2017 (9) TMI 1035

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....ection 143(3) of the Income Tax Act, 1961 on 29.12.2010. By making several additions, the total income of the assessee was assessed at Rs. 88.69 crores (rounded off). During such assessment, purchases made by the petitioner assessee from certain traders including one M/s. Vishal Traders came to be scrutinized. The Assessing Officer having held that such purchases were bogus made the additions. We are informed that upon further appeal by the assessee before the Appellate Commissioner and the Tribunal, the disallowances were limited to 5% of the purchases. 2.2 To reopen such assessment, the Assessing Officer issued the impugned notice which as can be seen was beyond a period of four years from the end of relevant assessment year. In order to do so, he had recorded the following reasons: "The Assessee company is engaged in the business of trading activities of Agro Processing, Maize Processing, cotton spinning Power Plant (for internal consumption) and windmill. The return of income was filed on 30/09/2009 declaring total income of Rs. 54,44,98,730/- which was processed u/s 143(1) of the Act on 21/03/2011 and thereafter assessment was passed u/s 143(3) r.w.s 153(A) of the ....

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....os. 017205004877 of M/s. Sharda Traders (Prop. Vishnu Datt (PAN : AXGPD3612C), SCF, IInd Addl. Mandi, Sirsa Haryana were also obtained from ICICI Bank, REd Square Market, Hisar. Perusal of the above mentioned statements revealed that this account has also received funds through RTGS/Fund Transfer/ etc. during the financial year 2008-09, details are as under: Sr. No. Account No. Cash deposits Credits through RTGS/Cheques/Fund Transfer/etc. 1 17205004877 Nil 7,34,16,000/- 3. The Addl. Director of Income tax (Inv.), Gurgaon accorded permission to conduct open enquiry in the case vide letter no. Addl. DIT/INV./FBD/2013-14/3485 dated 24.01.2014. Consequently, the assessee was asked to furnish certain information regarding the credit entries in his bank accounts so as to ascertain the nature and source of the same vide this office Notices/summons vide letter No. 165 dated 13.08.2015, giving an opportunity to furnish reply by 25.03.2015. In response of the above summons neither the assessee appeared nor any written reply was filed. Once again, summons was issued vide no. 166 dated 13.08.2015 at the business premises of M/s. S.R. Sales Corporation at Shop N....

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....sessment year. (II) There was no failure on the part of the assessee to disclose truly and fully all material facts. (III) The reasons do not suggest any formation of belief that income chargeable to tax had escaped assessment. Merely because the sellers of goods to the assessee refused to respond to the inquiry notice issued by the Income Tax department would not be sufficient material to enable the Assessing Officer to form a belief that the petitioner's purchases from such traders were bogus. (IV) Counsel submitted that the entire issue of the genuineness of the purchases made by the assessee was examined by the Assessing Officer during the original scrutiny assessment. No disallowance was made with respect to the purchases which are now subject matter of the reasons recorded. 4. On the other hand, learned counsel Mr. Bhatt for the department opposed the petition contending that the Assessing Officer had sufficient material at his command to form a belief that income chargeable to tax had escaped assessment. Such information was unearthed subsequent to the passing of the order of assessment. There was a clear failure on the part of the assessee ....

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....les Corporation upon which another summons was issued at the business premises of M/s. S.R. Sales Corporation. Once again there was no response to such summons. The reasons further record that local inquiries by the department revealed that no such concern was existing at the given address. Summons were also issued on 02.11.2015 and 27.11.2016 to one Milakh Raj who was the proprietor of M/s. S.R. Sales Corporation. The summons were returned back by the postal authorities with the remarks "Assessee not found at home and others refused to receive." Summons were also issued to Sharda Traders from whom also no response was received. The reasons recorded that these accounts (i.e. the accounts of M/s. S.R. Sales) had received funds of Rs. 4.48 crores from the present petitioner and these funds were followed by immediate cash withdrawals. 7. It can thus be seen that there was sufficient material available with the Assessing Officer to reopen the assessment of the petitioner upon forming a belief that income chargeable to tax had escaped assessment. The reasons recorded must be seen in entirety pointing out that there were serious infirmities noticed in the transactions of M/s. S.R. Sal....