TaxTMI 
TaxTMI 
TaxTMI 
2017 (2) TMI 124
X X X X Extracts X X X X
X X X X Extracts X X X X
....ia that the income chargeable to tax has escaped assessment for AY 2011-12. [3.0] Facts leading to the present Special Civil Application in nutshell are as follows: [3.1] That the petitioner filed the return of income for AY 2011-12. The said return was accompanied by the statement of total income, Form Nos.3CB, 3CD, annual audited accounts, audit report obtained under Section 44AB of the IT Act and the audited balance sheet. The case was selected for scrutiny and the notice under Section 142(1) of the IT Act was issued by which the learned Assessing Officer called various details with respect to the increase of share capital, share application money, expenditure incurred by the assessee. That the assessee submitted all the necessary details asked by the learned Assessing Officer more particularly with respect to the increase of share capital; with respect to share application money and even the expenditure incurred by the assessee. At this stage it is required to be noted that in Form No.3CD the assessee specifically stated its business as "trading in fabrics". The assessee also stated that in the previous year the business of the assessee was "trading in papers". That thereafte....
X X X X Extracts X X X X
X X X X Extracts X X X X
....identity and genuineness of remained unsubstantiated. 11. As such Rs. 16,50,00,000 was required to be treated as income of assessee u/s 68 of the Act. 2. It was further noticed that share application money of Rs. 30,15,00,000 was received from 7 entities located at Kolkata which itself had received money from others as detailed below: Name of entity from which share application money received Address Name of entities from which advances were received by applicant Amount Quest Financial Services Pvt Ltd 454, Dum Dum Park (Ground Floor), Kolkata Drishti Suppliers Pvt Ltd 7,00,00,000 Gangotri dealers Pvt Ltd Burnpur Power Pvt Ltd 21, Hemant Basu Sarni, Center Point, 2nd Floor, Kolkata Pranjeevan Distributors Pvt Ltd 7,15,00,000 Drishti Suppliers Pvt Ltd Gangotri dealers Pvt Ltd Fairdeal Vincom Pvt Ltd Faithful Cloth Merchants Pvt Ltd 319,21, Jessore Road, Kolkata Burnpur Power Pvt Ltd 2,00,00,000 Pears Mercantiles Pvt Ltd 262, Panchanantala road, Howrah Burnpur Power Pvt Ltd Drishti Suppliers Pvt Ltd Quest Financial Services Pvt Ltd 5,50,00,000 Wonderland Paper Suppliers Pvt Ltd 27, Netaji Subhash Road, Bally, Howrah Fastner Machinery Pvt Ltd 3,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t under Section 143(3) of the IT Act and during the course of the scrutiny assessment queries were raised with respect to increase in share capital; with respect to share application money and also with respect to expenses incurred by the assessee and all the relevant materials were supplied / furnished by the assessee and only thereafter the learned Assessing Officer framed the assessment. Therefore, it was submitted that the reopening can be said to be on a mere change of opinion by the subsequent Assessing Officer which is not permissible. With respect to the ground No.3 it was specifically submitted that during the year under consideration, the business of the assessee was trading in fabrics and it was a typographical error in the P&L Accounts and by mistake it was stated to be "paper purchase". Therefore, it was requested to drop the reassessment proceedings. [3.3] That by communication dated 25.07.2016, the learned Assessing Officer has disposed of the said objections and has not agreed with the objections raised by the assessee. Hence, the petitioner - assessee has preferred the present Special Civil Application challenging the impugned reassessment proceedings. [4.0] Shri....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ication money. It is submitted that even no notices were sent to the respective share applicants as required under Section 133 of the IT Act, to satisfy himself with respect to the genuineness of the share applicants / share application money. It is submitted that therefore the learned Assessing Officer is justified in reopening the assessment after having satisfied that income chargeable to tax has escaped assessment and to consider the genuineness of the increase in the share capital as well as the genuineness of the share application money / share applicants. It is submitted that the impugned reopening is within the period of four years and therefore, when the learned Assessing Officer has formed a reasonable belief considering the material on record that the income chargeable to tax has escaped assessment, the learned Assessing Officer is justified in reopening the assessment in AY 2011-12. Making above submissions and relying upon the decision of the Division Bench of this Court in the case of Praful Chunilal Patel vs M.J. Makwana, Assistant CIT reported in (1999)236 ITR 832, it is requested to dismiss the present petition. [6.0] Heard learned Advocates appearing on behalf o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ital as well as share application money and also with respect to the income of the assessee from trading in the fabrics framed scrutiny assessment under Section 143(3) of the IT Act. Therefore, subsequent reopening on the aforesaid grounds can certainly be said to be on a mere change of opinion by the subsequent Assessing Officer. As held by the Hon'ble Supreme Court in the case of Kelvinator India Ltd. (Supra) and the Division Bench of this Court in the case of Gujarat Power Corporation Ltd. (Supra), on mere change of opinion by a subsequent Officer, the reopening of the concluded scrutiny assessment under Section 143(3) of the IT Act is not permissible. [6.1] Now, so far as the reliance placed upon the decision of the Division Bench of this Court in the case of Praful Chunilal Patel (Supra) is concerned, it is required to be noted that as such the said decision has been considered by this Court in subsequent decisions and it is observed and held that the said decision cannot be said to be a decision on an absolute proposition of law that in all the cases where the reopening is within the period of four years, the same is permissible. Even otherwise on facts the said decision sha....