TaxTMI 
TaxTMI 
TaxTMI 
2018 (8) TMI 1434
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....r. Armed with the reasons, the petitioner raised objections to the notice of reopening under letter dated 29.8.2017. Such objections were rejected by the Assessing Officer by an order dated 30.10.2017, whereupon this petition came to be filed. 3. Reasons recorded by the Assessing Officer are rather long. We may therefore, record the gist of such reasons. In such reasons, the Assessing Officer records that a search under section 132 of the Act was conducted on the petitioner and its group companies on 20.9.2016. During such search, one Pravin Chandra Agrawal, chairman of group companies was asked about the share application money received by the assessee company. In his statement dated 18.11.2016, he had stated that one Garg Logistics Pvt Ltd. had disclosed an undisclosed cash amount of Rs. 6.36 crores which was utilised for investment in share capital of the assessee company through various companies. This amount also included commission. He had also produced declaration filed by Garg Logistics Pvt Ltd. under section 183 of the Finance Act 2016, under the Income Declaration Scheme 2016 ("the scheme" for short). In the reasons, the Assessing Officer reproduced the entire declaratio....
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....ave reason to believe that total income to the extent of Rs. 6,36,00,000/had escaped assessment as per provision of section 147 of the IT Act. I am also satisfied that the failure is on the part of the assessee to disclose fully and truly all material facts necessary for his assessment, for the assessment year 2010-11. Hence it is a fit case to issue notice u/s 148 of the Act for the assessment year 2010-11." 4. Learned counsel Shri Patel for the petitioner drew our attention to the declaration made by Garg Logistics Pvt Ltd. under the scheme where he had made total declaration of Rs. 6.36 crores for the year under consideration, further declaring that undisclosed cash was utilised for investment in share capital of M R Shah Logistics Pvt Ltd. through various companies including commission. He pointed out that this declaration was accepted by the Principal Commissioner of Incometax. Pursuant to such acceptance, entire tax with surcharge and penalty was deposited by Garg Logistics Pvt Ltd. in three installments. Sum of Rs. 1.62 crores was deposited on 24.11.2016, second installment of Rs. 1.62 crores was deposited on 28.3.2017 and the last installment of Rs. 3.24 crores was deposi....
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....ssing Officer has reason to believe that income chargeable to tax has escaped assessment would apply. In this context, we would have to appreciate the reasons recorded by the Assessing Officer. Reference in this respect may be made to a decision of this Court in case of Inductotherm (India) P. Ltd. v. M. Gopalan, Deputy Commissioner of Incometax reported in (2013) 356 ITR 481 (Guj) in which following observations were made : "13. Despite such difference in the scheme between a return which is accepted under section 143(1) of the Act as compared to a return of which scrutiny assessment under section 143(3) of the Act is framed, the basic requirement of section 147 of the Act that the Assessing Officer has reason to believe that income chargeable to tax has escaped assessment is not done away with. Section 147 of the Act permits the Assessing Officer to assess, reassess the income or recompute the loss or depreciation if he has reason to believe that any income chargeable to tax has escaped assessment for any assessment year. This power to reopen assessment is available in either case, namely, while a return has been either accepted under section 143(1) of the Act or a scrutiny ass....
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....ared by Garg Logistics Pvt Ltd.. To put it mildly, this is a strange logic. The Assessing Officer casts burden on the assessee company to establish that the declaration made by Garg Logistics Pvt Ltd. was correct and to prove in negative that money was not the company's unaccounted income. He further expects the assessee company to establish source of such amount in the hands of Garg Logistics Pvt Ltd.. On such foundation, the Assessing Officer concludes that credit received by the company as share premium and share capital is not genuine but mere accommodation entry in order to avoid tax and it is in fact, undisclosed income of the company itself. Quite apart from impermissiblity of casting such burden on the assessee, we wonder at which stage would the assessee discharge such burden. Return was accepted without scrutiny. Before issuing impugned notice, no information was called from the assessee by the Assessing Officer. 9. The reasons so recorded simply lack validity. We are conscious that it is well settled by series of judgments of the Supreme Court that in the context of the reasons recorded by the Assessing Officer to form a belief that income chargeable to tax has esca....
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....argeable to tax for which he had failed to furnish return or he had failed to disclose any return filed or which had escaped assessment by reason of his omission or failure to fully and truly disclose all material facts. Section 184 of the Act of 2016 is a charging provision providing for basic tax rate at the rate of thirty per cent and surcharge at the prescribed rate on the income so disclosed. Section 185 provides that notwithstanding anything contained in the Income Tax Act, the person making a declaration of undisclosed income would be liable to pay penalty at the rate of twentyfive per cent of such tax in addition to tax and surcharge. Section 186 prescribes the manner of declaration. Section 188 provides that amount of undisclosed income declared in accordance with section 183 shall not be included in the total income of the declarant for any assessment year under the Income Tax Act, if the declarant makes the payment of tax and surcharge referred to in section 184 and the penalty under section 185 by the specified date. Section 190 of the Act of 2016 provides that the provisions of the Benami Transactions (Prohibition) Act, 1988 shall not apply in respect of declaration of....