TaxTMI 
TaxTMI 
2019 (6) TMI 710
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....itioner on 17.2.2012. There after proceedings came to be initiated by issuance of notice under section 153A of the Act, pursuant to which the petitioner filed a revised return of income. Upon conclusion of such proceedings, assessment was framed under section 143(3) read with section 153A(1)(b) of the Act. 3. Thereafter, by the impugned notice dated 31.3.2018, the respondent seeks to reopen the assessment of the petitioner for assessment year 2011-12. Upon receipt of the notice, the petitioner requested the respondent to supply the reasons recorded for reopening the assessment, pursuant to which, the respondent supplied the reasons recorded on 24.5.2018. Thereafter, the petitioner, vide letter dated 3.7.2018, raised various objections on the merits of the reopening and requested the respondent to drop the assessment proceedings. However, by an order dated 20.7.2018, the respondent rejected the objections raised by the petitioner. Being aggrieved, the petitioner has filed the present petition. 4. Mr. B.S. Soparkar, learned advocate for the petitioner, submitted that the reasons recorded suffer from various infirmities. It was submitted that reasonable belief, as contemplated und....
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....cision of Bombay High Court in Hindustan Lever Limited v. R.B. Wadkar, Asst. Commissioner of Incometax Circle, 2004 (268) ITR 332, for the proposition that reasons recorded by the Assessing Officer cannot be supplemented by filing an affidavit or by making oral submissions, otherwise, the reasons, which were lacking in material particulars, would get supplemented by the time the matter reaches to the Court on the strength of affidavit or oral submissions advanced. 4.4 Reliance was also placed upon another decision of Bombay High Court in Prashant S. Joshi; Dattaram Shridhar Bhosale v. Income Tax Officer; Union of India, 2010 (324) ITR 154, wherein the court held that the reasons which are recorded by the Assessing Officer for reopening an assessment are the only reasons which can be considered when the formation of the belief is impugned. The recording of reasons distinguishes an objective from a subjective exercise of power. The requirement of recording reasons is a check against arbitrary exercise of power. For, it is on the basis of the reasons recorded and on those reasons alone that the validity of the order reopening the assessment is to be decided. The reasons recorded whi....
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..... Who is the accommodation entry giver is not mentioned. How he can be said to be "a known entry operator" is even more mysterious. Clearly the source for all these conclusions, one after the other, is the Investigation report of the DIT. Nothing from that report is set out to enable the reader to appreciate how the conclusions flow therefrom. 23. Thus, the crucial link between the information made available to the AO and the formation of belief is absent. The reasons must be self evident, they must speak for themselves. The tangible material which forms the basis for the belief that income has escaped assessment must be evident from a reading of the reasons. The entire material need not be set out. However, something therein which is critical to the formation of the belief must be referred to. Otherwise the link goes missing. 24. The reopening of assessment under Section 147 is a potent power not to be lightly exercised. It certainly cannot be invoked casually or mechanically. The heart of the provision is the formation of belief by the AO that income has escaped assessment. The reasons so recorded have to be based on some tangible material and that should be evident from re....
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.... the Assessing Officer's action is without jurisdiction. The learned senior standing counsel placed reliance upon the decision of this court in Vicky Rajesh Jhaveri v.Deputy Commissioner of Income Tax & 1, 2017 (396) ITR 265, to submit that in a similar set of facts, the court had dismissed the petition challenging the notice under section 148 of the Act. 6. In the aforesaid backdrop, the question that arises for consideration is whether on the reasons recorded, the Assessing Officer could have formed the belief that income chargeable to tax has escaped assessment. In this regard, it would be necessary to briefly refer to the reasons recorded by the Assessing Officer. A perusal of the reasons recorded reveals that the Assessing Officer has recorded that a search had been carried out at the office premises of SCS on 09.04.2013 wherein MS Excel Sheet "pradeep abad" in the excel file "ac.1.xis" was found and seized from the computer (Rajen computer) in that office in form of computer backup. As per: (i) the evidence found during the course of search in the case of Shirish Chandrakant Shah, and (ii) the appraisal report, it is seen that Shri Pradip Birewar had facilitated entries for....
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....iary clients in physical certificate form. That in this case, the shares are not purchased through exchange. A perusal of the entries recorded shows that the assessee has received payout of Rs. 60,89,495/- for 3,62,000 shares in assessment year 2011-12. On the basis of the evidence found during the course of search and the appraisal report, the Assessing Officer has formed the belief that the amount of Rs. 60,89,495/- received by the petitioner towards consideration for sale of 3,62,000 shares in assessment year 2011-12 is not genuine sale consideration, but accommodation entries. So, the case is that the petitioner did not receive any share sale consideration, but it was in the nature of mere accommodation entries. To put it briefly, the Assessing Officer, in the reasons recorded, has referred to the evidence on record and the appraisal report and has recorded that the same show that the LTCG shown by the petitioner was in the nature of accommodation entries and that in fact, there was no genuine sale consideration. 9. In this case, the Assessing Officer has filed a detailed affidavit and has also placed on record the appraisal report on the basis of which he has formed the opin....