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2016 (8) TMI 277
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....lled in the return along with Tax Audit Report and Form No.3CA & 3CD. The petitioner thereafter, also filed revised return. Subsequently, the petitioner Company received notice on 25.8.2010 issued under Section 143(2) of the Income Tax Act, 1961 (hereinafter referred to as "the Act") asking the petitioner to produce certain details and in response thereto on 6.9.2010, the petitioner supplied all the relevant details as sought for. The petitioner Company had again filed the return revising earlier one on 27.10.2010 and subsequently, on 28.10.2010, the petitioner had received a notice under Section 142(1) of the Act again asking for certain details spelt out in the notice. By way of letter dated 2.11.2012, the petitioner also supplied all the relevant details as sought for under Section 142(1) of the Act, but then again one more notice came to be served upon the petitioner on 27.6.2011 under Section 142(1) of the Act. Along with the said notice, the questioners running into 22 questions called upon from the petitioner and further notice also came to be received by the petitioner on 24.8.2011 under Section 143(2) of the Act, which again replied by the petitioner on 6.9.2011. The petit....
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....the end of relevant assessment year. It has also been submitted that the scrutiny assessment under Section 143(3) of the Act has been undertaken and therefore, since the notice is issued beyond the period of 4 years, it is not open to reopen the assessment. It was also submitted by the learned advocate for the petitioner that the issue pertaining to TDS deductions has already been examined at length even in the scrutiny assessment as well and there is no additional material available, which may permit the reassessment in response to the impugned notice. It was also pointed out by the learned advocate for the petitioner that the reasons, which are recorded are not based upon an independent application of mind, but it seems that the same are based on borrowed satisfaction. It was also submitted that the reopening is impermissible to make a fishing inquiry or just to re-assure whether earlier assessment is proper or not. Any attempt on the part of the respondent authority to reopen the assessment would be nothing but based upon a mere change of opinion, more particularly, when the scrutiny assessment has already been undertaken. Learned advocate for the petitioner relied upon the deci....
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....d at by the Assessing Authority and therefore, the Authority has acted well within the bounds of its authority and have been satisfied that there is justifiable reasons for reopening of the assessment. Learned advocate for the respondent has filed detailed affidavit-in-reply, which is from Page No.222 onwards and submitted that the transaction in question is a doubtful transaction and there is reasonable belief of Assessing Authority, which led him to issue notice for reassessment. Learned advocate for the respondent relied upon the decision in the case of Phool Chand Bajrang Lal Vs. ITO reported in (1993) 230 ITR 456 and contended that mere disclosure of transaction is not sufficient enough to say that there was a true and full disclosure of the facts. Learned advocate further submitted that reopening is neither based of any change of opinion nor for any review of assessment, which are being undertaken and therefore, submitted that the petition being devoid of merits, deserves to be dismissed. Learned advocate further submitted that there is no violation of principle of natural justice nor any circumstance, which warrants this Court to intercept the process of reopening of assessm....
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....e assessee has filed his return of income on 30/09/2009 declaring total income at Rs. 83,21,390/-. Thereafter, the assessee has filed revised e-return of income on 26/02/2010 declaring total income of Rs. 59,09,837/-. The case was selected for scrutiny and assessment was completed u/s. 143(3) dated 24/10/2011 assessing income at Rs. 65,60,070/-. 2. In this case, information has been received by DGIT (Investigation), Ahmedabad vide No.DGIT (Inv.)/AHD/VAT/Bogus Purchase/2014-15 dated 26.03.2015. It is stated in letter that two surveys were carried out by the Pr. DIT (Inv.), Kolkata on Vikrant Kayan and Arvind Kayan respectively. The Kayans are known entry operators of Kolkata and have been giving entries of bogus share capital, bogus bills of expenses and bogus long terms capital gains to various beneficiaries throughout the country. The above mentioned assessee is also a beneficiary of Rs. 39.94 lacs (accommodating co. Agnes Bruno Ltd.) pertaining to A.Y. 2009-10. 3. Considering the facts stated above, I have reason to believe that the income of the assessee to the tune of Rs. 39.94 lacs for the accounting period relevant to A.Y.2009-10, has escaped assessment within the meani....
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....ax if he has reason to believe that income for any assessment year has escaped the assessment. The word 'reason' in the phrase 'reason to believe' would mean cause or justification and after considering and analyzing the provision, it has been propounded that the expression cannot be read to mean that Assessing Officer should have finally ascertained the fact of legal evidence or conclusion. At the initial stage what is required is reason to believe but, not established fact of escapement of income and therefore, at this stage only question whether there was relevant material to form a reasonable belief is to be seen and in the background of present facts, there is a specific information received about the Kayans brothers during investigation by the authority and it has been prima facie found that present petitioner - assessee is also the beneficiary of the said Kayan brothers. At this stage of the proceeding, the factum of said aspect whether the petitioner is beneficiary or not, is not to be finally adjudicated upon by the Assessing Officer and therefore, this Court is not in a position to dwell into it at this stage as not required, but only has to examine whether there is a rea....
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....provisions as they stood prior to such substitution. Under the old provisions of section 147, separate clauses (a) and (b) laid down the circumstances under which income escaping assessment for the past assessment years could be assessed or reassessed. To confer jurisdiction under section 147(a) two conditions were required to be satisfied firstly the Assessing Officer must have reason to believe that income profits or gains chargeable to income tax have escaped assessment, and secondly he must also have reason to believe that such escapement has occurred by reason of either (i) omission or failure on the part of the assessee to disclose fully or truly all material facts necessary for his assessment of that year. Both these conditions were conditions precedent to be satisfied before the Assessing Officer could have jurisdiction to issue notice under section 148read with section 147(a) But under the substituted section 147 existence of only the first condition suffices. In other words if the Assessing Officer for whatever reason has reason to believe that income has escaped assessment it confers jurisdiction to reopen the assessment. It is however to be noted that both the condition....
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....ial collected by the DGCEI during the search, which included incriminating documents and other such relevant materials, was alongwith report and showcause notice placed at the disposal of the Assessing Officer. These materials prima facie suggested suppression of sale consideration of the tiles manufactured by the assessee to evade excise duty. On the basis of such material, the Assessing Officer also formed a belief that income chargeable to tax had also escaped assessment. When thus the Assessing officer had such material available with him which he perused, considered, applied his mind and recorded the finding of belief that income chargeable to tax had escaped assessment, the re-opening could not and should not have been declared as invalid, on the ground that he proceeded on the show-cause notice issued by the Excise Department which had yet not culminated into final order. At this stage the Assessing Officer was not required to hold conclusively that additions invariably be made. He truly had to form a bona fide belief that income had escaped assessment. In this context, we may refer to various decisions cited by the counsel for the Revenue. 10. In case of Central Province....
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....te information and the Assessing Officer could act upon such information for taking action under Section 147(b) of the Act. In such background, the Supreme Court observed as under: '12. Ms. Gauri Rastogi, the learned appearing for the respondents, has urged that the letter of Shri Bagai was received by the Income tax Officer on March 26, 1974 and on the very next day, that is, on March 27, 1974, he issued the impugned notice under Section 147(b) of the Act and that he did not have conducted any inquiry or investigation into the information sent by Shri Bagai. Merely because the impugned notice was sent on the next day after receipt of the letter of Shri Bagai does not mean that the Income Tax Officer did not apply his mind to the information contained in the said letter of Shri Bagai. On the basis of the said facts and information contained in the said letter, the Income Tax officer, without any further investigation, could have formed the opinion that there was reason to believe that the income of the assessee chargeable to tax had escaped assessment. The High Court, in our opinion, was in error in proceeding on the basis that it could not be said that the Income Tax Offi....
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....as invalid. Inasmuch as, as a result of our order, the reassessment proceedings have not to go on we don not and we ought not to express any opinion on the merits.' 13. In case of AGR Investment Ltd. vs. Additional Commissioner of Income Tax and anr (supra), a Division Bench of Delhi High Court considered the validity of reopening of assessment where the notice was based on information received from Directorate of investigation that the assessee was beneficiary of bogus accommodation entries. The Court while upholding the validity of reopening observed that sufficiency of reason cannot be considered in a writ petition. It was observed as under: '23 The present factual canvas has to be scrutinized on the touchstone of the aforesaid enunciation of law. It is worth noting that the learned counsel for the petitioner has submitted with immense vehemence that the petitioner had entered into correspondence to have the documents but the assessing officer treated them as objections and made a communication. However, on a scrutiny of the order, it is perceivable that the authority has passed the order dealing with the objections in a very careful and studied manner. He has taken ....
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....d to the aforesaid fact situation, this Court had interfered. Thus, the said decision is also distinguishable on the factual score.' 16. Thus, the decision in case of Futura Ceramics Pvt. Ltd. And anr vs. State of Gujarat through Secretary and ors(supra) was rendered in an entirely different background and had no direct application to the question whether on the basis of information supplied by the Excise Department to the Assessing Officer of suppression of valuation of goods or clandestine removal of goods for evading excise duty, notice for re-opening of the assessment could have been issued." 9. On the basis of aforesaid proposition laid by series of decisions, we are of the opinion that when the Authority is armed with the tangible material in the form of specific information received by the Investigation Wing, Ahmedabad is throughly justified in issuing a notice for reassessment. It is revealed from the said additional material available on hand a reasonable belief is formed by the Assessing Authority that income of the petitioner has escaped assessment and therefore, once the reasonable belief is formulated by the Authority on the basis of cogent tangible material, the....