2016 (7) TMI 137

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....mpanies Act. For the assessment year 2010-2011, the petitioner had filed a return of income declaring nil income. Such return was accepted without scrutiny in terms of section 139(1)of the Income Tax Act, 1961 ("the Act" for short). To reopen such assessment, the Assessing Officer issued the impugned notice. Before issuing notice, he had recorded following reasons: " In this case information was received from DGIT, Mumbai that Shri Praveen Kumar Jain, Hawala Entry Operator had stated on oath that he had provided accommodation entry to many companies. On scrutiny of list of companies, it is noticed that assessee company has received two accommodation entries of Rs. 10,00,000/- from Alka Diamond Ind.Ltd. (PAN:AAACA5236D) and Rs. 10,00,000/....

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....ve been inquired into. In any case, the petitioner cannot be answerable for such investments. (2) That the Assessing Officer did not apply his mind to various contentions raised by the petitioner in the objections and disposed of objections by an order which cannot be stated to be a speaking order. 5. We may recall, the original return of the assessee was accepted without scrutiny. In that view of the matter, by virtue of the judgment of the Supreme Court in the case of Assistant Commissioner of Income-Tax vs. Rajesh Jhaveri Stock Brokers P.Ltd. reported in 291 ITR 500, the Assessing Officer had considerable latitude while seeking to re-open such assessment. If Assessing Officer had reason to believe that income chargeable to tax had ....

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....he present assessee company who had received accommodation entries worth Rs. 50 lacs from different companies for which the assessee would pay cash on matching sums. It was therefore, that the Assessing Officer recorded his reasons to believe that income chargeable to tax had escaped assessment. In our opinion, such reasons cannot be stated to be irrelevant or mechanically recorded. The Assessing Officer must have a full play in re-opening the assessment. Surely, even the assessee would have full opportunity to place materials on record to resist any addition in the returned income. Surely, this is not a case for quashing notice for re-opening. In the case of Assistant Commissioner of Income-Tax vs. Rajesh Jhaveri Stock Brokers P.Ltd. (supr....