment; and b) In this case the assessment order dated 27 March 2007 was passed under Section 143(3) of the Act. All the facts were disclosed and the Assessing Officer passed the assessment order dated 27 March 2007 after verifying a....
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....ble that some of the suppliers were not genuine. This is fresh information and acting on the same cannot be said to be change of opinion. In view of the above, it is submitted that the petition may not be entertained. 6. (a) It is well settled that where an efficacious alternative remedy is available to a petitioner, the Court would be slow to exercise its extra ordinary writ jurisdiction as a matter of self restraint. In proceedings for reopening of assessment taken by the revenue it is open to an assessee to contend before the Assessing Officer that the reopening is not sustainable in law and that on merits also the reassessment proceedings are not sustainable. The orders passed by the Assessing Officer for reopening are open to challenge along with the order passed on merits by way of an appeal to the Commissioner of Income Tax (Appeals), thereafter to the Tribunal and if a substantial question of law arises in that case by an appeal to the High Court. Thus, there is an efficacious alternative remedy provided under the Act. (b) However, even where there is an efficacious alternative remedy available under the Act, we do exercise our extra ordinary writ jurisdiction where initi....
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....n of material before the Assessing Officer. In case there is some material for the Assessing Officer to reach a prima facie view that income chargeable to tax has escaped assessment or that the conditions precedent as provided under Section-147 and 148 of the Act are satisfied then the court would not substitute its own judgment to that of the Assessing officer. In such cases it is best to have these issues determined in the first instance by the authorities including the appellate authorities and if so necessary to be examined by High Court in it appellate jurisdiction. (c) Thus we would exercise our writ jurisdiction to interdict a proceeding under Section 148 of the Act seeking to reopen an assessment only when the same is clearly without jurisdiction and not otherwise as a matter of self restraint. We are constrained to reiterate the above long settled position of self restraint in exercise of our extraordinary writ jurisdiction only because we have noticed that in a number of cases the petitioners approach us in our writ jurisdiction as though we are an appeal Court and it is their statutory right that the Court must in all cases interfere with reopening of assessment. We tru....
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.... the truthfulness and/or completeness of the disclosure at the time of original assessment in view of information obtained later the provisions cannot aid the petitioner at the stage of notice under Section 148 of the Act. It is likely that during the assessment proceedings the assessee may be able to satisfy the Assessing Officer that there was a true and full disclosure. Once the Assessing Officer has received information that invoices issued by M/s. Rahul Industries are bogus then the same is necessarily to be the subject matter of enquiry during the reassessment proceedings. The information that bills produced were not genuine does give rise to a reasonable belief in the mind of the Assessing Officer that income chargeable to tax has escaped assessment, as recorded in the reasons as under: "......... The result of survey clearly brings out findings supporting and strengthening the evidences regarding bogus purchase transaction done by the assessee company for year to year. A rough working of Rs. 35 crore (for A.Y. 2005-06 to A.Y. 2010-11) worth of purchases are found to be from parties which are nonexistent/bogus billers. The chart annexed shows the year wise amount of bogus t....
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.... scrutiny proceedings for Assessment Year 2008-09 that information was received that the bills were not genuine. 10. It was next contended that in any view of the matter, the reasons recorded for reopening of the assessment by the Assessing Officer does not record that there was any failure on the part of the petitioner to fully and truly disclose all material facts necessary for assessment. In support, the petitioner made a reference to the decision of this Court in the matter of Hindustan Lever Ltd. vs. R. B.Wadkar, Assistant Commissioner of Income Tax and others (2004) 268 ITR 332. In the above case this Court did observe that there is no averment in the reasons that there has been failure to disclose all material facts necessary for the assessment. However, the above observation proceeded on the basis that the reasons as recorded therein when read as a whole did not indicate any failure to disclose truly and fully all material facts necessary for assessment. It may be useful to reproduce the reasons for reopening given in Hindustan Lever Ltd. (supra) as under: "From the notes to the audited accounts, it is seen that while valuing closing stock, Central Excise and customs duty....